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Turkcell Iletisim Hizmetleri A.S. Second Quarter 2011 Results

ISTANBUL July 27, 2011

Turkcell (NYSE:TKC, ISE: TCELL) Turkey June 30, 2011

Please note that all financial data is consolidated and comprises 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. 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.

Highlights of the Quarter

  • Group revenue increased by 7.6% quarter-on-quarter due to momentum gained over the period, leading to a 1.7% year-on-year rise to TRY2,279.2 million (TRY2,241.2 million).

  • Turkey

  • Turkcell Turkey’s mobile internet revenues continued to grow by 55.3% to TRY166.3 million (TRY107.1 million).

  • The contribution of Group subsidiaries to the top line improved to 13.3% (11.4%). Specifically, Turkcell Superonline revenues rose 29.4% to TRY104.7 million (TRY80.9 million).

  • [ 1] Turkey

  • Turkcell Superonline’s operational performance further improved with EBITDA growing by 33.3% to TRY14.0 million (TRY10.5 million).

  • Ukraine US$23.7 million US$20.3 million

  • Belarus (For details, please refer to Finance Review section).

(1)EBITDA is a non-GAAP financial measurement. See pages 14-15 for the reconciliation of EBITDA to net cash from operating activities.

* June 30, 2011 June 30, 2010 June 30, 2011 http://www.turkcell.com.tr )

Turkey

Sureyya Ciliv

Belarus

Turkey’s

Turkey

Reflecting our motto "Get more out of life with Turkcell", we continue efforts that enable our customers to access the internet and information, anytime and anyplace.  We differentiate ourselves with the most advanced technology, the widest coverage and new mobile services.  Meanwhile, in line with our strategy of expanding the use and increasing the number of smartphones, a segment in which we lead the market, we launched Turkcell’s new T20 smartphone to our customers.  Through its android operating system, the T20 offers the mobile services of Turkcell and our partners, as well as NFC capabilities, at a very reasonable price.  Subsequently, the number of smartphones on our network has increased by more than 100%, and mobile internet revenues by more than 50% compared to a year ago.  Going forward, we will continue the initiatives that differentiate us in the eyes of our customers.  

The performance of Group companies also continues to improve.  Turkcell Superonline increased its revenues by 15% in TRY terms and Astelit by 13% in USD terms quarter-on-quarter.  Consequently, the contribution of our subsidiaries to total revenues rose to 13% levels from 11% levels.  And over the upcoming quarters, we expect this contribution to increase further.

We foresee the competitive challenges of the Turkish mobile market, where we generate the bulk of our revenues, continuing into the second half of 2011. Yet despite these challenges, we pursue actions that enhance Turkcell’s competitive positioning, making it more attractive for our customers. Therefore, with the contribution of our consolidated subsidiaries, we expect to achieve targeted growth and profitability levels on a Group basis.

As always, our people remain central to our continued success.  And so I would like to thank all of our customers, employees, business partners, and shareholders for their continued support."

OVERVIEW

In the second quarter, mobile line penetration rose to 86% from 84% a quarter ago, mainly due to the one-time impact of the regulatory decision.  In 2011, we expect the number of mobile lines to grow in parallel to population growth, and mobile line penetration to remain in-line with the year-end 2010 level, at around 85% – 86%.

In the Turkish mobile market, the aggressive pricing competition in the second quarter continued however we have observed some rational moves, particularly in the prepaid segment, where operators cut back usage incentives, and also reflected the Telecommunication Authorities’ price cap increase for voice. The postpaid segment has remained aggressive during the second quarter, with prices offered by competitors for voice packages falling to TRY20 levels from TRY30 a quarter ago.  On the data and terminal front, terminal bundled offers at very low monthly fees continued, with some upward revisions to package prices. However, high incentives remained attached to these terminal bundled offers, resulting in increased penetration of smartphones in the terminal market.  All in all, the competition continued to pursue market share, resulting in further pressure on prices and profitability.

