Edgar Filing: TURKCELL ILETISIM HIZMETLERI A S

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated April 25, 2014

Commission File Number: 001-15092

_____________________________________________________

TURKCELL ILETISIM HIZMETLERI A.S.

(Translation of registrant’s name in English)

Turkcell Plaza

Mesrutiyet Caddesi No. 71

34430 Tepebasi

Istanbul, Turkey

(Address of Principal Executive Offices)

_____________________________________________________

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F Q Form 40-F £

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes £ No Q

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes £ No Q

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes £ No Q

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________

Enclosure: A press release dated April 24, 2014 announcing Turkcell’s First Quarter 2014 results and Q1 2014 IFRS report.

First Quarter 2014 Results

Content

HIGHLIGHTS
	COMMENTS FROM THE CEO, SUREYYA CILIV	4

FINANCIAL AND OPERATIONAL REVIEW OF THE FIRST QUARTER 2014
	FINANCIAL REVIEW OF TURKCELL GROUP	5
	OPERATIONAL REVIEW IN TURKEY	7

OTHER DOMESTIC AND INTERNATIONAL OPERATIONS
	ASTELIT	8
	TURKCELL SUPERONLINE	9
	FINTUR	9
	TURKCELL GROUP SUBSCRIBERS	10

OVERVIEW OF THE MACROECONOMIC ENVIRONMENT		10

RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS		11

Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S., (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”). All non-financial data is unconsolidated and comprises Turkcell only figures. The terms "we", "us", and "our" in this press release refer only to the Company, except in discussions of financial data, where such terms refer to the Group, and where context otherwise requires.

In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for March 31, 2014 refer to the same item as at March 31, 2013. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2014, which can be accessed via our website in the investor relations section (www.turkcell.com.tr).

·	Please note that selected financial information presented in this press release for the first and fourth quarters of 2013, and first quarter of 2014, both in TRY and US$, is based on IFRS figures.

·	In the tables used in this press release totals may not foot due to rounding differences. The same applies for the calculations in the text.

First Quarter 2014 Results

HIGLIGHTS OF THE FIRST QUARTER OF 2014

·	Group revenues grew by 6% to TRY2,855 million (TRY2,688 million)

·	Group EBITDA1 increased by 10% to TRY887 million (TRY808 million), while the EBITDA margin rose to 31.1% (30.0%)

·	Group net income declined to TRY359 million (TRY566 million), adversely impacted by devaluation of UAH against US$ in Ukraine

·	Mobile business revenues in Turkey were at TRY2,205 million (TRY2,201 million) with a 30.2% (29.4%) EBITDA margin

Mobile broadband revenues rose by 26% to TRY400 million (TRY319 million)

Voice revenues2 declined by 3% to TRY1,537 million (TRY1,585 million), due to regulatory decisions

·	Revenues of subsidiaries3 grew by 33% to TRY650 million (TRY488 million), while EBITDA increased by 38% to TRY222 million (TRY161 million)

Excluding the impact of MTR cuts effective as of July 1, 20134:

·	Turkcell Group revenues would be TRY2,955 million on 10% growth.
·	Mobile business revenues in Turkey would be TRY2,305 million on 5% growth, with a 3% rise in voice revenues.
·	Group EBITDA would be TRY886 million on 10% growth.

(1) EBITDA is a non-GAAP financial measure. See page 11 for the reconciliation of EBITDA to net cash from operating activities.

(2) Voice revenues include outgoing, incoming, roaming and other (comprising almost 1% of Turkcell Turkey) revenues.

(3) Including eliminations.

(4) The adjusted figures are non-IFRS measures.

(*)For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2014 which can be accessed via our web site in the investor relations section (www.turkcell.com.tr).

First Quarter 2014 Results

COMMENTS FROM CEO, SUREYYA CILIV

“In the first quarter of 2014, Turkcell Group revenues rose 6% to TRY2.9 billion, while EBITDA grew by 10% to TRY887 million. Meanwhile, EBIT increased by 9% to TRY488 million, while net income, adversely impacted by devaluation in Ukraine, realized at TRY359 million.

Turkcell’s mobile business revenues in Turkey, negatively affected by regulatory decisions and increased competition, remained flat, whereas mobile broadband grew by 26%.

Our subsidiaries’ revenues grew by 33%, continuing their strong contribution to Group revenues. Consequently, their contribution to group revenues and EBITDA rose to 23% and 25%, respectively. Revenues of Turkcell Superonline, continuously investing in the fiber broadband business, grew by 38% year on year. Meanwhile, revenues from our Ukrainian business rose by 24% in TRY terms, while being flat in USD terms due to devaluation of the local currency. We believe in the future potential of Ukraine. We sincerely hope for a normalization of the current political situation, and advancing a fast mobile internet infrastructure that will add value to its economy.

We are celebrating the 20th anniversary of Turkcell in Turkey this year. Over the past 20 years, we have taken confident steps in our transformation from “a GSM operator to a communications and technology company”. We have provided 43.2 Mbps mobile broadband and 1,000 Mbps fiber broadband speed in a first for Turkey, thereby making information accessible anytime and anywhere, ranking us among the world’s foremost players. And with investments of over TRY23 billion in our infrastructure, innovative services and social responsibility projects, we have created more value for the economy and for our customers. With this pioneering vision, we will continue our efforts to carry Turkey and all other markets that we operate in forward. And so we thank all of our customers, employees, business partners, board of directors and shareholders, who are always beside us.”

