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 October 25, 2018
Commission File Number: 001-15092
TURKCELL ILETISIM HIZMETLERI A.S.
(Translation of registrant’s name in English)
Aydınevler Mahallesi İnönü Caddesi No:20
Küçükyalı Ofispark
34854 Maltepe
Istanbul, Turkey
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 ☒ 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 ☒
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 ☒
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 ☒
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 October 24, 2018 announcing Turkcell’s Third Quarter 2018 results and Q3 2018 IFRS Report.
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TURKCELL ILETISIM HIZMETLERI
THIRD QUARTER 2018 RESULTS
“OUR DIGITAL BUSINESS MODEL HAS SUSTAINED PROFITABLE GROWTH”
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Third Quarter 2018 Results
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Contents
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HIGHLIGHTS
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COMMENTS BY KAAN TERZIOGLU, CEO
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4
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FINANCIAL AND OPERATIONAL REVIEW
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FINANCIAL REVIEW OF TURKCELL GROUP
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6
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OPERATIONAL REVIEW OF TURKCELL TURKEY
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9
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TURKCELL INTERNATIONAL
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lifecell
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10
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BeST
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11
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Kuzey Kıbrıs Turkcell
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11
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FINTUR
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12
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TURKCELL GROUP SUBSCRIBERS
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12
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OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
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12
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| RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS | 13 | |
| Appendix A – Tables | 15 |
| · |
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”), unless otherwise stated.
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We have three reporting segments:
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“Turkcell Turkey” which comprises all of our telecom related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms “we”, “us”, and “our” in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires.
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“Turkcell International” which comprises all of our telecom related businesses outside of Turkey.
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“Other subsidiaries” which is mainly comprised of our information and entertainment services, call center business revenues, financial services revenues and inter-business eliminations.
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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 September 30, 2018 refer to the same item as at September 30, 2017. For further details, please refer to our consolidated financial statements and notes as at and for September 30, 2018, which can be accessed via our website in the investor relations section (www.turkcell.com.tr).
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Selected financial information presented in this press release for the third quarter and nine months of 2017 and 2018 is based on IFRS figures in TRY terms unless otherwise stated.
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2
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Third Quarter 2018 Results
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In accordance with our strategic approach and IFRS requirements, Fintur is classified as ‘held for sale’ and reported as discontinued operations as of October 2016. Certain operating data that we previously presented with Fintur included has been restated without Fintur.
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In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text.
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Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation.
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FINANCIAL HIGHLIGHTS
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TRY million
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Q317
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Q318
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y/y %
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9M17
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9M18
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y/y %
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Revenue
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4,597
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5,799
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26.1%
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12,966
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15,666
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20.8%
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EBITDA1
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1,632
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2,393
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46.6%
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4,489
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6,549
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45.9%
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EBITDA Margin (%)
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35.5%
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41.3%
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5.8pp
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34.6%
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41.8%
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7.2pp
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Net Income
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601
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241
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(59.8%)
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1,763
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1,157
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(34.4%)
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THIRD QUARTER HIGHLIGHTS
| · |
Strong set of results achieved in a challenging macro environment:
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All-time high quarterly revenue and EBITDA at the Group level
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Group revenues up 26% year-over-year, 59% on two-year cumulative basis
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Resilience at operating profitability level; Group EBITDA including the impact of new IFRS standards up 47% year-over-year, 97% on two-year cumulative basis, EBITDA margin at 41.3%
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Net Profitability despite high volatility in financial markets thanks to prudent financial risk management
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Operational Capex/Sales at 16%, in line with our plan
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Operational performance continued with solid results:
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Record-high mobile ARPU2 growth of 18% on the back of successful execution of digital services-focused strategy and upsell performance
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Strong customer loyalty reflected by mobile churn rate of 2.2%3, and leading NPS in the sector
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Mobile triple play subscriber ratio4 at 63.9%, up 13.5pp year-over-year; multiplay with TV subscribers ratio5 at 47.5%, up 5.2pp year-over-year
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Data usage of 4.5G users at 7.0GB in Q318
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18.2 million 4.5G compatible smartphones on our network, up 0.5 million quarter-on-quarter
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Second installment of dividend distributed on September 17
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We upgrade our guidance6 for 2018. Accordingly, we are targeting revenue growth of 20%-22% up from 16%-18% range and EBITDA margin of 39%-41% up from 37%-40% range. We keep our target operational capex over sales ratio7 of 19%-18% unchanged.
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3
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Third Quarter 2018 Results
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(1) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income.
(2) Excluding M2M
(3) Average monthly churn rate for the respective quarter
(4) Share of mobile voice line users which excludes subscribers who have not used their line in the last 3 months. Triple play refers to mobile customers who use voice, data and one of core digital services.
(5) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed voice users
(6) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2017 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein
(7) Excluding license fee
For further details, please refer to our consolidated financial statements and notes as at and for September 30, 2018 which can be accessed via our website in the investor relations section (www.turkcell.com.tr).
COMMENTS BY KAAN TERZIOGLU, CEO
Our digital business model has sustained profitable growth; we once again raise our guidance
Our business model developed over the past 3.5 years has successfully weathered the tough macro-environment of the third quarter of 2018. Our digital services, which aim to create value for every one of 1440 minutes each day, was downloaded nearly 130 million times. The data usage of 4.5G users reached 7GB per month on average this quarter. Even more customers have promoted us, reflecting higher satisfaction. Such strong operational performance coupled with prudent financial risk management has led to continued growth in revenues and EBITDA1, despite strong macro headwinds.
Our revenues rose 26.1% to TRY5.8 billion with EBITDA reaching TRY2.4 billion on 46.6% year-on-year growth in the third quarter. The EBITDA margin reached 41.3%. In the first nine months, Turkcell Group grew 20.8% printing revenues of TRY15.7 billion with EBITDA of TRY6.5 billion on a 45.9% rise.
Considering the strong nine-month performance, we raise our full year revenue growth and EBITDA margin guidance2 to 20-22% and 39-41%, respectively. Our capital expenditure, monitored for efficiency at all times, remains on track at 18-19% operational capex3 over sales ratio guidance.
Our postpaid subscribers have reached 19 million
Our postpaid base reached 19 million with 191 thousand quarterly net additions, bringing total mobile subscribers to 34.9 million. Nearly 64% of our mobile customers have opted for multi-play4 and actively used our voice, data and at least one digital service, marking a 13.5pp yearly increase. In the fixed segment, total fiber subscribers exceeded 1.3 million on a 43 thousand quarterly increase, while multiplay with TV+ users5 rose to 47.5% of fiber residential subscribers.
Our customers’ higher data and digital services usage, upsell to higher tariffs, and the rising share of postpaid subscribers have led to higher ARPU. Mobile ARPU6 grew by 18% year-on-year to TRY38.7, while fixed residential ARPU reached TRY55.3.
Lifecell customer base expanded with freedom of choice
We introduced a unique curation model for our subscribers using Lifecell tariffs, namely our data-only offering built on the digital services and mobile data platform, in the last quarter. With this model, Lifecell tariff users are free to choose services other than Turkcell’s as part of their tariffs. Fueled by this new model, Lifecell subscribers have almost doubled this quarter too, reaching 1.6 million by October.
Digital exports on track with BiP
Total downloads of our digital services that enrich our customers’ lives have reached 130 million this quarter. We will continue to work towards expanding and improving our portfolio with the ultimate aim of reaching one billion downloads within three years.
4
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Third Quarter 2018 Results
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Total downloads of our digital music platform fizy reached 19.2 million where more than 7.8 million songs are streamed daily on average. 36 live concerts were broadcasted this quarter on fizy. Moreover, fizy is now equipped with “voice over” capability for the visually-impaired. Turkey’s most popular digital publishing platform, Dergilik, with its rich content that includes international magazines has 13 million active users. Over 43 million magazines and newspapers were read in the first nine months. Launched a year ago, Turkey’s search engine, Yaani has been downloaded 6.5 million times to date, with around 1.8 million searches conducted daily on average.
Meanwhile, we have achieved significant milestones in providing a digital infrastructure to other service providers. Our “Fast Log-in” app, which enables safe and fast entry to mobile applications and online websites, has 12.2 million registered users. Fast Log-in is integrated to some 31 services through which around 23 million logins were facilitated during the quarter. With this application, Turkey became the first market in the world to meet the commercial sustainability criteria set by the GSMA (Global Mobile Operators Association). Live-contest application, Hadi is one of those applications integrated to Fast Log-in. Making use of Turkcell e-commerce competences and infrastructure, it is a new media and entertainment platform for mobile internet users. Hadi takes place every evening for 25 minutes where to date, some 700 thousand people have attended in a single session.
We continue to invest in our future, the younger generation
We have continued to invest in our human capital with a view to enlarging our economy though digitization. 232 new graduates have now joined the Turkcell family through our innovative recruitment program GNÇYTNK.