As for Turkcell, in the second quarter, on the prepaid front, we mainly focused on more rational port in offers and profitable voice+ SMS+ data bundled packages. This resulted in a significant decline in churn and an increase in package penetration. On the postpaid front, we attached onnet advantages to all direction usage incentives at profitable levels in order to sustain loyalty and attract new customers. We continued to expand contracted offers, binding most of our premium subscribers. During the quarter, we effectively communicated our acquisition offers, while our sales channel focused on upsell and increasing package penetration.

On the data and terminal front, we continued to promote smartphones and 3G-enabled handsets, particularly through TRY5-15 packages bundled with our Turkcell branded android type T10 smartphone. And in line with our expectations, during the quarter, Turkcell Turkey’s mobile internet revenues rose by 55.3% year-on-year to TRY166.3 million.

Meanwhile, the share of mobile internet and service revenues in Turkcell Turkey’s revenues rose by 3.8 percentage points to 23.4% (19.6%).  Overall the share of our consolidated mobile internet and service revenues rose by 3.4 pp to 22.1% (18.7%).  

Despite continuing price competition, which further intensified towards the end of the second quarter, and resulting pressure on the revenues and profitability of the Turkish market, we continue to pursue actions aimed at achieving targeted growth and profitability levels.   Based on market conditions, both revenue and EBITDA are respectively expected at the lower end of our TRY9,300 – 9,600 million and TRY2,900 – TRY3,050 million guidance in 2011.

Overview of the Macroeconomic Environment

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

                         Q210   Q111   Q211  y/y % chg q/q % chg     TRY / US$ rate     Closing Rate       1.5747 1.5483 1.6302   3.5%      5.3%     Average Rate       1.5266 1.5737 1.5658   2.6%     (0.5%)     Consumer Price     Index              (0.3%)  1.6%   1.8%      -         -     GDP Growth         10.3%  11.0%   n.a.      -         -     UAH/ US$ rate     Closing Rate        7.91   7.96   7.97    0.8%      0.1%     Average Rate        7.92   7.94   7.94    0.3%        -     BYR/ US$ rate     Closing Rate        3.02   3.05   4.96    64.2%     62.6%     Average Rate        2.99   3.02   4.00    33.8%     32.5% 

Financial and Operational Review of the Second Quarter 2011

Turkey’s

Please note that interim financial statements, prepared in accordance with clause 34 of the International Accounting Standards ("IAS") pertaining to "Interim Financial Reporting", will be disclosed containing the condensed set of financial statements, instead of the complete set of financial statements starting from the second quarter of 2011. Within this context, interim financial statements will contain condensed information, while year-end reports will continue to be disclosed with detailed financial information in accordance with IAS 1 concerning the "Presentation of Financial Statements and other Standards".

Financial Review of Turkcell Group      

                                                                         q/q %                                                                 y/y %     Profit & Loss Statement     (million TRY)                 Q210      Q111     Q211        chg      chg     Total Revenue                 2,241.2   2,118.4  2,279.2     1.7%    7.6%     Direct cost of revenues[1]   (1,220.6) (1,249.2)(1,436.3)   17.7%   15.0%     Depreciation and amortization  (277.7)   (278.0)  (381.1)   37.2%   37.1%     Gross Margin                     45.5%     41.0%    37.0% (8.5pp) (4.0pp)     Administrative expenses        (137.6)   (110.3)  (102.0) (25.9%)  (7.5%)     Selling and marketing expenses (436.3)   (411.1)  (400.9)  (8.1%)  (2.5%)     EBITDA[2]                       724.4     625.8    721.1   (0.5%)   15.2%     EBITDA Margin                    32.3%     29.5%    31.6% (0.7pp)   2.1pp     Net finance income / (expense)   38.2      37.0   (128.7)(436.9%)(447.8%)     Finance expense                 (68.1)    (71.6)  (283.9)  316.9%  296.5%     Finance income                  106.3     108.6    155.2    46.0%   42.9%     Share of profit of associates    45.1      56.7     55.8    23.7%  (1.6%)     Other income / (expense)         (6.4)    (27.9)  (195.1)      -      -     Income tax expense             (113.6)    (99.0)  (105.5)  (7.1%)   6.6%     Non-controlling interests        12.3      15.5     12.0   (2.4%) (22.6%)     Net Income                      422.3     330.1    (21.4)(105.1%)(106.5%) 

(1) including depreciation and amortization expenses.