OVERVIEW OF TURKCELL TURKEY

Competition in the first quarter of the year, which is seasonally slow, and historically aggressive, has increased through bundled offers with greater data incentives. Following the ICTA decision on a higher minimum limit on onnet voice and SMS tariffs and the extension of this decision on campaigns1, both of which apply only to Turkcell, the competitors increased their focus on market share gain. Furthermore, the ICTA decision on decreasing the maximum SMS price by 20%2 which came into effect this quarter, along with lower MTR rates since July 2013, have decreased unit prices in the market compared to a year ago, pressuring profitability. Thus far, in April, we observed that the competition has continued at an increasing pace with a decrease in some offer prices.

In this environment, as part of our strategy of profitable growth, we remained focused on expanding our postpaid customer base and increasing smartphone penetration. Accordingly, our postpaid customers grew by 93 thousand quarterly net additions to 14.1 million and 40.5% of the total base, while we recorded a 389 thousand decline in our customer base, mainly from among price-sensitive prepaid customers. Meanwhile, our smartphone base expanded by 711 thousand to 10.3 million, corresponding to 32% penetration, despite the macro challenges and regulatory change that abolished the availability of installments on credit card payments for handsets. This was achieved through our contracted offers and promotion of our affordable T40 model.

Overall, despite the challenges discussed above, in the first quarter, we recorded a topline and EBITDA performance in line with our full year guidance.

1: Decision date is 7 January 2014

2: Decision date is 23 September 2013 (Decreased from TRY 0.4154/SMS to TRY 0.3325/SMS)

First Quarter 2014 Results

FINANCIAL AND OPERATIONAL REVIEW OF THE FIRST QUARTER 2014

The following discussion focuses principally on the developments and trends in our business in the first quarter of 2014 in TRY terms. Selected financial information presented in this press release for the first and fourth quarters of 2013, and the first quarter of 2014, both in TRY and US$ is based on IFRS figures.

Selected financial information for the first and fourth quarters of 2013, and the first quarter of 2014, both in TRY and in US$ prepared in accordance with IFRS and in TRY prepared in accordance with the Capital Markets Board of Turkey’s standards are also included at the end of this press release.

Financial Review of Turkcell Group

Profit & Loss Statement (million TRY)	Q113	Q413	Q114	y/y %	q/q %
Total Revenue	2,688.4	2,883.6	2,855.2	6.2%	(1.0%)
Direct cost of revenues1	(1,687.3)	(1,851.3)	(1,742.3)	3.3%	(5.9%)
Direct cost of revenues1/revenues	(62.8%)	(64.2%)	(61.0%)	1.8pp	3.2pp
Depreciation and amortization	(360.4)	(481.6)	(399.6)	10.9%	(17.0%)
Gross Margin	37.2%	35.8%	39.0%	1.8pp	3.2pp
Administrative expenses	(128.9)	(152.0)	(142.1)	10.2%	(6.5%)
Administrative expenses/revenues	(4.8%)	(5.3%)	(5.0%)	(0.2pp)	0.3pp
Selling and marketing expenses	(425.0)	(510.4)	(483.1)	13.7%	(5.3%)
Selling and marketing expenses/revenues	(15.8%)	(17.7%)	(16.9%)	(1.1pp)	0.8pp
EBITDA2	807.6	851.5	887.3	9.9%	4.2%
EBITDA Margin	30.0%	29.5%	31.1%	1.1pp	1.6pp
EBIT3	447.2	369.9	487.7	9.1%	31.8%
Net finance income / (expense)	129.3	149.7	(303.3)	(334.6%)	(302.6%)
Finance expense	(37.4)	(89.7)	(551.9)	n.m	515.3%
Finance income	166.7	239.4	248.6	49.1%	3.8%
Share of profit of associates	68.6	75.8	73.6	7.3%	(2.9%)
Other income / (expense)	(0.3)	(35.6)	(3.5)	n.m	(90.2%)
Monetary gains / (losses)	53.5	72.5	64.5	20.6%	(11.0%)
Non-controlling interests	4.4	(7.9)	200.7	n.m	n.m
Income tax expense	(137.1)	(119.5)	(160.2)	16.8%	34.1%
Net Income	565.6	504.9	359.5	(36.4%)	(28.8%)

(1) Including depreciation and amortization expenses.

(2) EBITDA is a non-GAAP financial measure. See page 11 for the reconciliation of EBITDA to net cash from operating activities.

(3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses.

Revenue grew by 6.2% year-on-year, mainly due to:

8.5% rise in mobile broadband and services revenues in Turkey to TRY668.3 million (TRY616.2 million), constituting 30.3% (28.0%) of mobile business revenues in Turkey

25.6% increase in mobile broadband revenues to TRY400.3 million (TRY318.7 million), despite the tough competitive environment where, particularly, data incentives were increased

33.4% growth in revenues of subsidiaries to TRY650.3 million (TRY487.6 million) with an increasing contribution to the topline of 22.8% (18.1%)

37.6% rise in Turkcell Superonline revenues to TRY279.7 million (TRY203.3 million)

First Quarter 2014 Results

Direct cost of revenues grew by 3.3% to TRY1,742.3 million (TRY1,687.3 million), while as a percentage of revenues declining to 61.0% (62.8%). This was mainly due to lower interconnect costs as a result of MTR cuts. Meanwhile, there was an increase in depreciation and amortization expenses and other cost items as a percentage of revenues.

The table below presents the interconnect revenues and costs of Turkcell Turkey:

Million TRY	Q113	Q413	Q114	y/y %	q/q %
Interconnect revenues	305.6	253.2	253.7	(17.0%)	0.2%
as a % of revenues	13.9%	11.3%	11.5%	(2.4pp)	0.2pp
Interconnect costs	(299.4)	(238.6)	(241.4)	(19.4%)	1.2%
as a % of revenues	(13.6%)	(10.7%)	(11.0%)	2.6pp	(0.3pp)

Administrative expenses as a percentage of revenues rose by 0.2pp to 5.0% (4.8%) year-on-year in Q114, driven mainly by increased bad debt expenses (0.4pp) as opposed to the decline in other cost items (0.2pp).