We have already announced our agenda of helping children to avoid cyber risks and thrive in the digital world, and our partnership with the DQ Institute for this purpose. DQ Institute practices were set as global standards for digital literacy and capability by the OECD and IEEE at the World Economic Forum in September. We are proud to offer this valuable service to children and their families over the coming months.
If Turkey wins, Turkcell wins
As Turkey’s Turkcell, we have fully supported the “All-Out War Program Against Inflation” unveiled by the Turkish Government, doubling the data quota assigned to each tariff and our digital services. We believe that Turkey will emerge from this period of volatile macro conditions with an economy stronger than before, and fully support this effort with our digital capacities.
We thank all our colleagues for the role they have played in the successful exceeding of our targets, along with our Board of Directors for their unyielding trust and support. We also express our gratitude to our customers, who have remained with us throughout our success story.
5
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Third Quarter 2018 Results
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(2) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2017 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein
(3) Excluding license fee
(4) Share of mobile voice line users which excludes subscribers who have not used their line in the last 3 months. Triple Play refers to mobile customers who use voice, data and one of core digital services.
(5) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed voice users
(6) Excluding M2M
(7) 3-month active users
FINANCIAL AND OPERATIONAL REVIEW
Financial Review of Turkcell Group
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Profit & Loss Statement (million TRY)
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Quarter
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Nine Months
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Q317
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Q318
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y/y %
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9M17
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9M18
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y/y %
|
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Revenue
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4,597.4
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5,799.2
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26.1%
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12,966.0
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15,666.2
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20.8%
|
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Cost of revenue1
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(2,282.3)
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(2,769.8)
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21.4%
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(6,437.5)
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(7,250.4)
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12.6%
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Cost of revenue1/Revenue
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(49.6%)
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(47.8%)
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1.8pp
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(49.6%)
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(46.3%)
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3.3pp
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Gross Margin1
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50.4%
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52.2%
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1.8pp
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50.4%
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53.7%
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3.3pp
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Administrative expenses
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(194.3)
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(226.8)
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16.7%
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(577.9)
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(635.5)
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10.0%
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Administrative expenses/Revenue
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(4.2%)
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(3.9%)
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0.3pp
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(4.5%)
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(4.1%)
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0.4pp
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Selling and marketing expenses
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(488.4)
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(409.8)
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(16.1%)
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(1,461.3)
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(1,231.1)
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(15.8%)
|
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Selling and marketing expenses/Revenue
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(10.6%)
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(7.1%)
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3.5pp
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(11.3%)
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(7.9%)
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3.4pp
|
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EBITDA2
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1,632.4
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2,392.8
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46.6%
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4,489.3
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6,549.0
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45.9%
|
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EBITDA Margin
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35.5%
|
41.3%
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5.8pp
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34.6%
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41.8%
|
7.2pp
|
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Depreciation and amortization
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(651.0)
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(975.1)
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49.8%
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(1,896.4)
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(3,001.0)
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58.2%
|
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EBIT3
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981.4
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1,417.7
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44.5%
|
2,592.9
|
3,548.0
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36.8%
|
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Net finance income / (costs)
|
(165.4)
|
(868.7)
|
425.2%
|
(216.2)
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(1,668.5)
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671.7%
|
|
Finance income
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175.7
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1,911.3
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987.8%
|
619.1
|
3,158.0
|
410.1%
|
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Finance costs
|
(341.1)
|
(2,779.9)
|
715.0%
|
(835.3)
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(4,826.5)
|
477.8%
|
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Other income / (expense)
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(39.9)
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(123.0)
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208.3%
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(73.0)
|
(186.6)
|
155.6%
|
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Non-controlling interests
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(14.4)
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(39.9)
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177.1%
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(38.2)
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(78.5)
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105.5%
|
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Share of profit of equity accounted investees
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-
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(0.4)
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n.m
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-
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(0.4)
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n.m
|
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Income tax expense
|
(161.1)
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(144.4)
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(10.4%)
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(502.2)
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(456.8)
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(9.0%)
|
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Discontinued operations
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-
|
-
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-
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-
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-
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-
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Net Income
|
600.6
|
241.3
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(59.8%)
|
1,763.2
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1,157.2
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(34.4%)
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(1) Excluding depreciation and amortization expenses.
(2) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income.
(3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses.
Revenue of the Group grew by 26.1% year-on-year in Q318. This was mainly driven by the robust ARPU performance of Turkcell Turkey on the back of successful execution of our digital services-focused strategy and upsell performance.
Turkcell Turkey revenues, comprising 86% of Group revenues, rose by 22.6% to TRY4,959 million (TRY4,044 million).
| - |
Data and digital services revenues grew by 17.7% to TRY3,179 million (TRY2,702 million).
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6
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Third Quarter 2018 Results
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Larger number of data users, higher 4.5G smartphone penetration leading to higher data consumption per user and increased penetration of digital services were the main drivers on the mobile front.
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On the fixed front, a larger subscriber base and increased ratio of multiplay subscribers with TV were the main drivers.
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Wholesale revenues grew by 75.0% to TRY319 million (TRY182 million) on the back of increased carrier traffic and the positive impact of TRY depreciation on FX based revenues.
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Turkcell International revenues, at 7% of Group revenues, increased 55.4% to TRY424 million (TRY273 million), mainly with the rise in lifecell and BeST revenues.
Other subsidiaries’ revenues, at 7% of Group revenues, and which includes information and entertainment services, call center revenues and revenues from financial services rose by 48.2% to TRY416 million (TRY280 million). This was mainly driven by the increase in the consumer finance company’s revenues to TRY252 million (TRY166 million) in Q318.
Cost of revenue (excluding depreciation and amortization) declined to 47.8% (49.6%) as a percentage of revenues in Q318. This was mainly due to the decline in radio expenses (2.7pp), personnel expenses (1.1pp) and other cost items (0.5pp), despite the rise in TRX expenses (1.3pp) and cost of goods sold (1.2pp) as a percentage of revenues.
The impact of new IFRS standards is TRY216 million positive in cost of revenue items.
Administrative expenses declined to 3.9% (4.2%) as a percentage of revenues in Q318. The impact of new IFRS standards is TRY18 million positive.
Selling and marketing expenses declined to 7.1% (10.6%) as a percentage of revenues in Q318. This was driven by the decline in marketing expenses (1.0pp) and selling expenses (2.7pp) despite the increase in other cost items (0.2pp) as a percentage of revenues.
The impact of new IFRS standards is TRY162 million positive.
EBITDA1 rose by 46.6% year-on-year in Q318 leading to a 5.8pp increase in EBITDA margin to 41.3% (35.5%).
The impact of new IFRS standards on EBITDA is TRY382 million positive. Excluding IFRS impacts, EBITDA rose 23.2% on the back of strong revenue growth and effective cost management.
| - |
Turkcell Turkey’s EBITDA grew by 43.0% to TRY2,089 million (TRY1,461 million) with an EBITDA margin of 42.1% (36.1%) on a 6pp increase. The impact of new IFRS standards is TRY331 million positive.
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| - |
Turkcell International EBITDA rose by 104.8% to TRY151 million (TRY74 million) leading to an EBITDA margin of 35.5% (26.9%). The impact of new IFRS standards is TRY40 million positive.
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| - |
The EBITDA of other subsidiaries rose by 56.3% to TRY154 million (TRY98 million) with the increasing contribution of our consumer finance company. The impact of new IFRS standards is TRY10 million positive.
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Depreciation and amortization expenses increased 49.8% in Q318. The impact of new IFRS standards is TRY246 million negative in depreciation and amortization expenses.
Net finance expense rose to TRY869 million (TRY165 million) in Q318, mainly due to higher net foreign exchange losses on FX volatility, and to higher interest expenses resulting from a larger loan portfolio. Our net foreign exchange loss after the positive impact of the hedging instruments this quarter was TRY716 million. Please note that the Group has started to apply hedge accounting as of July 1, 2018 for existing participating cross currency swap and cross currency swap transactions in accordance with the IFRS 9 hedge accounting requirement. Please see the IFRS report for details. Furthermore, the impact of new IFRS standards was TRY52 million negative on net finance expense.
7
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Third Quarter 2018 Results
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Income tax expense declined 10.4% year-on-year in Q318. Please see Appendix A for details.
Net income of the Group was at TRY241 million (TRY601 million) in Q318, mainly due to higher net foreign exchange loss, and increased interest expenses on loans, despite the robust operational performance.
Total cash & debt: Consolidated cash as of September 30, 2018 rose to TRY8,749 million from TRY7,081 million as of June 30, 2018. Excluding the FX swap transactions for TRY borrowing, 77% of our cash is in US$ and 23% is in EUR.