(2) EBITDA is a non-GAAP financial measurement. See pages 14-15 for the reconciliation of EBITDA to net cash from operating activities.

Revenue:

Turkey

Turkcell Turkey’s interconnection revenues increased to TRY194.9 million in Q2 2011 from TRY127.1 million in Q2 2010 as a result of increased incoming minutes, which resulted in increase in the share of interconnection revenues in Turkcell Turkey’s revenues to 9.9% (6.4%).

Direct cost of revenues ( including depreciation and amortization):

Quarter-on-quarter, direct cost of revenues, as a percentage of total revenue increased by 4.0 pp from 59.0% in Q1 2011. This mainly arose from higher depreciation and amortization (up 3.6 pp) and higher interconnection costs (up 1.0 pp), which were partially compensated for by lower network-related costs (down 0.6 pp).

Depreciation and amortization expenses rose by 37.2% year-on-year and 37.1% quarter-on-quarter, mainly as TRY95.5 million of a TRY188.1 million impairment charge relating to BeST was recorded under depreciation and amortization expenses.

In Q2 2011, Turkcell Turkey’s interconnection costs increased to TRY215.2 million from TRY144.1 million in Q2 2010, which resulted in an increase in Turkcell Turkey’s interconnection costs as a percentage of revenue to 10.9% (7.3%).

Administrative expenses:

Compared to the previous quarter, general and administrative expenses as a percentage of revenues dropped 0.7 pp from 5.2% in Q1 2011, which mostly resulted from 0.7 pp lower bad debt expenses as a result of improved collections.

Selling and marketing expenses: June 20, 2011

EBITDA [1] :

Quarter-on-quarter, the EBITDA margin increased from 29.5% in Q1 2011 to 31.6% in Q2 2011, which mainly arose from 0.7 pp lower general and administrative expenses, and 1.8 pp lower selling and marketing expenses despite 0.4 pp higher direct cost of revenues (excluding depreciation and amortization).

Net finance income: Belarus

Compared to the previous quarter, net finance income declined from TRY37.0 million to net finance expense of TRY128.7 million in Q2 2011, which mainly stemmed from the aforementioned reasons above.

Share of profit of equity accounted investees:

The results of our 50%-owned subsidiary A-Tel particularly impacted two items in our financial statements:

  • A-Tel’s revenue generated from Turkcell, amounting to TRY11.1 million in Q2 2011, is netted out from selling and marketing expenses in our consolidated financial statements in proportion to our ownership.
  • The difference between the total net impact of A-Tel and the amount netted out from selling and marketing expenses amounted to TRY11.1 million in Q2 2011, and is recorded in the ‘share of profit of equity accounted investees’ line of our financial statements.

Income tax expense:

     million TRY             Q210    Q111   Q211   y/y % chg q/q % chg     Current tax expense    (149.1) (50.9) (126.8)  (15.0%)   149.1%     Deferred Tax income /     (expense)               35.7   (48.1)  21.3    (40.3%)  (144.3%)     Income Tax expense     (113.6) (99.0) (105.5)  (7.1%)     6.6% 

(1) EBITDA is a non-GAAP financial measurement. See pages 14-15 for the reconciliation of EBITDA to net cash from operating activities

Net income: 31 December 2010

Quarter-on-quarter, net income decreased from TRY330.1 million in Q1 2011 to net loss of TRY21.4 million in Q2 2011.

30 June 2011

Total Debt: June 30, 2011

     Consolidated Cash Flow (million TRY)   Q210     Q111     Q211     EBITDA[1]                             724.4    625.8    721.1     LESS:     Capex and License                    (360.5)  (181.8)  (336.3)     Turkcell                             (221.3)   (94.4)  (200.1)     Ukraine[2]                            (21.7)   (11.4)   (19.7)     Investment & Marketable Securities     47.3      -        -     Net Interest Income/Expense            81.4     60.9    117.2     Other                                (105.2)  (643.5)   (88.3)     Net Change in Debt                    284.3    (50.7)   116.1     Dividends paid                       (859.3)     -        -     Cash Generated                       (187.6)  (189.3)   529.8     Cash Balance                         4,193.0  4,915.8  5,445.8 

(1) EBITDA is a non-GAAP financial measurement. See pages 14-15 for the reconciliation of EBITDA to net cash from operating activities.