Selling and marketing expenses as a percentage of revenues grew by 1.1pp to 16.9% (15.8%) year-on-year in Q114 due to increased selling expenses (1.0pp), frequency usage fee (0.4pp) and other cost items (0.5pp) as opposed to the decrease in marketing expenses (0.8pp).

EBITDA increased by 9.9% to TRY887.3 million (TRY807.6 million) year-on-year, while the EBITDA margin climbed to 31.1% (30.0%). While selling and marketing, as well as administrative expenses increased by 1.1pp and 0.2pp as a percentage of revenues, respectively, the direct cost of revenues (excluding depreciation and amortization) decreased by 2.4pp.

The EBITDA of subsidiaries improved by 37.9% to TRY221.8 million (TRY160.9 million) with the higher EBITDA of both Turkcell Superonline and Astelit.

Net finance expense was at TRY303.3 million (net finance income of TRY129.3 million), due to the increase in translation losses to TRY508.6 million (TRY0.6 million) partially netted off with the increase in interest income recorded on time deposits.

In Q114, Astelit recorded a translation loss of TRY464.0 million, stemming from the devaluation of the UAH against the US$ during the quarter. Meanwhile, BeST recorded TRY48.7 million, Turkcell Superonline recorded TRY10.9 million and other group companies recorded TRY2.1 million translation losses, while Turkcell Turkey recorded a translation gain of TRY17.1 million.

Share of profit of equity accounted investees comprising our share in the net income of unconsolidated investees Fintur and A-Tel, rose by 7.3% year-on-year to TRY73.6 million (TRY68.6 million).

Income tax expense details in Q114 are presented in the table below:

Million TRY	Q113	Q413	Q114	y/y %	q/q %
Current Tax expense	(138.7)	(166.7)	(174.0)	25.5%	4.4%
Deferred Tax Income/expense	1.6	47.2	13.8	762.5%	(70.8%)
Income Tax expense	(137.1)	(119.5)	(160.2)	16.8%	34.1%

Net income fell by 36.4% to TRY359.5 million (TRY565.6 million) in Q114, mainly due to higher translation losses recorded during the quarter following the devaluation of the UAH against the US$ (for details, please see the Astelit section).

(*)EBITDA is a non-GAAP financial measure. See page 11 for the reconciliation of EBITDA to net cash from operating activities.

First Quarter 2014 Results

Total debt as of March 31, 2014 increased to TRY3,515.5 million (US$1,605.4 million) from TRY3,014.6 million (US$1,666.7 million) as of March 31, 2013 in consolidated terms. The debt balance of Ukraine (including intra-group debt) was TRY1,433.2 million (US$654.5 million), while that of Belarus was TRY1,351.0 million (US$617.0 million) and of Turkcell Superonline was TRY757.7 million (US$346.0 million).

TRY2,752.9 million (US$1,257.1 million) of our consolidated debt is at a floating rate, while TRY2,151.9 million (US$982.7 million) will mature within less than a year. (Please note that the figures in parentheses refer to US$ equivalents).

Cash flow analysis: Capital expenditures, including non-operational items, amounted to TRY340.4 million in Q114, of which TRY230.2 million was related to Turkcell Turkey, TRY69.7 million to Turkcell Superonline, TRY15.0 million to Astelit and TRY6.6 million to BeST. The major cash outflow items in this quarter were capex and other items including corporate tax payment, frequency usage fee payment and the change in net working capital.

Consolidated Cash Flow (million TRY)	Q113	Q413	Q114
EBITDA1	807.6	851.5	887.3
LESS:
Capex and License	(199.5)	(818.5)	(340.4)
Turkcell	(117.1)	(500.2)	(230.2)
Turkcell Superonline	(59.2)	(172.1)	(69.7)
Ukraine2	(6.1)	(61.2)	(15.0)
Investment & Marketable Securities	(2.4)	1.7	(22.7)
Net interest Income/ (expense)	129.9	208.7	205.4
Other	(1,063.2)	197.7	(973.2)
Net Change in Debt	(60.4)	(15.2)	103.8
Cash generated	(388.0)	425.6	(139.8)
Cash balance	6,610.9	8,128.9	7,989.1

(1) EBITDA is a non-GAAP financial measurement. See page 11 for the reconciliation of EBITDA to net cash from operating activities.

(2) The impact from the movement of reporting currency (TRY) against US$ is included in this line.

Operational Review in Turkey

Summary of Operational data	Q113	Q413	Q114	y/y %	q/q %
Number of total subscribers (million)	34.9	35.2	34.8	(0.3%)	(1.1%)
Postpaid	13.5	14.0	14.1	4.4%	0.7%
Prepaid	21.4	21.2	20.7	(3.3%)	(2.4%)
ARPU, blended (TRY)	21.0	21.3	21.0	-	(1.4%)
Postpaid	36.4	36.5	36.3	(0.3%)	(0.5%)
Prepaid	11.5	11.3	10.8	(6.1%)	(4.4%)
ARPU (Average Monthly Revenue per User), blended (US$)	11.7	10.5	9.5	(18.8%)	(9.5%)
Postpaid	20.4	18.0	16.3	(20.1%)	(9.4%)
Prepaid	6.4	5.6	4.8	(25.0%)	(14.3%)
Churn (%)	8.5%	6.7%	7.8%	(0.7pp)	1.1pp
MOU (Average Monthly Minutes of usage per subscriber), blended	238.8	257.5	254.6	6.6%	(1.1%)

Subscribers of our mobile business in Turkey declined by 389 thousand in Q114, mainly due to losses in the prepaid segment due to an intensely competitive environment. Yet, we continued to expand our postpaid subscriber base by 93 thousand net additions with our continued focus on contracting and switches from prepaid to postpaid segment. As a result, the share of our postpaid subscribers in the total subscriber base increased to 40.5% (38.6%).