Consolidated debt as of September 30, 2018 rose to TRY23,055 million from TRY18,449 million as of June 30, 2018. This increase was mainly due to the FX impact on foreign currency denominated debt. Moreover, TRY1,086 million of our consolidated debt is comprised of lease obligations resulting from the implementation of IFRS 16.
| · |
Consolidated debt breakdown excluding lease obligations resulting from the implementation of IFRS 16:
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| - |
Turkcell Turkey’s debt was TRY15,776 million, of which TRY8,690 million (US$1,451 million) was denominated in US$, TRY6,667 million (EUR959 million) in EUR, TRY180 million (CNY208 million) in CNY and the remaining TRY239 million in TRY.
|
| - |
The debt balance of lifecell was TRY1,027 million denominated in UAH.
|
| - |
Our consumer finance company had a debt balance of TRY5,161 million, of which TRY2,353 million (US$393 million) was denominated in US$, and TRY1,637 million (EUR236 million) in EUR with the remaining TRY1,171 million in TRY.
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(1) EBITDA is a non-GAAP financial measure. See page 13 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income.
| · |
TRY753.7 million of IFRS 16 lease obligations is denominated in TRY, TRY115.2 million (US$19.2 million) in US$, TRY66.6 million (EUR9.6 million) in EUR and the remaining balance in other local currencies (please note that the figures in parentheses refer to US$ or EUR equivalents).
|
TRY13,249 million of our consolidated debt is set at a floating rate. Excluding the consumer finance business borrowings, TRY4,385 million of consolidated debt will mature within less than a year.
Net debt as of September 30, 2018 was at TRY14,306 million. Excluding lease obligations resulting from the implementation of IFRS 16, net debt was at TRY13,220 million with a net debt to EBITDA ratio of 1.8 times. Excluding consumer finance company consumer loans, our telco only net debt was at TRY8,430 million with a leverage of 1.2 times.
Turkcell Group’s short FX position was at US$255 million as at the end of Q318. This is below the US$500 million level advised by our Board considering the size of our operations and balance sheet. (Please note that this figure takes into account advance payments and hedging but excludes FX swap transactions for TL borrowing).
Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY1,083.7 million (excluding the impact of new IFRS standards) in Q318.
In Q318 and 9M18, operational capital expenditures (excluding license fees) at the Group level were at 16.1% and 16.0% of total revenues, respectively.
|
Capital expenditures (million TRY)
|
Quarter
|
Nine Months
|
||
|
Q317
|
Q318
|
9M17
|
9M18
|
|
|
Turkcell Turkey
|
(873.1)
|
(780.0)
|
(2,104.6)
|
(2,309.8)
|
|
Turkcell International1
|
(60.5)
|
(301.6)
|
(163.1)
|
(712.2)
|
|
Other Subsidiaries1
|
(4.5)
|
(2.0)
|
(15.1)
|
(11.8)
|
|
Capex and License
|
(938.1)
|
(1,083.7)
|
(2,282.8)
|
(3,033.8)
|
(1) The impact from the movement of reporting currency (TRY) against local currencies of subsidiaries in other countries is included in these lines.
8
|
|
Third Quarter 2018 Results
|
Operational Review of Turkcell Turkey
|
Summary of Operational Data
|
Q317
|
Q218
|
Q318
|
y/y %
|
q/q %
|
|
Number of subscribers (million)
|
37.2
|
37.6
|
37.8
|
1.6%
|
0.5%
|
|
Mobile Postpaid (million)
|
18.4
|
18.8
|
19.0
|
3.3%
|
1.1%
|
|
Mobile M2M (million)
|
2.3
|
2.5
|
2.5
|
8.7%
|
-
|
|
Mobile Prepaid (million)
|
16.3
|
16.0
|
15.9
|
(2.5%)
|
(0.6%)
|
|
Fiber (thousand)
|
1,156.5
|
1,288.5
|
1,331.3
|
15.1%
|
3.3%
|
|
ADSL (thousand)
|
917.4
|
916.7
|
917.6
|
-
|
0.1%
|
|
IPTV (thousand)
|
466.6
|
559.9
|
581.5
|
24.6%
|
3.9%
|
|
Churn (%)1
|
|||||
|
Mobile Churn (%)2
|
1.9%
|
1.9%
|
2.2%
|
0.3pp
|
0.3pp
|
|
Fixed Churn (%)
|
1.8%
|
1.5%
|
1.8%
|
-
|
0.3pp
|
|
ARPU (Average Monthly Revenue per User) (TRY)
|
|||||
|
Mobile ARPU, blended
|
30.9
|
32.7
|
36.2
|
17.2%
|
10.7%
|
|
Mobile ARPU, blended (excluding M2M)
|
32.8
|
34.9
|
38.7
|
18.0%
|
10.9%
|
|
Postpaid
|
44.3
|
47.1
|
50.8
|
14.7%
|
7.9%
|
|
Postpaid (excluding M2M)
|
50.0
|
53.7
|
58.1
|
16.2%
|
8.2%
|
|
Prepaid
|
15.7
|
15.8
|
18.9
|
20.4%
|
19.6%
|
|
Fixed Residential ARPU, blended
|
53.5
|
55.4
|
55.3
|
3.4%
|
(0.2%)
|
|
Average mobile data usage per user (GB/user)
|
4.2
|
5.0
|
5.4
|
28.6%
|
8.0%
|
|
Mobile MoU (Avg. Monthly Minutes of usage per subs) blended
|
366.2
|
364.4
|
372.6
|
1.7%
|
2.3%
|
| (1) |
Presentation of churn figures has been changed to demonstrate average monthly churn figures for the respective quarters.
|
| (2) |
In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. Please note that figures for prior periods have not been restated to reflect this change in churn policy.
|
In Q318, total Turkcell Turkey subscribers reached 37.8 million on 591 thousand annual additions on the back of our rich value proposition through quality of our 4.5G network and an attractive digital services portfolio.
Our mobile subscriber base reached 34.9 million by the end of Q318 on 128 thousand quarterly net additions. This was mainly driven by 191 thousand quarterly net additions to our postpaid subscribers, which reached 19 million mainly due to our rich value proposition and pre to post switch performance. Accordingly, the share of postpaid subscribers reached 54.5% (53.0%) of our total mobile subscriber base.
Our fixed subscriber base has continued to grow mainly on 43 thousand quarterly net additions to fiber subscribers. Our fiber customer base grew by 175 thousand on annual basis. IPTV subscribers reached 582 thousand on 22 thousand quarterly and 115 thousand annual net additions. Total TV users including OTT TV only customers reached 3.1 million. As of October, Turkcell TV+ mobile application downloads reached 10.1 million.
In Q318, our average monthly mobile churn rate was at 2.2%, while our average monthly fixed churn rate was at 1.8%.
Mobile ARPU (excluding M2M) rose 18.0% year-on-year driven mainly by increased data and digital services usage, upsell performance and a larger postpaid base. ARPU growth was also supported by the increased share of triple play customers, who use voice, data and digital services combined, to 63.9%3.
Fixed Residential ARPU rose 3.4% in Q318 year-on-year.
Average mobile data usage per user rose by 28.6% in Q318 year-on-year on the back of higher data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users was at 7.0GB in Q318.
In Q318, we continued to increase the 4.5G compatible smartphone penetration on our network. 4.5G compatible smartphones rose to 18.2 million on 0.5 million quarterly additions to 79% of total smartphones in Q318.
9
|
|
Third Quarter 2018 Results
|
TURKCELL INTERNATIONAL
|
lifecell1 Financial Data
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Revenue (million UAH)
|
1,253.3
|
1,367.1
|
9.1%
|
3,606.8
|
3,851.5
|
6.8%
|
|
EBITDA (million UAH)
|
371.9
|
610.0
|
64.0%
|
995.2
|
1,678.6
|
68.7%
|
|
EBITDA margin (%)
|
29.7%
|
44.6%
|
14.9pp
|
27.6%
|
43.6%
|
16.0pp
|
|
Net income / (loss) (million UAH)
|
(92.1)
|
(185.6)
|
101.5%
|
(324.1)
|
(570.5)
|
76.0%
|
|
Capex (million UAH)2
|
234.2
|
576.8
|
146.3%
|
915.8
|
3,099.3
|
238.4%
|
|
Revenue (million TRY)
|
169.1
|
275.0
|
62.6%
|
486.7
|
650.6
|
33.7%
|
|
EBITDA (million TRY)
|
50.2
|
115.0
|
129.1%
|
134.3
|
283.6
|
111.2%
|
|
EBITDA margin (%)
|
29.7%
|
41.8%
|
12.1pp
|
27.6%
|
43.6%
|
16.0pp
|
|
Net income / (loss) (million TRY)
|
(12.4)
|
(34.8)
|
180.6%
|
(43.7)
|
(93.9)
|
114.9%
|
(1) Since July 10, 2015, we hold a 100% stake in lifecell.