(2)The appreciation of reporting currency (TRY) against US$ is included in this line.

Cash Flow Analysis:

In the first half of 2011 group capex amounted to TRY518.1 million, while group capex for FY11 is expected at around TRY1.5 billion.

The other item in cash flow mainly includes the TRY74.6 million payment regarding the tax amnesty for the special communication tax imposition pertaining to years 2005 and 2006. Please note that the respective provision in Q1 2011 financial statements amounted to TRY74.6 million.

Turkey

     Summary of Operational     Data                     Q210  Q111  Q211  y/y % chg q/q % chg      Number of total     subscribers (million)    33.9  33.1  34.1    0.6%      3.0%     Number of postpaid     subscribers (million)     9.8  10.4  10.7    9.2%      2.9%     Number of prepaid     subscribers (million)    24.2  22.7  23.3   (3.7%)     2.6%      ARPU (Average Monthly     Revenue per User),     blended (US$)            12.7  11.7  12.5   (1.6%)     6.8%     ARPU, postpaid (US$)     26.5  24.1  24.4   (7.9%)     1.2%     ARPU, prepaid (US$)       7.4   6.2   7.1   (4.1%)     14.5%      ARPU, blended (TRY)      19.4  18.4  19.6    1.0%      6.5%     ARPU, postpaid (TRY)     40.5  37.9  38.2   (5.7%)     0.8%     ARPU, prepaid (TRY)      11.2   9.8  11.2      -       14.3%      Churn (%)                9.8%  9.3%  6.1%   (3.7pp)   (3.2pp)      MOU (Average Monthly     Minutes of usage per     subscriber), blended     171.0 192.5 219.9   28.6%     14.2% 

Subscribers: June 30, 2011

October 2010

Churn Rate:

MoU:

ARPU:

Other Domestic and International Operations

Turkcell Superonline

Turkcell Superonline, our wholly-owned subsidiary, provides fixed broadband services by investing in the build-up of a fiber-optic network.

                                                                  y/y %  q/q %     Summary data for Turkcell Superonline  Q210   Q111    Q211    chg    chg     Revenue (TRY million)                  80.9   91.1    104.7  29.4%  14.9%     EBITDA[1] (TRY million)                10.5   14.5    14.0   33.3% (3.4%)     EBITDA margin                         13.0%   16.0%   13.3%  0.3pp (2.7pp)     Capex (TRY million)                    65.8   43.0    90.8   38.0% 111.2%     Homepass # (thousand)                  384     637     718   87.0%  12.7% 

(1) EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of Turkcell Superonline’s EBITDA to net cash from operating activities.

In Q2 2011, in line with its continued investments in the fiber-optic infrastructure, Turkcell Superonline’s network reached 718K home passes (HP) indicating an 87.0% year-on-year rise.

Turkcell Superonline’s contribution to Turkcell’s financials continued to improve, recording 29.4% year-on-year revenue growth at TRY104.7 million in Q2 2011. The increase in revenue is mainly due to Turkcell Superonline’s continued focus on the higher-margin residential segment, which grew by 94.4%, and its enhanced synergy with Turkcell’s corporate segment, which increased by 17.1% for the period.

In Q2 2011 EBITDA increased 33.3% year-on-year to TRY14.0 million, mainly due to the increasing share of revenues generated from Turkcell Superonline’s infrastructure. During the quarter, the EBITDA margin remained flat at 13.3% year-on-year. Compared to the previous quarter, EBITDA margin declined by 2.7 pp, mainly due to increased marketing expenses related to the launch of new brand Turkcell Superonline, and to the promotion of convergent offers during the quarter.

With the rising synergy of our subsidiary Turkcell Superonline, its share in Turkcell’s transmission costs reached 58% in Q2 2011. Overall, the share of non-group revenues at Turkcell Superonline was around 60%.