First Quarter 2014 Results

Churn Rate refers to voluntarily and involuntarily disconnected subscribers. In Q114, our churn rate decreased to 7.8% (8.5%). The rate in Q113 was impacted by the ICTA decision enabling users of mobile lines without subscription to register those lines under their names. Each subscription line registered due to this decision had to be recorded as a churn and also as an acquisition in operators’ records. Excluding the impact of this decision, the churn rate would have been 7.9% in Q113. The rate increased 1.1pp quarter-on-quarter driven by increased competition.

ARPU in TRY terms stayed flat year-on-year at TRY21.0 (TRY21.0), including the impact of the MTR cuts. Excluding this impact, blended ARPU would have increased by 4.8% to TRY22.0.

MoU increased 6.6% year-on-year to 254.6 minutes (238.8 minutes) driven by higher incentives and greater package utilization.

OTHER DOMESTIC AND INTERNATIONAL OPERATIONS

Astelit revenues remained nearly flat at US$99.0 million (US$99.2 million), while registering 13.5% growth in local currency terms year-on-year, mainly driven by a larger customer base and increased mobile data revenues. Furthermore, Astelit registered double-digit EBITDA growth of 12.5% to US$31.5 million (US$28.0 million), while operational profitability improved by 3.7pp to 31.9% (28.2%).

Astelit’s three-month active subscribers increased by 122 thousand during the quarter to 9.3 million. ARPU (3 months active) fell by 12.2% to US$3.6 (US$4.1) given the impact of currency devaluation. MoU decreased by 9.9% to 167.1 minutes (185.4 minutes), mainly driven by changes in consumer behavior.

A challenging macroeconomic and political environment continues in Ukraine. Following the decision of the National Bank of Ukraine to adopt a floating currency regime in February, US$/UAH increased by 37% during the quarter. While Astelit’s operational performance remained intact and uninterrupted, the devaluation has adversely impacted our consolidated financial statements through Astelit’s FX-denominated debt with a TRY464.0 million translation loss, having a net income effect of TRY255.4 million.

Further currency devaluation coupled with increasing inflation, and decreasing consumer confidence in Ukraine, may put some pressure on Astelit’s operational and financial performance over the coming quarters.

Astelit	Q113	Q413	Q114	y/y %	q/q %
Number of subscribers (million)1	11.1	12.6	12.5	12.6%	(0.8%)
Active (3 months)2	8.2	9.2	9.3	13.4%	1.1%
MOU (minutes)	185.4	172.0	167.1	(9.9%)	(2.8%)
ARPU (Average Monthly Revenue per User), blended (US$)	3.0	3.1	2.6	(13.3%)	(16.1%)
Active (3 months)	4.1	4.1	3.6	(12.2%)	(12.2%)
Revenue (million UAH)	792.5	912.8	899.5	13.5%	(1.5%)
Revenue (million US$)	99.2	114.2	99.0	(0.2%)	(13.3%)
EBITDA (million US$)3	28.0	35.2	31.5	12.5%	(10.5%)
EBITDA margin	28.2%	30.8%	31.9%	3.7pp	1.1pp
Net loss (million US$)	(14.9)	(2.4)	(213.1)	n.m	n.m
Capex (million US$)	3.4	26.8	6.9	102.9%	(74.3%)

(1) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn.

(2) Active subscribers are those who in the past three months made a revenue generating activity.

(3) EBITDA is a non-GAAP financial measurement. See page 11 for the reconciliation of Euroasia’s EBITDA to net cash from operating activities. Euroasia holds a 100% stake in Astelit.

(*) Astelit, in which we hold a 55% stake through Euroasia, has operated in Ukraine since February 2005.

First Quarter 2014 Results

Turkcell Superonline continued its robust financial performance with revenue and EBITDA growth of 37.6% and 34.2%, respectively. The EBITDA margin of 26.7% (27.3%) was impacted by increased selling and marketing expenses compared to a year ago.

During the quarter, FTTH subscriber base1 expanded with 44 thousand net additions. Residential segment revenues grew by 51.2% while corporate segment revenues rose by 33.5% with further synergies at the group level year-on-year. Accordingly, the share of residential and corporate segment revenues in total revenues reached 65% (62%). Meanwhile, the share of non-group revenues reached 77% (74%).

Turkcell Superonline has continued to invest in its fiber network, increasing home passes2 to 1.8 million.

Turkcell Superonline (million TRY)	Q113	Q413	Q114	y/y %	q/q %
Revenue	203.3	262.1	279.7	37.6%	6.7%
Residential	72.1	94.4	109.0	51.2%	15.5%
% of revenues	35.5%	36.0%	39.0%	3.5pp	3.0pp
Corporate	54.6	73.7	72.9	33.5%	(1.1%)
% of revenues	26.9%	28.1%	26.1%	(0.8pp)	(2.0pp)
Wholesale	76.6	94.0	97.8	27.7%	4.0%
% of revenues	37.7%	35.9%	35.0%	(2.7pp)	(0.9pp)
EBITDA 3	55.6	64.1	74.6	34.2%	16.4%
EBITDA Margin	27.3%	24.4%	26.7%	(0.6pp)	2.3pp
Capex	59.2	172.1	69.7	17.7%	(59.5%)
FTTH subscribers	464	570	614	32.3%	7.7%

(1) FTTH subscriber base refers to residential and corporate fiber subscribers.