(2) Excluding the impact of new IFRS standards
lifecell (Ukraine) revenues rose by 9.1% year-on-year in Q318 in local currency terms, mainly driven by growth in mobile data revenues with increased data users and higher data consumption. EBITDA in local currency terms increased 64.0% year-on-year, which resulted in an EBITDA margin of 44.6% with effective cost control measures and the positive impact of new IFRS standards.
lifecell’s revenues in TRY terms grew by 62.6%, while the EBITDA margin increased to 41.8% year-on-year in Q318. The impact of new IFRS standards on lifecell’s EBITDA is TRY35 million positive in Q318.
|
lifecell Operational Data
|
Q317
|
Q218
|
Q318
|
y/y%
|
q/q %
|
|
Number of subscribers (million)3
|
11.7
|
10.1
|
10.1
|
(13.7%)
|
-
|
|
Active (3 months)4
|
8.2
|
7.8
|
7.6
|
(7.3%)
|
(2.6%)
|
|
MOU (minutes) (12 months)
|
128.2
|
147.4
|
145.8
|
13.7%
|
(1.1%)
|
|
ARPU (Average Monthly Revenue per User), blended (UAH)
|
34.6
|
41.7
|
45.0
|
30.1%
|
7.9%
|
|
Active (3 months) (UAH)
|
50.4
|
55.5
|
59.3
|
17.7%
|
6.8%
|
(3) 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.
(4) Active subscribers are those who in the past three months made a revenue generating activity.
lifecell’s three-month active subscriber base declined to 7.6 million in Q318, mainly due to the declining multiple SIM card usage trend in the country. Blended ARPU increased 30.1% year-on-year in Q318, mostly on rising mobile data consumption. Additionally, lifecell continued to grow higher ARPU customers leveraging the quality of its 3G and 4.5G networks, and its attractive digital services portfolio.
lifecell has continued its 4.5G network roll-out in Q318, launching its services on the 1800 MHz frequency on July 1st in addition to the introduction of services on the 2600 MHz frequency in March. The penetration of 4.5G services continued to rise as reflected by the number of 3-month active 4.5G users, which expanded by over 50% during the quarter. Overall, 3 month active data users on 3G and 4.5G networks in total exceeded 4.2 million, while average data consumption per user ramped up by 156% year-on-year, mainly with the higher data consumption of 4.5G users. Meanwhile, lifecell continued to lead the Ukrainian market with 73% smartphone penetration.
10
|
|
Third Quarter 2018 Results
|
|
BeST1
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Number of subscribers (million)
|
1.6
|
1.6
|
-
|
1.6
|
1.6
|
-
|
|
Active (3 months)
|
1.3
|
1.2
|
(7.7%)
|
1.3
|
1.2
|
(7.7%)
|
|
Revenue (million BYN)
|
29.9
|
32.2
|
7.7%
|
81.4
|
92.0
|
13.0%
|
|
EBITDA (million BYN)
|
1.9
|
5.5
|
189.5%
|
2.5
|
15.2
|
508.0%
|
|
EBITDA margin (%)
|
6.5%
|
17.1%
|
10.6pp
|
3.0%
|
16.5%
|
13.5pp
|
|
Net loss (million BYN)
|
(9.9)
|
(8.5)
|
(14.1%)
|
(32.6)
|
(28.8)
|
(11.7%)
|
|
Capex (million BYN)2
|
3.0
|
1.8
|
(40.0%)
|
8.2
|
7.5
|
(8.5%)
|
|
Revenue (million TRY)
|
53.9
|
87.1
|
61.6%
|
152.2
|
209.1
|
37.4%
|
|
EBITDA (million TRY)
|
3.5
|
14.0
|
300.0%
|
4.5
|
34.8
|
673.3%
|
|
EBITDA margin (%)
|
6.5%
|
16.1%
|
9.6pp
|
3.0%
|
16.6%
|
13.6pp
|
|
Net loss (million TRY)
|
(17.9)
|
(23.2)
|
29.6%
|
(61.2)
|
(64.7)
|
5.7%
|
|
Capex (million TRY)2
|
5.5
|
8.3
|
50.9%
|
14.8
|
21.3
|
43.9%
|
(1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008.
(2) Excluding the impact of new IFRS standards
BeST revenues rose by 7.7% year-on-year in Q318 in local currency terms, mainly on growth in voice, mobile data and device sale revenues. BeST’s EBITDA margin rose to 17.1%, mainly driven by top-line growth and the implementation of new IFRS standards.
BeST’s revenues in TRY terms rose by 61.6% year-on-year in Q318, while its EBITDA margin increased to 16.1%. The impact of new IFRS standards on BeST’s EBITDA is TRY10.7 million positive in Q318.
BeST continued to increase its 4G coverage offering its services in all regions of Belarus. Increasing penetration of 4G services leads to greater data consumption and paves the way for digital services usage. Accordingly, BeST continued to increase the penetration of its digital services within its customer base and saw increasing digital revenues on the back of music, TV and gaming platforms. BeST introduced its new game platform for the kids segment this quarter.
|
Kuzey Kıbrıs Turkcell3 (million TRY)
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Number of subscribers (million)
|
0.5
|
0.5
|
-
|
0.5
|
0.5
|
-
|
|
Revenue
|
40.7
|
45.6
|
12.0%
|
117.0
|
134.3
|
14.8%
|
|
EBITDA
|
14.2
|
16.0
|
12.7%
|
42.4
|
47.3
|
11.6%
|
|
EBITDA margin (%)
|
34.8%
|
35.0%
|
0.2pp
|
36.3%
|
35.2%
|
(1.1pp)
|
|
Net income
|
8.9
|
8.7
|
(2.2%)
|
26.3
|
24.0
|
(8.7%)
|
|
Capex4
|
19.8
|
18.9
|
(4.5%)
|
27.6
|
30.4
|
10.1%
|
(3) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999.
(4) Excluding the impact of new IFRS standards
Kuzey Kıbrıs Turkcell revenues rose by 12.0% year-on-year in Q318, mainly driven by mobile data revenue growth and increase in device sales. EBITDA increased by 12.7%, which led to an EBITDA margin of 35.0% with the positive impact of new IFRS impacts despite the rise in costs of devices sold and interconnection expenses. The impact of new IFRS standards on Kuzey Kıbrıs Turkcell’s EBITDA is TRY1.3 million positive in Q318.
11
|
|
Third Quarter 2018 Results
|
On March 5, 2018, Fintur transferred its 51.3% total shareholding in Azertel Telekomunikasyon Yatirim Diş Ticaret A.Ş to Azerbaijan International Telecom LLC, a fully state-owned company of the Republic of Azerbaijan, for EUR221.7 million.
On March 20, 2018, Fintur completed the transfer of its 99.99% total shareholding in Geocell LLC to Silknet JSC, a joint stock company organized under the laws of Georgia, for a total consideration of US$153 million.
These transactions have no impact on our financial statements since Fintur is classified as “assets held for sale” in our financials.
Turkcell Group Subscribers
Turkcell Group subscribers amounted to approximately 50.3 million as of September 30, 2018. This figure is calculated by taking the number of subscribers of Turkcell Turkey and each of our subsidiaries. It includes the total number of mobile, fiber, ADSL and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell and lifecell Europe.
|
Turkcell Group Subscribers
|
Q317
|
Q218
|
Q318
|
y/y%
|
q/q%
|
|
Mobile Postpaid (million)
|
18.4
|
18.8
|
19.0
|
3.3%
|
1.1%
|
|
Mobile Prepaid (million)
|
16.3
|
16.0
|
15.9
|
(2.5%)
|
(0.6%)
|
|
Fiber (thousand)
|
1,156.5
|
1,288.5
|
1,331.3
|
15.1%
|
3.3%
|
|
ADSL (thousand)
|
917.4
|
916.7
|
917.6
|
0.0%
|
0.1%
|
|
IPTV (thousand)
|
466.6
|
559.9
|
581.5
|
24.6%
|
3.9%
|
|
Turkcell Turkey subscribers (million)1
|
37.2
|
37.6
|
37.8
|
1.6%
|
0.5%
|
|
lifecell (Ukraine)
|
11.7
|
10.1
|
10.1
|
(13.7%)
|
-
|
|
BeST (Belarus)
|
1.6
|
1.6
|
1.6
|
-
|
-
|
|
Kuzey Kıbrıs Turkcell
|
0.5
|
0.5
|
0.5
|
-
|
-
|
|
lifecell Europe2
|
0.3
|
0.3
|
0.2
|
(33.3%)
|
(33.3%)
|
|
Turkcell Group Subscribers (million)
|
51.3
|
50.1
|
50.3
|
(1.9%)
|
0.4%
|
(1) Subscribers to more than one service are counted separately for each service.
(2) The “wholesale traffic purchase” agreement, signed between Turkcell Europe GmbH operating in Germany and Deutsche Telekom for five years in 2010, had been modified to reflect the shift in business model to a “marketing partnership”. The new agreement between Turkcell and a subsidiary of Deutsche Telekom was signed on August 27, 2014. The transfer of Turkcell Europe operations to Deutsche Telekom’s subsidiary was completed on January 15, 2015. Subscribers are still included in the Turkcell Group Subscriber figure. Turkcell Europe was rebranded as lifecell Europe on January 15, 2018.