Astelit

Ukraine February 2005

     Summary Data for     Astelit                  Q210   Q111   Q211  y/y % chg q/q % chg      Number of subscribers     (million)*     Total                    11.7   8.7    8.7    (25.6%)      -     Active (3 months)[1]     8.0    6.1    6.4    (20.0%)    4.9%      MoU (minutes)           157.5  218.6  237.3    50.7%     8.6%      Average Revenue per     User      (ARPU) in US$     Total                    2.5    2.9    3.4     36.0%     17.2%     Active (3 months)        3.7    4.3    4.7     27.0%     9.3%      Revenue (UAH million)   709.3  621.5  703.9   (0.8%)     13.3%      Revenue (US$ million)    89.5   78.2   88.3   (1.3%)     12.9%     EBITDA[2] (US$ million)  20.3   18.8   23.7    16.7%     26.1%     EBITDA margin           22.7%  24.0%  26.8%    4.1pp     2.8pp     Net Loss (US$ million)  (17.1) (24.4) (19.8)   15.8%    (18.9%)     Capex (US$ million)      12.9   7.4    11.7   (9.3%)     58.1% 

(1) Active subscribers are those who in the past three months made a transaction which brought revenue to the Company.

(2) EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of Euroasia’s EBITDA to net cash from operating activities. Euroasia holds a 100% stake in Astelit.  

(*) We may occasionally offer campaigns and tariff schemes that have an active subscriber life that is different than the one that we normally use to deactivate subscribers and calculate churn. For example, in Q2 2011, Astelit launched a campaign with a longer than usual active life that generated a significant number of new subscribers. Churn outs of subscribers to this campaign that do not renew would thus not occur until the second half of next year.

US$88.3 million US$89.5 million

US$23.7 million US$20.3 million

Astelit’s subscribers declined to 8.7 million from 11.7 million a year ago. This was mainly because of the change in subscriber definition and churn as of Q3 2010, aimed at closer monitoring of value-adding subscriber behavior. The 3 month active subscriber base increased by 4.9% to 6.4 million compared to Q1 2011, mainly due to our regional campaigns aimed at new acquisition.

Three month active ARPU increased by 27.0% year-on-year and 9.3% quarter-on-quarter, mainly due to launch of new tariff plans, increased revenue from international calls and roaming activities during the quarter. Meanwhile, MoU rose by 50.7% to 237.3 minutes year-on-year and 8.6% quarter-on-quarter.

Fintur

Kazakhstan Azerbaijan Moldova Georgia

     FINTUR               Q210   Q111   Q211  y/y % chg q/q % chg      Subscriber     (million)     Kazakhstan           7.8    9.4    9.7      24%       3%     Azerbaijan           4.2    4.0    4.1     (2%)       2%     Moldova              0.7    1.0    1.0      43%        -     Georgia              1.9    2.1    2.1      11%        -     TOTAL                14.6   16.5   16.9     16%       2%     Revenue (US$     million)     Kazakhstan           249    274    300      20%       9%     Azerbaijan           122    123    134      10%       9%     Moldova               16     16     20      25%       25%     Georgia               40     33     36     (10%)      9%     Other[1]              -      2     (5)       -         -     TOTAL                428    448    485      13%       8% 

(1) Includes intersegment eliminations

     (US$ million)       Q210   Q111  Q211  y/y % chg q/q % chg     Fintur's     contribution to     Turkcell Group's     net income          36.0   42.2  43.6    21.1%     3.3% 