(2) Home passes figure refers to the total of home passes and office passes figures.

(3) EBITDA is a non-GAAP financial measure. See page 11 for the reconciliation of EBITDA to net cash from operating activities.

(*)Turkcell Superonline is our wholly-owned subsidiary, providing fiber broadband.

Fintur’s subscriber base decreased by 0.7 million year-on-year, mainly due to KCell’s one-off clean up of database with the net effect of 789 thousand subscribers. Fintur’s consolidated revenues declined by 8.7% mainly due to the decline in KCell’s revenues as a result of devaluation of the Kazakhstani Tenge (KZT) against the US$ and the MTR cut. Accordingly, Fintur’s contribution to net income decreased by 13.2% to US$33 million (US$38 million) year-on-year.

Fintur	Q113	Q413	Q114	y/y %	q/q %
Subscribers (million)	21.4	21.5	20.7	(3.3%)	(3.7%)
Kazakhstan	13.8	14.3	13.5	(2.2%)	(5.6%)
Azerbaijan	4.4	4.4	4.3	(2.3%)	(2.3%)
Moldova	1.3	1.0	1.0	(23.1%)	-
Georgia	1.9	1.8	1.8	(5.3%)	-
Revenue (million US$)	473	527	432	(8.7%)	(18.0%)
Kazakhstan	286	322	259	(9.4%)	(19.6%)
Azerbaijan	136	151	124	(8.8%)	(17.9%)
Moldova	18	20	17	(5.6%)	(15.0%)
Georgia	33	35	31	(6.1%)	(11.4%)
Fintur’s contribution to Group’s net income	38	37	33	(13.2%)	(10.8%)

(*) We hold a 41.45% stake In Fintur, which has interests in Kazakhstan, Azerbaijan, Moldova and Georgia.

First Quarter 2014 Results

Turkcell Group Subscribers amounted to approximately 70.1 million as of March 31, 2014. This figure is calculated by taking the number of subscribers of Turkcell and each of our subsidiaries and unconsolidated investees. It includes the total number of mobile subscribers of Turkcell Turkey, Astelit and BeST, as well as of our operations in the Turkish Republic of Northern Cyprus (“Northern Cyprus”), Fintur and Turkcell Europe. Turkcell Group subscribers declined by 1.2 million during the quarter.

Turkcell Group Subscribers (million)	Q113	Q413	Q114	y/y %	q/q %
Turkcell	34.9	35.2	34.8	(0.3%)	(1.1%)
Ukraine	11.1	12.6	12.5	12.6%	(0.8%)
Fintur	21.4	21.5	20.7	(3.3%)	(3.7%)
Northern Cyprus	0.4	0.4	0.4	-	-
Belarus	1.0	1.2	1.3	30.0%	8.3%
Turkcell Europe	0.4	0.4	0.4	-	-
TURKCELL GROUP	69.2	71.3	70.1	1.3%	(1.7%)

OVERVIEW OF THE MACROECONOMIC ENVIRONMENT

The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.

	Q113	Q413	Q114	y/y %	q/q %
US$ / TRY rate
Closing Rate	1.8087	2.1343	2.1898	21.1%	2.6%
Average Rate	1.7865	2.0302	2.2253	24.6%	9.6%
Consumer Price Index (Turkey)	2.6%	2.3%	3.6%	1.0pp	1.3pp
GDP Growth (Turkey)	2.9%	4.4%	n.a.	n.a.	n.a.
US$ / UAH rate
Closing Rate	7.99	7.99	10.95	37.0%	37.0%
Average Rate	7.99	7.99	9.15	14.5%	14.5%
US$ / BYR rate
Closing Rate	8,670	9,510	9,870	13.8%	3.8%
Average Rate	8,627	9,282	9,697	12.4%	4.5%

First Quarter 2014 Results

RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe that EBITDA is a measurement commonly used by companies, analysts and investors in the telecommunications industry that enhances the understanding of our cash generation ability and liquidity position, and assists in the evaluation of our capacity to meet our financial obligations. We also use EBITDA as an internal measurement tool, and accordingly, we believe that its presentation provides useful and relevant information to analysts and investors. Our EBITDA definition includes Revenue, Direct Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses and Administrative expenses, but excludes translation gain/(loss), finance income, share of profit of equity accounted investees, gain on sale of investments, income/(loss) from related parties, minority interest and other income/(expense). EBITDA is not a measure of financial performance under IFRS, and should not be construed as a substitute for net earnings (loss) as a measure of performance, or cash flow from operations as a measure of liquidity. The following table provides a reconciliation of EBITDA, which is a non-GAAP financial measurement, to net cash from operating activities, which we believe is the most directly comparable financial measurement calculated and presented in accordance with IFRS.