OVERVIEW OF THE MACROECONOMIC ENVIRONMENT
The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below.
|
|
Quarter
|
Nine Months
|
||||||
|
Q317
|
Q218
|
Q318
|
y/y%
|
q/q%
|
9M17
|
9M18
|
y/y%
|
|
|
GDP Growth (Turkey)
|
11.5%
|
5.2%
|
n.a
|
n.a
|
n.a
|
7.5%
|
n.a
|
n.a
|
|
Consumer Price Index (Turkey) (yoy)
|
11.2%
|
15.4%
|
24.5%
|
13.3pp
|
9.1pp
|
11.2%
|
24.5%
|
13.3pp
|
|
US$ / TRY rate
|
||||||||
|
Closing Rate
|
3.5521
|
4.5607
|
5.9902
|
68.6%
|
31.3%
|
3.5521
|
5.9902
|
68.6%
|
|
Average Rate
|
3.4999
|
4.2639
|
5.5223
|
57.8%
|
29.5%
|
3.5763
|
4.5313
|
26.7%
|
|
EUR / TRY rate
|
||||||||
|
Closing Rate
|
4.1924
|
5.3092
|
6.9505
|
65.8%
|
30.9%
|
4.1924
|
6.9505
|
65.8%
|
|
Average Rate
|
4.1241
|
5.0636
|
6.4356
|
56.0%
|
27.1%
|
3.9867
|
5.3929
|
35.3%
|
|
US$ / UAH rate
|
||||||||
|
Closing Rate
|
26.52
|
26.19
|
28.30
|
6.7%
|
8.1%
|
26.52
|
28.30
|
6.7%
|
|
Average Rate
|
25.94
|
26.24
|
27.43
|
5.7%
|
4.5%
|
26.50
|
27.03
|
2.0%
|
|
US$ / BYN rate
|
||||||||
|
Closing Rate
|
1.9623
|
1.9898
|
2.1121
|
7.6%
|
6.1%
|
1.9623
|
2.1121
|
7.6%
|
|
Average Rate
|
1.9404
|
1.9975
|
2.0408
|
5.2%
|
2.2%
|
1.9100
|
2.0015
|
4.8%
|
12
|
|
Third Quarter 2018 Results
|
Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses and Administrative expenses, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense).
Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of, our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB.
|
Turkcell Group (million TRY)
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Adjusted EBITDA
|
1,632.4
|
2,392.8
|
46.6%
|
4,489.3
|
6,549.0
|
45.9%
|
|
Depreciation and amortization
|
(651.0)
|
(975.1)
|
49.8%
|
(1,896.4)
|
(3,001.0)
|
58.2%
|
|
Finance income
|
175.7
|
1,911.3
|
987.8%
|
619.1
|
3,158.0
|
410.1%
|
|
Finance costs
|
(341.1)
|
(2,779.9)
|
715.0%
|
(835.3)
|
(4,826.5)
|
477.8%
|
|
Other income / (expense)
|
(39.9)
|
(123.0)
|
208.3%
|
(73.0)
|
(186.6)
|
155.6%
|
|
Share of profit of equity accounted investees
|
-
|
(0.4)
|
n.m
|
-
|
(0.4)
|
n.m
|
|
Consolidated profit from continued operations before income tax & minority interest
|
776.1
|
425.6
|
(45.2%)
|
2,303.7
|
1,692.5
|
(26.5%)
|
|
Income tax expense
|
(161.1)
|
(144.4)
|
(10.4%)
|
(502.2)
|
(456.8)
|
(9.0%)
|
|
Consolidated profit from continued operations before minority interest
|
615.0
|
281.2
|
(54.3%)
|
1,801.4
|
1,235.7
|
(31.4%)
|
|
Discontinued operations
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Consolidated profit before minority interest
|
615.0
|
281.2
|
(54.3%)
|
1,801.4
|
1,235.7
|
(31.4%)
|
13
|
|
Third Quarter 2018 Results
|
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 2017 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.
The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers.
ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 8 countries – Turkey, Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan, Kazakhstan, Moldova. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. In 2G and 3G, Turkcell’s population coverage in Turkey is at 99.68% and 98.23%, respectively, as of September 2018. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY5.8 billion revenue in Q318 with total assets of TRY45.4 billion as of September 30, 2018. 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
|
This press release can also be viewed using the Turkcell Investor Relation app, which can be downloaded here for iOS, and here for Android mobile devices.
14
|
|
Third Quarter 2018 Results
|
Appendix A – Tables
Table: Net foreign exchange gain and loss details
|
Million TRY
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Turkcell Turkey
|
(140.4)
|
(1,811.8)
|
n.m
|
(340.3)
|
(2,836.5)
|
733.5%
|
|
Turkcell International
|
(1.3)
|
(80.6)
|
n.m
|
1.1
|
(123.6)
|
n.m
|
|
Other Subsidiaries
|
(19.3)
|
(818.2)
|
n.m
|
(22.6)
|
(1,205.1)
|
n.m
|
|
Net FX loss before hedging
|
(161.0)
|
(2,710.5)
|
n.m
|
(361.8)
|
(4,165.0)
|
n.m
|
|
Fair value gain on derivative financial instruments1
|
87.3
|
1,993.9
|
n.m
|
215.7
|
2,775.2
|
n.m
|
|
Net FX gain / (loss) after hedging
|
(73.7)
|
(716.5)
|
872.2%
|
(146.1)
|
(1,389.8)
|
851.3%
|
|
(1)
|
Definition of fair value gain on derivative financial instruments has been extended to include the impact of interest income and expense in relation to derivative instruments and fair value of FX swaps engaged in during the period to manage operational cash flow balance. Please note that figures for prior periods have not been restated to reflect this change in definition.
|
Table: Income tax expense details
|
Million TRY
|
Quarter
|
Nine Months
|
||||
|
Q317
|
Q318
|
y/y%
|
9M17
|
9M18
|
y/y%
|
|
|
Current tax expense
|
(120.7)
|
(178.3)
|
47.7%
|
(353.7)
|
(540.0)
|
52.7%
|
|
Deferred tax income / (expense)
|
(40.4)
|
33.9
|
(183.9%)
|
(148.5)
|
83.2
|
(156.0%)
|
|
Income Tax expense
|
(161.1)
|
(144.4)
|
(10.4%)
|
(502.2)
|
(456.8)
|
(9.0%)
|
15
|
TURKCELL ILETISIM HIZMETLERI AS
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
As at 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
Note
|
30 September 2018 |
31 December 2017 |
||||||||||
|
Assets
|
||||||||||||
|
Property, plant and equipment
|
9
|
10,542,071
|
9,665,408
|
|||||||||
|
Right-of-use assets
|
11
|
1,444,026
|
-
|
|||||||||
|
Intangible assets
|
10
|
9,873,705
|
8,340,410
|
|||||||||
|
Investment properties
|
15,369
|
980
|
||||||||||
|
Trade receivables
|
135,386
|
155,634
|
||||||||||
|
Receivables from financial services
|
1,322,739
|
1,297,597
|
||||||||||
|
Deferred tax assets
|
140,617
|
96,060
|
||||||||||
|
Investments in equity accounted investees
|
19
|
13,393
|
-
|
|||||||||
|
Held to maturity investments
|
-
|
654
|
||||||||||
|
Other non-current assets
|
838,982
|
356,620
|
||||||||||
|
Total non-current assets
|
24,326,288
|
19,913,363
|
||||||||||
|
Inventories
|
154,950
|
104,102
|
||||||||||
|
Trade receivables and accrued income
|
3,363,060
|
2,848,572
|
||||||||||
|
Due from related parties
|
8,992
|
5,299
|
||||||||||
|
Receivables from financial services
|
3,467,098
|
2,950,523
|
||||||||||
|
Derivative financial instruments
|
2,140,218
|
981,396
|
||||||||||
|
Held to maturity investments
|
12,435
|
11,338
|
||||||||||
|
Cash and cash equivalents
|
8,749,191
|
4,712,333
|
||||||||||
|
Other current assets
|
1,253,215
|
1,160,605
|
||||||||||
|
Subtotal
|
19,149,159
|
12,774,168
|
||||||||||
|
Assets classified as held for sale
|
12
|
1,928,649
|
1,294,938
|
|||||||||
|
Total current assets
|
21,077,808
|
14,069,106
|
||||||||||
|
Total assets
|
45,404,096
|
33,982,469
|
||||||||||
|
Equity
|
||||||||||||
|
Share capital
|
2,200,000
|
2,200,000
|
||||||||||
|
Share premium
|
269
|
269
|
||||||||||
|
Treasury shares (-)
|
(101,114
|
)
|
(56,313
|
)
|
||||||||
|
Additional paid in capital
|
35,026
|
35,026
|
||||||||||
|
Reserves
|
2,060,634
|
1,542,679
|
||||||||||
|
Remeasurements of employee termination benefit
|
(44,776
|
)
|
(44,776
|
)
|
||||||||
|
Retained earnings
|
10,652,643
|
11,312,276
|
||||||||||
|
Total equity attributable to equity holders of
Turkcell Iletisim Hizmetleri AS (“the Company”) |
14,802,682
|
14,989,161
|
||||||||||
|
Non-controlling interests
|
88,210
|
55,927 |
||||||||||
|
Total equity
|
14,890,892
|
15,045,088
|
||||||||||
|
Liabilities
|
||||||||||||
|
Borrowings
|
14
|
14,955,068
|
8,257,995
|
|||||||||
|
Employee benefit obligations
|
233,238
|
197,666
|
||||||||||
|
Provisions
|
239,074
|
197,418
|
||||||||||
|
Deferred tax liabilities
|
1,009,867
|
651,122
|
||||||||||
|
Other non-current liabilities
|
603,414
|
409,337
|
||||||||||
|
Total non-current liabilities
|
17,040,661
|
9,713,538
|
||||||||||
|
Borrowings
|
14
|
8,100,030
|
4,278,154
|
|||||||||
|
Current tax liabilities
|
136,786
|
103,105
|
||||||||||
|
Trade and other payables
|
4,072,284
|
3,696,466
|
||||||||||
|
Due to related parties
|
13
|
628,638
|
6,980
|
|||||||||
|
Deferred revenue
|
241,740
|
193,831
|
||||||||||
|
Provisions
|
183,468
|
835,199
|
||||||||||
|
Derivative financial instruments
|
109,597
|
110,108
|
||||||||||
|
Total current liabilities
|
13,472,543
|
9,223,843
|
||||||||||
|
Total liabilities
|
30,513,204
|
18,937,381
|
||||||||||
|
Total equity and liabilities
|
45,404,096
|
33,982,469
|
||||||||||
The accompanying notes on page 7 to 50 are an integral part of these condensed consolidated interim financial statements.
