Turkcell(TKC)2024-05-27 20:50Financial Data and Key Metrics Changes - The company reported a 12% increase in top line revenue, reaching TRY31 billion, with a 23% increase in EBITDA, expanding the EBITDA margin by 3.8 percentage points to 41.4% [30][38] - The consolidated revenue increased by 11.8% year-on-year to TRY30.8 billion, with the Turkcell Turkey segment contributing a 13% rise [37] - Net profit reached TRY2.6 billion, supported by strong operational performance despite a net FX loss of TRY1.8 billion [40][51] Business Line Data and Key Metrics Changes - Digital business services generated TRY2.8 billion in revenue, with a 32% year-on-year growth, driven by a 29% increase in digital OTT services [34][26] - Paycell, the payment service platform, saw a 33% year-on-year growth, with EBITDA rising 47% due to post-expense growth lagging behind revenue increase [27] - The corporate revenues experienced a 3% decline, primarily due to fewer one-off large budget projects and a drop in public sector client revenues from 41% to 24% [5][6] Market Data and Key Metrics Changes - The mobile segment saw a net increase of 472,000 postpaid subscribers, with a total postpaid customer base exceeding 27.6 million, reflecting a 72% share [24] - Fixed broadband market added 48,000 fiber customers and 41,000 IPTV subscribers, reaching a total of 1.5 million IPTV customers [25] - International revenues rose 2.2% to TRY815 million, with Best revenues increasing by 24% in local currency terms [112] Company Strategy and Development Direction - The company aims to prioritize fiber subscriber net additions and maintain its leading position in the data center market, with a focus on digital services and solutions [34][26] - The company plans to build more data centers and collaborate with major companies to establish Turkey as a data hub for the region [62] - The 2024 revenue growth guidance has been revised to low-double-digit growth, while maintaining EBITDA margin and CapEx intensity guidance [35] Management Comments on Operating Environment and Future Outlook - Management noted that competition in the mobile market was less aggressive, allowing for a focus on the postpaid segment [24] - The company expressed optimism about the growth of digital services and solutions, expecting continued momentum into the next year [107] - Management highlighted the challenges of projecting inflation due to macroeconomic dynamics but remains committed to maintaining strong operational performance [49] Other Important Information - The company is exploring funding alternatives for euro bond reissues and has a manageable FX debt service of around $340 million [44] - The cash position at the end of Q1 2024 was TRY49 billion, impacted by various payments including a wireless usage tax [43] - The company plans to reduce its derivative portfolio to manage foreign currency risk more effectively [45] Q&A Session Summary Question: What surprised you the most in the past couple of months to increase guidance? - Management indicated that the first couple of months of the quarter exceeded expectations, prompting the guidance revision [60][51] Question: Can you elaborate on the cash position decrease due to Eurobond investments? - The company explained that investing in Eurobonds was a strategy to benefit from high yields compared to deposit rates [68][69] Question: What will be done with the proceeds from the asset sale in Ukraine? - Management stated that while no board decision has been made, significant investments are planned in data centers, solar energy, and 5.5G auctions [71][72] Question: Were there any working capital issues in the first quarter? - Management confirmed a cash outflow related to working capital, primarily due to tax payments and bonuses, but expects recovery in the coming periods [86][87] Question: Can you clarify the calculation of net debt? - Management clarified that the net debt position calculation remains unchanged, including cash and financial assets [75][78]