Turkcell (million US$)	Q113	Q413	Q114	y/y %	q/q %
EBITDA	452.1	420.4	399.2	(11.7%)	(5.0%)
Income tax expense	(76.7)	(59.4)	(72.1)	(6.0%)	21.4%
Other operating income / (expense)	(0.6)	(16.9)	(2.1)	250.0%	(87.6%)
Financial income / (expense)	(16.3)	78.2	(16.2)	(0.6%)	(120.7%)
Net increase / (decrease) in assets and liabilities	(540.8)	26.5	(386.7)	(28.5%)	n.m
Net cash from operating activities	(182.3)	448.8	(77.9)	(57.3%)	(117.4%)

Turkcell Superonline (million TRY)	Q113	Q413	Q114	y/y %	q/q %
EBITDA	55.6	64.1	74.6	34.2%	16.4%
Income tax expense	(0.4)	35.3	(1.6)	300.0%	(104.5%)
Other operating income / (expense)	0.5	2.7	0.4	(20.0%)	(85.2%)
Financial income / (expense)	(14.4)	(18.4)	(18.3)	27.1%	(0.5%)
Net increase / (decrease) in assets and liabilities	(84.8)	15.2	(63.1)	(25.6%)	(515.1%)
Net cash from operating activities	(43.5)	98.9	(8.0)	(81.6%)	(108.1%)

Euroasia (million US$)	Q113	Q413	Q114	y/y %	q/q %
EBITDA	28.0	35.2	31.5	12.5%	(10.5%)
Other operating income / (expense)	0.9	(0.2)	0.8	(11.1%)	(500.0%)
Financial income / (expense)	(14.1)	(9.0)	(14.5)	2.8%	61.1%
Net increase / (decrease) in assets and liabilities	(13.6)	(27.4)	(1.3)	(90.4%)	(95.3%)
Net cash from operating activities	1.2	(1.4)	16.5	n.m	n.m

First Quarter 2014 Results

FORWARD-LOOKING STATEMENTS: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, “will,” “expect,” “intend,” “estimate,” “believe”, “continue” and “guidance”.

Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2013 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

ABOUT TURKCELL: Turkcell is the leading communications and technology company in Turkey, with 34.8 million subscribers as of March 31, 2014. Turkcell is a leading regional player with its approximately 70.1 million subscribers in nine countries as of March 31, 2014. It has become one of the first among the global operators to have implemented HSPA+. It has achieved up to 43.2 Mbps speed using the Dual Carrier technology, and is continuously working to provide the latest technology to its customers. Turkcell Superonline, a wholly owned subsidiary of Turkcell, is the first telecom operator to offer households fiber broadband connection at speeds of up to 1,000 Mbps in Turkey. As of December 2013, Turkcell’s population coverage is at 99.49% in 2G and 86.17% in 3G. Turkcell reported a TRY2.9 billion (US$1.3 billion) revenue with total assets of TRY21.5 billion (US$9.8 billion) as of March 31, 2014. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr

For further information please contact Turkcell

Investor Relations

Tel: + 90 212 313 1888

investor.relations@turkcell.com.tr

Corporate Communications:

Tel: + 90 212 313 2321

Turkcell-Kurumsal-Iletisim@turkcell.com.tr

	TURKCELL ILETISIM HIZMETLERI A.S. CMB SELECTED FINANCIALS (TRY Million)

	Quarter Ended			Quarter Ended			12 Months Ended			3 Months Ended
	March 31,			December 31,			December 31,			March 31,
	2013			2013			2013			2014


Consolidated Statement of Operations Data
Revenues
Communication fees		2,430.6			2,545.3			10,242.8			2,496.0
Commission fees on betting business		54.3			73.1			230.4			76.2
Monthly fixed fees		20.2			18.2			75.9			16.7
Simcard sales		6.4			7.2			29.8			6.5
Call center revenues and other revenues		176.9			239.8			829.0			259.8
Total revenues		2,688.4			2,883.6			11,407.9			2,855.2
Direct cost of revenues		(1,685.7	)		(1,848.9	)		(7,058.9	)		(1,740.9	)
Gross profit		1,002.7			1,034.7			4,349.0			1,114.3
Administrative expenses		(128.9	)		(152.0	)		(550.3	)		(142.1	)
Selling & marketing expenses		(425.0	)		(510.4	)		(1,843.6	)		(483.1	)
Other Operating Income / (Expense)		211.5			35.3			907.9			255.9
Operating profit before financing and investing costs		660.3			407.6			2,863.0			745.0
Income from investing activities		5.3			8.9			30.2			4.9
Expense from investing activities		(1.5	)		(15.3	)		(58.1	)		(10.8	)
Share of profit of equity accounted investees		68.6			75.8			297.3			73.6
Income before financing costs		732.7			477.0			3,132.4			812.7
Finance income		-			-			-			-
Finance expense		(86.3	)		85.1			(383.2	)		(556.7	)
Monetary gain/(loss)		53.5			72.5			176.9			64.5
Income before tax and non-controlling interest		699.9			634.6			2,926.1			320.5
Income tax expense		(137.4	)		(120.0	)		(592.4	)		(160.6	)
Income before non-controlling interest		562.5			514.6			2,333.7			159.9
Non-controlling interest		4.4			(7.9	)		(3.4	)		200.7
Net income		566.9			506.7			2,330.3			360.6

Net income per share		0.26			0.23			1.06			0.16

Other Financial Data

Gross margin		37.3	%		35.9	%		38.1	%		39.0	%
EBITDA(*)		807.6			851.5			3,544.5			887.3
Capital expenditures		199.5			818.5			1,822.3			340.4

Consolidated Balance Sheet Data (at period end)
Cash and cash equivalents		6,610.9			8,128.9			8,128.9			7,989.1
Total assets		18,829.8			21,255.6			21,255.6			21,480.5
Long term debt		1,401.5			1,528.5			1,528.5			1,363.5
Total debt		3,014.6			3,332.5			3,332.5			3,515.5
Total liabilities		5,573.2			6,544.8			6,544.8			6,478.1
Total shareholders’ equity / Net Assets		13,256.6			14,710.8			14,710.8			15,002.4


** For further details, please refer to our consolidated financial statements and notes as at 31 March 2014 on our web site.

	TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million)


	Quarter Ended			Quarter Ended			12 Months Ended			3 Months Ended
	March 31,			December 31,			December 31,			March 31,
	2013			2013			2013			2014


Consolidated Statement of Operations Data
Revenues
Communication fees		2,430.6			2,545.3			10,242.8			2,496.0
Commission fees on betting business		54.3			73.1			230.4			76.2
Monthly fixed fees		20.2			18.2			75.9			16.7
Simcard sales		6.4			7.2			29.8			6.5
Call center revenues and other revenues		176.9			239.8			829.0			259.8
Total revenues		2,688.4			2,883.6			11,407.9			2,855.2
Direct cost of revenues		(1,687.3	)		(1,851.3	)		(7,063.9	)		(1,742.3	)
Gross profit		1,001.1			1,032.3			4,344.0			1,112.9
Administrative expenses		(128.9	)		(152.0	)		(550.3	)		(142.1	)
Selling & marketing expenses		(425.0	)		(510.4	)		(1,843.6	)		(483.1	)
Other Operating Income / (Expense)		(0.3	)		(35.6	)		(58.9	)		(3.5	)

Operating profit before financing costs		446.9			334.3			1,891.2			484.2
Finance costs		(37.4	)		(89.7	)		(204.6	)		(551.9	)
Finance income		166.7			239.4			759.9			248.6
Monetary gain/(loss)		53.5			72.5			176.9			64.5
Share of profit of equity accounted investees		68.6			75.8			297.3			73.6
Income before taxes and minority interest		698.3			632.3			2,920.7			319.0
Income tax expense		(137.1	)		(119.5	)		(591.4	)		(160.2	)
Income before minority interest		561.2			512.8			2,329.3			158.8
Non-controlling interests		4.4			(7.9	)		(3.4	)		200.7
Net income		565.6			504.9			2,325.9			359.5

Net income per share		0.26			0.23			1.06			0.16

Other Financial Data

Gross margin		37.2	%		35.8	%		38.1	%		39.0	%
EBITDA(*)		807.6			851.5			3,544.5			887.3
Capital expenditures		199.5			818.5			1,822.3			340.4

Consolidated Balance Sheet Data (at period end)
Cash and cash equivalents		6,610.9			8,128.9			8,128.9			7,989.1
Total assets		18,862.5			21,284.6			21,284.6			21,508.1
Long term debt		1,401.5			1,528.5			1,528.5			1,363.5
Total debt		3,014.6			3,332.5			3,332.5			3,515.5
Total liabilities		5,578.5			6,549.5			6,549.5			6,482.4
Total shareholders’ equity / Net Assets		13,284.0			14,735.1			14,735.1			15,025.6


** For further details, please refer to our consolidated financial statements and notes as at 31 March 2014 on our web site.

	TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (US$ MILLION)


	Quarter Ended			Quarter Ended			12 Months Ended			3 Months Ended
	March 31,			December 31,			December 31,			March 31,
	2013			2013			2013			2014


Consolidated Statement of Operations Data
Revenues
Communication fees		1,360.3			1,252.0			5,369.0			1,122.5
Commission fees on betting business		30.4			36.0			120.4			34.3
Monthly fixed fees		11.3			9.0			40.0			7.5
Simcard sales		3.6			3.6			15.6			2.9
Call center revenues and other revenues		98.9			117.0			430.4			116.8
Total revenues		1,504.5			1,417.6			5,975.4			1,284.0
Direct cost of revenues		(944.2	)		(905.6	)		(3,693.3	)		(783.6	)
Gross profit		560.3			512.0			2,282.1			500.4
Administrative expenses		(72.1	)		(74.3	)		(286.8	)		(63.9	)
Selling & marketing expenses		(237.7	)		(250.7	)		(964.1	)		(217.1	)
Other Operating Income / (Expense)		(0.2	)		(16.9	)		(29.2	)		(1.5	)

Operating profit before financing costs		250.3			170.1			1,002.0			217.9
Finance costs		(20.8	)		(39.1	)		(95.5	)		(246.6	)
Finance income		93.3			117.3			395.4			111.7
Monetary gain/(loss)		29.6			31.6			82.9			29.5
Share of profit of equity accounted investees		38.3			37.4			155.4			33.1
Income before taxes and minority interest		390.7			317.3			1,540.2			145.6
Income tax expense		(76.7	)		(59.4	)		(310.7	)		(72.1	)
Income before minority interest		314.0			257.9			1,229.5			73.5
Non-controlling interests		2.5			(3.9	)		(1.3	)		89.4
Net income		316.5			254.0			1,228.2			162.9

Net income per share		0.14			0.12			0.56			0.07

Other Financial Data

Gross margin		37.2	%		36.1	%		38.2	%		39.0	%
EBITDA(*)		452.1			420.4			1,858.0			399.2
Capital expenditures		110.3			360.3			853.8			155.4

Consolidated Balance Sheet Data (at period end)
Cash and cash equivalents		3,655.0			3,808.7			3,808.7			3,648.3
Total assets		10,428.8			9,972.6			9,972.6			9,821.9
Long term debt		774.9			716.2			716.2			622.7
Total debt		1,666.7			1,561.4			1,561.4			1,605.4
Total liabilities		3,084.3			3,068.7			3,068.7			2,960.3
Total equity		7,344.5			6,903.9			6,903.9			6,861.6


* Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 11
** For further details, please refer to our consolidated financial statements and notes as at 31 March 2014 on our web site.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2014

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(The Group’s audited consolidated financial statements prepared as at and for the year ended 31 December 2010, 2011 and 2012 were approved by the Audit Committee and the Board of Directors (Board Resolution dated 23 February 2011 and numbered 797, dated 22 February 2012 and numbered 908 and dated 21 February 2013 and numbered 1019, respectively). However, consolidated financial statements prepared as at and for the year ended 31 December 2010 were not approved by the General Assemblies on 21 April 2011, 11 August 2011 and 12 October 2011. The General Assemblies on 29 June 2012, 22 May 2013 and 24 June 2013 could not convene since the quorum required had not been reached and the consolidated financial statements prepared as at and for the year ended 31 December 2010, 2011 and 2012 could not be presented for approval.)