1
|
TURKCELL ILETISIM HIZMETLERI AS
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS
For the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
| Nine months ended | Three months ended | |||||||||||||||||||
|
Note
|
30 September
2018
|
30 September
2017
|
30 September 2018
|
30 September 2017
|
||||||||||||||||
|
Revenue
|
8
|
14,971,686
|
12,543,344
|
5,547,350
|
4,431,808
|
|||||||||||||||
|
Revenue from financial services
|
8
|
694,470
|
422,703
|
251,890
|
165,619
|
|||||||||||||||
|
Total revenue
|
15,666,156
|
12,966,047
|
5,799,240
|
4,597,427
|
||||||||||||||||
|
Cost of revenue
|
(9,979,957
|
)
|
(8,130,475
|
)
|
(3,626,313
|
)
|
(2,862,264
|
)
|
||||||||||||
|
Cost of revenue from financial services
|
(271,543
|
)
|
(203,474
|
)
|
(118,677
|
)
|
(71,112
|
)
|
||||||||||||
|
Total cost of revenue
|
(10,251,500
|
)
|
(8,333,949
|
)
|
(3,744,990
|
)
|
(2,933,376
|
)
|
||||||||||||
|
Gross profit
|
4,991,729
|
4,412,869
|
1,921,037
|
1,569,544
|
||||||||||||||||
|
Gross profit from financial services
|
422,927
|
219,229
|
133,213
|
94,507
|
||||||||||||||||
|
Total gross profit
|
5,414,656
|
4,632,098
|
2,054,250
|
1,664,051
|
||||||||||||||||
|
Other income
|
65,922
|
51,054
|
21,962
|
18,963
|
||||||||||||||||
|
Selling and marketing expenses
|
(1,231,112
|
)
|
(1,461,344
|
)
|
(409,791
|
)
|
(488,414
|
)
|
||||||||||||
|
Administrative expenses
|
(635,540
|
)
|
(577,884
|
)
|
(226,792
|
)
|
(194,281
|
)
|
||||||||||||
|
Other expenses
|
(252,541
|
)
|
(124,062
|
)
|
(144,916
|
)
|
(58,836
|
)
|
||||||||||||
|
Operating profit
|
3,361,385
|
2,519,862
|
1,294,713
|
941,483
|
||||||||||||||||
|
Finance income
|
6
|
3,158,012
|
619,117
|
1,911,260
|
175,698
|
|||||||||||||||
|
Finance costs
|
6
|
(4,826,511
|
)
|
(835,307
|
)
|
(2,779,933
|
)
|
(341,103
|
)
|
|||||||||||
|
Net finance income / (cost)
|
(1,668,499
|
)
|
(216,190
|
)
|
(868,673
|
)
|
(165,405
|
)
|
||||||||||||
|
Share of profit of equity accounted investees
|
(408
|
)
|
-
|
(408
|
)
|
-
|
||||||||||||||
|
Profit before income tax
|
1,692,478
|
2,303,672
|
425,632
|
776,078
|
||||||||||||||||
|
Income tax expense
|
7
|
(456,748
|
)
|
(502,244
|
)
|
(144,376
|
)
|
(161,087
|
)
|
|||||||||||
|
Profit from the period
|
1,235,730
|
1,801,428
|
281,256
|
614,991
|
||||||||||||||||
|
Profit for the period is attributable to:
|
||||||||||||||||||||
|
Owners of the Company
|
1,157,196
|
1,763,248
|
241,361
|
600,603
|
||||||||||||||||
|
Non-controlling interest
|
78,534
|
38,180
|
39,895
|
14,388
|
||||||||||||||||
|
Total
|
1,235,730
|
1,801,428
|
281,256
|
614,991
|
||||||||||||||||
|
Basic and diluted earnings per share for profit attributable to owners of the Company (in full TL)
|
0.53
|
0.80
|
0.11
|
0.27
|
||||||||||||||||
|
Basic and diluted earnings per share for profit from continuing operations attributable to owners of the Company (in full TL)
|
0.53
|
0.80
|
0.11
|
0.27
|
||||||||||||||||
|
Basic and diluted earnings per share for profit from discontinued operations attributable to owners of the Company (in full TL)
|
-
|
- |
-
|
- |
|
|||||||||||||||
The accompanying notes on page 7 to 50 are an integral part of these condensed consolidated interim financial statements.
2
|
TURKCELL ILETISIM HIZMETLERI AS
CONDENSED CONSOLIDATED INTERIM STATEMENT OF OTHER
COMPREHENSIVE INCOME
For the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
Nine months ended
|
Three months ended
|
|||||||||||||||
|
30 September 2018
|
30 September 2017
|
30 September 2018
|
30 September 2017
|
|||||||||||||
|
Profit for the period
|
1,235,730
|
1,801,428
|
281,256
|
614,991
|
||||||||||||
|
Other comprehensive income / (loss):
|
||||||||||||||||
|
Items that will not be reclassified to profit or loss:
|
||||||||||||||||
|
Remeasurements of employee termination benefits
|
-
|
(1,569
|
)
|
-
|
(1,569
|
)
|
||||||||||
|
Income tax relating to remeasurements of employee termination benefits
|
-
|
314
|
-
|
314
|
||||||||||||
|
-
|
(1,255
|
)
|
-
|
(1,255
|
)
|
|||||||||||
|
Items that may be reclassified to profit or loss:
|
||||||||||||||||
|
Exchange differences on translation of foreign operations
|
406,841
|
38,770
|
155,006
|
13,517
|
||||||||||||
|
Exchange differences arising from discontinued operations
|
633,715
|
9,399
|
408,374
|
12,856
|
||||||||||||
|
Cash flow hedges – effective portion of changes in fair value
|
418,617
|
-
|
418,617
|
-
|
||||||||||||
|
Cash flow hedges – reclassified to profit or loss
|
(1,209,994
|
)
|
-
|
(1,209,994
|
)
|
-
|
||||||||||
|
Income tax relating to these items
|
(188,714
|
)
|
(61,478
|
)
|
(69,419
|
)
|
(20,932
|
)
|
||||||||
|
-Income tax relating to exchange differences
|
(362,817
|
)
|
(61,478
|
)
|
(243.522
|
)
|
-
|
|||||||||
|
-Income tax relating to cash flow hedges
|
174,103
|
-
|
174.103
|
(20,932
|
)
|
|||||||||||
|
60,465
|
(13,309
|
)
|
(297,416
|
)
|
5,441
|
|||||||||||
|
Other comprehensive income / (loss) for the period,
net of income tax
|
60,465
|
(14,564
|
)
|
(297,416
|
)
|
4,186
|
||||||||||
|
Total comprehensive income for the period
|
1,296,195
|
1,786,864
|
(16,160
|
)
|
619,177
|
|||||||||||
|
Total comprehensive income attributable to:
|
||||||||||||||||
|
Owners of the Company
|
1,215,586
|
1,745,500
|
(56,844
|
)
|
604,548
|
|||||||||||
|
Non-controlling interest
|
80,609
|
41,364
|
40,684
|
14,629
|
||||||||||||
|
Total
|
1,296,195
|
1,786,864
|
(16,160
|
)
|
619,177
|
|||||||||||
|
Total comprehensive income attributable to the owners of the Company arises from:
|
||||||||||||||||
|
Continuing operations
|
616,726
|
1,737,038
|
(442,757
|
)
|
587,811
|
|||||||||||
|
Discontinued operations
|
598,860
|
8,462
|
385,913
|
16,737
|
||||||||||||
|
1,215,586
|
1,745,500
|
(56,844
|
)
|
604,548
|
||||||||||||
The accompanying notes on page 7 to 50 are an integral part of these condensed consolidated interim financial statements.
