Turkcell(TKC)2023-08-17 18:47Financial Data and Key Metrics - Group revenues increased by TRY 9.2 billion, a 74% YoY growth, driven by Turkcell Turkey's expanding subscriber base and strong ARPU growth [19] - EBITDA reached TRY 9.5 billion, almost doubling YoY, with a 44% EBITDA margin, supported by strong top-line growth and reduced energy prices [37] - Net profit rose 70% YoY to TRY 3.2 billion, reflecting solid operational performance and prudent risk management [37] - Mobile ARPU accelerated by 84%, driven by price adjustments and upsell efforts, with a churn rate of 1.9% [28] - Residential fiber ARPU grew by 49%, surpassing quarterly average annual inflation, with 53% of fiber customers opting for 12-month or contract-free tariffs by June [16] Business Line Performance - Mobile operations: Postpaid subscribers increased by 404,000 in Q2, representing 70% of the mobile base, despite competitive pressures and rising acquisition costs [11] - Fixed broadband: Gained 40,000 fiber subscribers and 35,000 IPTV net additions in Q2, exceeding the annual homepass target with 165,000 additions in H1 [12][33] - Digital business services: Revenue grew 82% YoY, contributing 10% of total revenue, driven by system integration projects, data center, and cloud businesses [13] - Techfin: Paycell revenue rose 95% YoY, supported by Pay Later, mobile app store payments, and increased card usage [35] - International operations: Turkcell International revenue grew 48% YoY, with lifecell Ukraine revenue up 36% in local currency, exceeding inflation [23] Market Performance - Turkcell Turkey: Main driver of group revenue growth, supported by subscriber expansion and ARPU growth [19] - Ukraine: lifecell revenue grew 36% YoY in local currency, with EBITDA margin improving by 1.2 percentage points due to lower interconnection and energy costs [23] - Pakistan: OTT TV services surpassed 1 million active users through a partnership with Jazz [17] Strategic Focus and Industry Competition - Focus on inflationary pricing strategy, with price adjustments in August for both mobile and fixed services [30] - Continued investment in fiber expansion, with a take-up ratio expected to rebound as the company monetizes its investments [33] - Strategic partnerships in digital services, such as the nationwide QR payment project and collaborations with global studios for TV+ [14][38] - Regulatory environment: Expectation of 5G licensing and spectrum tender in 2024, with no immediate changes anticipated [62] Management Commentary on Operating Environment and Outlook - Management remains cautious on EBITDA margin for H2 due to expected energy price increases and a 37% wage hike in July [44][56] - Guidance for 2023 revised to 71% revenue growth, TRY 37 billion EBITDA, and 22% CapEx intensity [39] - FX risk management: Majority of cash held in hard currencies, with a net long FX position of US84 million [52][57]