	Note		31 March 2014			31 December 2013
Assets
Property, plant and equipment		9		2,564,029			2,747,813
Intangible assets		10		1,061,038			1,106,871
GSM and other telecommunication operating licenses				496,752			522,065
Computer software				522,702			544,140
Other intangible assets				41,584			40,666
Investment properties				7,380			7,639
Investments in equity accounted investees		11		259,425			250,959
Other investments				3,063			3,851
Other non-current assets				109,585			117,968
Trade receivables		12		258,910			247,823
Deferred tax assets				31,582			34,333
Total non-current assets				4,295,012			4,517,257

Inventories				29,627			32,845
Other investments				36,692			27,028
Due from related parties		21		10,663			10,012
Trade receivables and accrued income		12		1,313,401			1,294,636
Other current assets		13		488,235			282,152
Cash and cash equivalents		14		3,648,305			3,808,708
Total current assets				5,526,923			5,455,381

Total assets				9,821,935			9,972,638


Equity
Share capital				1,636,204			1,636,204
Share premium				434			434
Capital contributions				22,772			22,772
Reserves				(3,267,316	)		(3,105,434	)
Retained earnings				8,597,444			8,435,045
Total equity attributable to equity holders of Turkcell Iletisim Hizmetleri AS				6,989,538			6,989,021
Non-controlling interests				(127,888	)		(85,055	)


Total equity				6,861,650			6,903,966

Liabilities
Loans and borrowings		17		622,678			716,150
Employee benefits				40,970			38,709
Provisions				130,570			135,524
Other non-current liabilities				137,117			127,669
Deferred tax liabilities				21,727			30,751
Total non-current liabilities				953,062			1,048,803

Bank overdraft		14		-			237
Loans and borrowings		17		983,525			846,245
Income taxes payable				71,181			65,074
Trade and other payables				791,788			891,515
Due to related parties		21		49,110			42,278
Deferred income				77,006			92,221
Provisions				34,613			82,299
Total current liabilities				2,007,223			2,019,869

Total liabilities				2,960,285			3,068,672

Total equity and liabilities				9,821,935			9,972,638

The notes on page 7 to 81 are an integral part of these condensed interim consolidated financial statements.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the three months ended 31 March 2014

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

			Three months ended 31 March
	Note		2014			2013

Revenue				1,284,021			1,504,525
Direct costs of revenue				(783,556	)		(944,255	)
Gross profit				500,465			560,270

Other income				3,891			4,108
Selling and marketing expenses				(217,083	)		(237,704	)
Administrative expenses				(63,910	)		(72,141	)
Other expenses				(5,491	)		(4,249	)
Results from operating activities				217,872			250,284


Finance income		7		111,714			93,353
Finance costs		7		(246,551	)		(20,816	)
Net finance income / (expense)				(134,837	)		72,537

Monetary gain				29,447			29,586
Share of profit of equity accounted investees		11		33,119			38,298
Profit before income tax				145,601			390,705

Income tax expense		8		(72,156	)		(76,704	)
Profit for the period				73,445			314,001

Profit / (loss) attributable to:
Owners of Turkcell Iletisim Hizmetleri AS				162,853			316,498
Non-controlling interest				(89,408	)		(2,497	)
Profit for the period				73,445			314,001

Basic and diluted earnings per share		16		0.07			0.14
(in full USD)

The notes on page 7 to 81 are an integral part of these condensed interim consolidated financial statements.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

For the three months ended 31 March 2014

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

	Three months ended 31 March
	2014			2013

Profit for the period		73,445			314,001


Other comprehensive income / (expense):

Items that will not be reclassified to profit or loss:
Foreign currency translation differences		(175,920	)		(109,446	)
Actuarial gain / (loss) arising from employee benefits		(537	)		64
Tax effect of actuarial gain from employee benefits		83			(14	)
		(176,374	)		(109,396	)
Items that will or may be reclassified subsequently to profit or loss:
Change in cash flow hedge reserve		176			(50	)
Foreign currency translation differences		78,516			(23,368	)
Share of foreign currency translation differences of the equity accounted investees		(18,875	)		2,502
Tax effect of foreign currency translation differences		944			(125	)
		60,761			(21,041	)
Other comprehensive expense for the period, net of income tax		(115,613	)		(130,437	)


Total comprehensive income / (expense) for the period		(42,168	)		183,564

Total comprehensive income / (expense) attributable to:
Owners of Turkcell Iletisim Hizmetleri AS		517			186,613
Non-controlling interests		(42,685	)		(3,049	)
Total comprehensive income / (expense) for the period		(42,168	)		183,564

The notes on page 7 to 81 are an integral part of these condensed interim consolidated financial statements.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the three months ended 31 March 2014

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

	Attributable to equity holders of the Company
	Share Capital		Capital Contribution		Share Premium		Legal Reserves		Cash Flow Hedge Reserves			Reserve for Non-Controlling Interest Put Option			Translation Reserve			Retained Earnings		Total		Non-Controlling Interest			Total Equity

Balance at 1 January 2013		1,636,204		22,772		434		534,962		(1,319	)		(258,695	)		(1,903,058	)		7,207,563		7,238,863		(78,719	)		7,160,144
Total comprehensive income/(expense)
Profit/(loss) for the period		-		-		-		-