3
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
For the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
Attributable to equity holders of the Company
|
Share Capital
|
Treasury Shares
|
Additional Paid-in Capital
|
Share Premium
|
Legal Reserve (*)
|
Reserve for Non-Controlling Interest Put Option (*)
|
Hedging reserve
|
Remeasurements of Employee Termination Benefits |
Foreign Currency Translation Reserve (*)
|
Retained
Earnings |
Total
|
Non-Controlling Interests
|
Total
Equity |
||||||||||||||||||||||||||||||||||||||||
|
Balance at 1 January 2017
|
2,200,000
|
(65,607
|
)
|
35,026
|
269
|
1,195,204
|
(494,197
|
)
|
-
|
(41,786
|
)
|
401,889
|
12,780,967
|
16,011,765
|
56,632
|
16,068,397
|
||||||||||||||||||||||||||||||||||||
|
Total comprehensive income/(loss)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,763,248
|
1,763,248
|
38,180
|
1,801,428
|
|||||||||||||||||||||||||||||||||||||||
|
Other comprehensive income/(loss)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Foreign currency translation differences
|
-
|
-
|
-
|
-
|
-
|
(5,969
|
)
|
-
|
-
|
(10,524
|
)
|
-
|
(16,493
|
)
|
3,184
|
(13,309
|
)
|
|||||||||||||||||||||||||||||||||||
|
Remeasurements of employee termination benefit
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,255
|
)
|
-
|
-
|
(1,255
|
)
|
-
|
(1,255
|
)
|
||||||||||||||||||||||||||||||||||||
|
Total other comprehensive income/(loss), net of income tax
|
-
|
-
|
-
|
-
|
-
|
(5,969
|
)
|
-
|
(1,255
|
)
|
(10,524
|
)
|
-
|
(17,748
|
)
|
3,184
|
(14,564
|
)
|
||||||||||||||||||||||||||||||||||
|
Total comprehensive income/(loss)
|
-
|
-
|
-
|
-
|
-
|
(5,969
|
)
|
-
|
(1,255
|
)
|
(10,524
|
)
|
1,763,248
|
1,745,500
|
41,364
|
1,786,864
|
||||||||||||||||||||||||||||||||||||
|
Transfer to legal reserves
|
-
|
-
|
-
|
-
|
444,385
|
-
|
-
|
-
|
-
|
(444,385
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||
|
Dividends paid (Note 13)
|
-
|
9,294
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,000,000
|
)
|
(2,990,706
|
)
|
(47,801
|
)
|
(3,038,507
|
)
|
|||||||||||||||||||||||||||||||||||
|
Balance at 30 September 2017
|
2,200,000
|
(56,313
|
)
|
35,026
|
269
|
1,639,589
|
(500,166
|
)
|
(43,041
|
)
|
391,365
|
11,099,830
|
14,766,559
|
50,195
|
14,816,754
|
|||||||||||||||||||||||||||||||||||||
|
Balance at 1 January 2018
|
2,200,000
|
(56,313
|
)
|
35,026
|
269
|
1,643,024
|
(540,045
|
)
|
-
|
(44,776
|
)
|
439,700
|
11,312,276
|
14,989,161
|
55,927
|
15,045,088
|
||||||||||||||||||||||||||||||||||||
|
Changes in accounting policy (Note 3)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
542,736
|
542,736
|
-
|
542,736
|
|||||||||||||||||||||||||||||||||||||||
|
Restated total equity at 1 January 2018
|
2,200,000
|
(56,313
|
)
|
35,026
|
269
|
1,643,024
|
(540,045
|
)
|
-
|
(44,776
|
)
|
439,700
|
11,855,012
|
15,531,897
|
55,927
|
15,587,824
|
||||||||||||||||||||||||||||||||||||
|
Total comprehensive income
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,157,196
|
1,157,196
|
78,534
|
1,235,730
|
|||||||||||||||||||||||||||||||||||||||
|
Other comprehensive income
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Foreign currency translation differences
|
-
|
-
|
-
|
-
|
-
|
(402,463
|
)
|
-
|
-
|
1,078,127
|
-
|
675,664
|
2,075
|
677,739
|
||||||||||||||||||||||||||||||||||||||
|
Change in cash flow hedge reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
(617,274
|
)
|
-
|
-
|
-
|
(617,274
|
)
|
-
|
(617,274
|
)
|
||||||||||||||||||||||||||||||||||||
|
Total other comprehensive income, net of income tax
|
-
|
-
|
-
|
-
|
-
|
(402,463
|
)
|
(617,274
|
)
|
-
|
1,078,127
|
-
|
58,390
|
2,075
|
60,465
|
|||||||||||||||||||||||||||||||||||||
|
Total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
(402,463
|
)
|
(617,274
|
)
|
-
|
1,078,127
|
1,157,196
|
1,215,586
|
80,609
|
1,296,195
|
|||||||||||||||||||||||||||||||||||||
|
Transfer to legal reserves
|
-
|
-
|
-
|
-
|
459,565
|
-
|
-
|
-
|
-
|
(459,565
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||
|
Acquisition of treasury shares
|
-
|
(53,528
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(53,528
|
)
|
-
|
(53,528
|
)
|
||||||||||||||||||||||||||||||||||||
|
Dividends paid (Note 13)
|
-
|
8,727
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,900,000
|
)
|
(1,891,273
|
)
|
(48,326
|
)
|
(1,939,599
|
)
|
|||||||||||||||||||||||||||||||||||
|
Balance at 30 September 2018
|
2,200,000
|
(101,114
|
)
|
35,026
|
269
|
2,102,589
|
(942,508
|
)
|
(617,274
|
)
|
(44,776
|
)
|
1,517,827
|
10,652,643
|
14,802,682
|
88,210
|
14,890,892
|
|||||||||||||||||||||||||||||||||||
(*) Included in reserves in the condensed interim consolidated statement of financial position.
The accompanying notes on page 7 to 50 are an integral part of these condensed consolidated interim financial statements.
4
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
Nine months ended
|
||||||||||||
|
30 September
|
||||||||||||
|
Note
|
2018
|
2017
|
||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Profit before income tax from
|
||||||||||||
|
Continuing operations
|
1,235,730
|
1,801,428
|
||||||||||
|
Discontinued operations
|
-
|
|||||||||||
|
Profit before income tax including discontinued operations
|
1,235,730
|
1,801,428
|
||||||||||
|
Adjustments for:
|
||||||||||||
|
Depreciation and impairment of property, plant and equipment and investment properties
|
1,287,011
|
1,076,163
|
||||||||||
|
Amortization of intangible assets
|
10
|
1,713,992
|
820,269
|
|||||||||
|
Net finance income
|
185,861
|
15,874
|
||||||||||
|
Fair value adjustments to derivatives
|
15
|
(3,094,433
|
)
|
(220,392
|
)
|
|||||||
|
Income tax expense
|
456,748
|
502,244
|
||||||||||
|
Gain on sale of property, plant and equipment
|
(25,904
|
)
|
(17,403
|
)
|
||||||||
|
Unrealized foreign exchange losses on operating assets
|
6,517,313
|
525,120
|
||||||||||
|
Provisions
|
458,094
|
140,683
|
||||||||||
|
Share of profit of equity accounted investees
|
408
|
-
|
||||||||||
|
Deferred revenue
|
62,926
|
108,090
|
||||||||||
|
8,797,746
|
4,752,076
|
|||||||||||
|
Change in operating assets/liabilities
|
||||||||||||
|
Change in trade receivables
|
(360,216
|
)
|
582,802
|
|||||||||
|
Change in due from related parties
|
5,089
|
263
|
||||||||||
|
Change in receivables from financial services
|
(671,807
|
)
|
(1,404,601
|
)
|
||||||||
|
Change in inventories
|
(50,848
|
)
|
34,866
|
|||||||||
|
Change in other current assets
|
199,750
|
(442,544
|
)
|
|||||||||
|
Change in other non-current assets
|
51,541
|
39,089
|
||||||||||
|
Change in due to related parties
|
13,338
|
975,266
|
||||||||||
|
Change in trade and other payables
|
(342,172
|
)
|
(2,531,225
|
)
|
||||||||
|
Change in other non-current liabilities
|
(170,074
|
)
|
6,860
|
|||||||||
|
Change in employee benefit obligations
|
(16,183
|
)
|
21,960
|
|||||||||
|
Changes in other working capital
|
(913,930
|
)
|
(35,079
|
)
|
||||||||
|
Cash generated from operations
|
6,542,234
|
1,999,733
|
||||||||||
|
Interest paid
|
(714,559
|
)
|
(444,359
|
)
|
||||||||
|
Income tax paid
|
(511,562
|
)
|
(360,775
|
)
|
||||||||
|
Net cash inflow from operating activities
|
5,316,113
|
1,194,599
|
||||||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Acquisition of property, plant and equipment
|
9
|
(1,920,069
|
)
|
(1,608,914
|
)
|
|||||||
|
Acquisition of intangible assets
|
10
|
(1,522,376
|
)
|
(641,920
|
)
|
|||||||
|
Proceeds from sale of property, plant and equipment
|
51,113
|
38,034
|
||||||||||
|
Proceeds from advances given for acquisition of property, plant and equipment
|
(530,065
|
)
|
14,683
|
|||||||||
|
Contribution of increase of share capital in joint ventures/associates
|
(13,801
|
)
|
-
|
|||||||||
|
Payments for held to maturity investment
|
(449
|
)
|
(16,546
|
)
|
||||||||
|
Interest received
|
492,353
|
414,989
|
||||||||||
|
Net cash outflow from investing activities
|
(3,443,294
|
)
|
(1,799,674
|
)
|
||||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Dividends received for treasury share
|
5,344
|
6,196
|
||||||||||
|
Proceeds from issues of loans and borrowings
|
35,861,996
|
15,815,697
|
||||||||||
|
Proceeds from issues of bonds
|
2,113,313
|
209,808
|
||||||||||
|
Repayment of borrowings
|
(34,983,381
|
)
|
(14,207,690
|
)
|
||||||||
|
Repayment of bonds
|
(191,312
|
)
|
(400,000
|
)
|
||||||||
|
Proceeds from derivative instruments
|
476,399
|
-
|
||||||||||
|
Repayments of derivative instruments
|
(218,167
|
)
|
-
|
|||||||||
|
Dividends paid to shareholders
|
(1,276,799
|
)
|
(1,933,413
|
)
|
||||||||
|
Dividends paid to non-controlling interest
|
(48,326
|
)
|
(47,801
|
)
|
||||||||
|
Treasury shares
|
(53,528
|
)
|
-
|
|||||||||
|
(Increase)/decrease in cash collateral related to loans
|
(113,107
|
)
|
(148,197
|
)
|
||||||||
|
Payments of lease liabilities
|
(724,627
|
)
|
-
|
|||||||||
|
Net cash (outflow)/inflow from financing activities
|
847,805
|
(705,400
|
)
|
|||||||||
|
Net (decrease)/increase in cash and cash equivalents
|
2,720,624
|
(1,310,475
|
)
|
|||||||||
|
Cash and cash equivalents at 1 January
|
4,712,333
|
6,052,352
|
||||||||||
|
Effects of exchange rate changes on cash and cash equivalents
|
1,316,234
|
164,581
|
||||||||||
|
Cash and cash equivalents at 30 September
|
8,749,191
|
4,906,458
|
||||||||||
The accompanying notes on page 7 to 50 are an integral part of these condensed consolidated interim financial statements.
5
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
Notes to the condensed consolidated interim financial statements
|
Page
|
|
|
1. Reporting entity
|
7
|
|
2. Basis of preparation
|
8
|
|
3. Changes in accounting policies
|
8
|
|
4. Segment information
|
25
|
|
5. Seasonality of operations
|
28
|
|
6. Finance income and costs
|
28
|
|
7. Income tax expense
|
28
|
|
8. Revenue
|
29
|
|
9. Property, plant and equipment
|
31
|
|
10. Intangible assets
|
32
|
|
11. Right of use assets
|
33
|
|
12. Asset held for sale and discontinued operation
|
34
|
|
13. Equity
|
35
|
|
14. Borrowings
|
36
|
|
15. Financial instruments
|
38
|
|
16. Guarantees and purchase obligations
|
44
|
|
17. Commitments and contingencies
|
44
|
|
18. Related parties
|
47
|
|
19. Subsidiaries
|
49
|
|
20. Subsequent events
|
50
|
6
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
| 1. |
Reporting entity
|
Turkcell Iletisim Hizmetleri Anonim Sirketi (the “Company” or “Turkcell”) was incorporated in Turkey on 5 October 1993 and commenced its operations in 1994. The address of the Company’s registered office is Maltepe Aydinevler Mahallesi Inonu Caddesi No: 20, Kucukyali Ofispark / Istanbul. The Company operates under a 25-year GSM license granted in and effective from April 1998, a 20-year 3G license granted in and effective from April 2009 and a 13-year 4.5G license granted in August 2016 and effective from April 2016. The Company’s shares are listed on Borsa Istanbul A.Ş. (“BIST”) and New York Stock Exchange (“NYSE”).
The condensed consolidated interim financial statements of the Company as at and for the nine months ended 30 September 2018 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in an associate.
These condensed consolidated interim financial statements were approved for issue on 24 October 2018.
After failure to comply with corporate governance principles for election of independent board members, the CMB appointed 3 independent board members and 4 members, of which 2 members were chosen from the independent nominees list submitted by TeliaSonera Finland Oyj (“Sonera”), as board members who satisfy the independence criteria in 2013. On 29 March 2018, in accordance with the shareholder proposal at the Ordinary General Assembly, 3 new members were elected to serve for
3 years instead of 3 members who are appointed by the CMB and meet the independence criteria. Since a member of board of directors resigned from his office as of 11 July 2018, Turkcell’s Board of Directors consists of a total of 6 non-executive members including 3 independent members as of
30 September 2018.
3 years instead of 3 members who are appointed by the CMB and meet the independence criteria. Since a member of board of directors resigned from his office as of 11 July 2018, Turkcell’s Board of Directors consists of a total of 6 non-executive members including 3 independent members as of
30 September 2018.
The liquidation process of Financell B.V., which is a wholly owned subsidiary of the Company incorporated in the Netherlands and which is non-operational since December 2015, has been completed as of 14 August 2018.
As the term of the agreement executed between Spor Toto and İnteltek dated 29 August 2008 has been expired on 29 August 2018 and the new tender has not been concluded yet, an agreement of “procurement through bargaining” has been signed between İnteltek and Spor-Toto being effective from 29 August 2018 and for a term of up to 1 year as per to the article 26 of the Law on the Transfer of Rights to Organize Fixed Odds and Paramutual Betting Games Based on Sports Competitions to Private Legal Entities numbered 5738. The agreement of “procurement through bargaining” is a follow-up of the agreement which currently exists and the terms and conditions of this agreement are generally same with the agreement which has been expired as of 29 August 2018.
7
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
| 2. |
Basis of preparation
|
These condensed consolidated interim financial statements for the nine months ended 30 September 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting.
These condensed consolidated interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual financial statements for the year ended 31 December 2017 and any public announcements made by the Company during the interim reporting period.
The accounting policies, presentation and methods of computation are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new accounting policies for transactions occurred during the nine months ended 30 September 2018 as set out in Note 3.
The Group adopted IFRS 9, ”Financial Instruments” and IFRS 15, “Revenue from contracts with customers” for the first time for the period beginning on 1 January 2018. The Group early adopted the new standard, IFRS 16, “Leases” for the first time for the period beginning on 1 January 2018.
The impact of adoption of IFRS 9, ”Financial Instruments ” and IFRS 15, “Revenue from contracts with customers” and IFRS 16, “Leases” on the condensed consolidated interim financial statements and accounting policies are explained under Note 3.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements using the equity method of accounting.
| 3. |
Changes in accounting policies
|
This note explains the impact of the adoption of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases on the group’s condensed consolidated interim financial statements and also discloses the new accounting policies that have been applied from 1 January 2018, where they are different to those applied in prior periods.
| a) |
Impact on the condensed consolidated interim financial statements
|
The impact of adoption of IFRS 9, IFRS 15 and IFRS 16 on the condensed consolidated interim financial position as at 30 September 2018 and for the nine months ended 30 September 2018 are stated as below. The adoptions of these standards do not have a significant impact on the condensed consolidated interim other comprehensive income (OCI) and condensed consolidated interim statement of cash flows.
The following tables show the adjustments recognised for each individual line item. Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. The adjustments are explained in more detail by standard below.
8
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months ended 30 September 2018
(Amounts expressed in thousands of Turkish Liras unless otherwise stated. Currencies other than Turkish Liras are expressed in thousands unless otherwise stated.)
|
|
30 September 2018 As reported
|
Effect Of Change
Due to IFRS 9 |
Effect Of Change
Due to IFRS 15 |
Effect Of Change
Due to IFRS 16 |
30 September 2018 w/o Adoptions
|
||||||||||||||||
|
Assets
|
||||||||||||||||||||
|
Property, plant and equipment
|
10,542,071
|
-
|
-
|
-
|
10,542,071
|
|||||||||||||||
|
Right-of-use assets
|
1,444,026
|
-
|
-
|
1,444,026
|
-
|
|||||||||||||||
|
Intangible assets
|
9,873,705
|
-
|
977,110
|
-
|
||||||||||||||||