Kazakhstan

US$485 million Kazakhstan

US$43.6 million US$36.0 million

Reconciliation of Non-GAAP Financial Measurements

We believe that EBITDA is a measurement commonly used by companies, analysts and investors in the telecommunications industry, which 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 the presentation of EBITDA 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*                                                     y/y %    q/q %     US$ million              Q210    Q111    Q211    chg      chg      EBITDA                   474.1   397.7  459.3   (3.1%)   15.5%     Income tax expense      (74.2)  (62.9)  (67.4)  (9.2%)    7.2%     Other operating     income/(expense)         (5.3)  (17.6)  (48.5)  815.1%   175.6%     Financial income         (3.4)    0.6    18.4  (641.2%) 2,966.7%     Financial expense       (13.2)  (29.9)  (21.4)  62.1%   (28.4%)     Net increase/(decrease)     in assets and     liabilities             (103.5) (339.1) (55.4) (46.5%)  (83.7%)     Net cash from operating     activities               274.5  (51.2)  285.0    3.8%   (656.6%) 
     Turkcell Superonline      TRY million            Q210   Q111  Q211  y/y % chg  q/q % chg      EBITDA                 10.5   14.5  14.0    33.3%     (3.4%)     Other operating     income/(expense)        0.4   0.1    0.2   (50.0%)    100.0%     Finance income          1.5   0.8    6.2    313.3%    675.0%     Finance expense        (7.3) (9.4)  (8.7)   19.2%     (7.4%)     Net     increase/(decrease) in     assets and liabilities (6.1) (83.8) (2.0)  (67.2%)    (97.6%)     Net cash from     operating activities   (1.0) (77.8)  9.7  (1,070.0%) (112.5%) 
     EUROASIA (Astelit)                                                   y/y %    q/q %     US$ million              Q210   Q111   Q211    chg      chg      EBITDA                   20.3   18.8   22.5   10.8%    19.7%     Other operating     income/(expense)         0.3    0.1    0.3      -      200.0%     Finance income           0.2    0.2    0.1   (50.0%)  (50.0%)     Finance expense         (11.4) (14.2) (12.6)  10.5%   (11.3%)     Net increase/(decrease)     in assets and     liabilities             (5.6)   2.9   (0.5)  (91.1%)  (117.2%)     Net cash from operating     activities               3.9    7.8    9.8    151.3%   25.6% 

June 30, 2010 June 30, 2011 http://www.turkcell.com.tr ).

Turkcell Group Subscribers

June 30, 2011 Turkish Republic Northern Cyprus Northern Cyprus

     Turkcell Group     Subscribers     (million)         Q210   Q111   Q211  y/y % chg q/q % chg      Turkcell          33.9   33.1   34.1    0.6%      3.0%     Ukraine           11.7   8.7    8.7   (25.6%)       -     Fintur            14.6   16.5   16.9     16%       2%     Northern Cyprus   0.3    0.4    0.4     33.3%       -     Belarus           1.5    1.7    1.6     6.7%     (5.9%)     TURKCELL GROUP    62.0   60.4   61.7   (0.5%)     2.2% 

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.  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" or "continue."

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 2010 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.

http://www.turkcell.com.tr

ABOUT TURKCELL

Turkey June 30, 2011 June 30, 2011 US$1.5 billion US$9.5 billion June 30, 2011 July 2000 Turkey http://www.turkcell.com.tr

                                   TURKCELL ILETISIM HIZMETLERI A.S.                                IFRS SELECTED FINANCIALS (TRY Million)                                      Quarter Ended Quarter Ended Quarter Ended                                        June 30,      March 31,     June 30,                                         2010           2011          2011      Consolidated Statement     of Operations Data     Revenues     Communication fees                   2,124.7       1,970.8       2,128.5     Commission fees on betting     business                                 9.7          18.4          18.9     Monthly fixed fees                      28.7          27.9          25.8     Simcard sales                           15.0           7.3           8.4     Call center revenues and other     revenues                                63.1          94.0          97.6     Total revenues                       2,241.2       2,118.4       2,279.2     Direct cost of revenues             (1,220.6)     (1,249.2)     (1,436.3)     Gross profit                         1,020.6         869.2         842.9     Administrative expenses               (137.6)       (110.3)       (102.0)     Selling & marketing expenses          (436.3)       (411.1)       (400.9)     Other Operating Income / (Expense)      (6.4)        (27.9)       (195.1)      Operating profit before financing     costs                                  440.3         319.9         144.9     Finance costs                          (68.1)        (71.6)       (283.9)     Finance income                         106.3         108.6         155.2     Share of profit of equity     accounted investees                     45.1          56.7          55.8     Income before taxes and minority     interest                               523.6         413.6          72.0     Income tax expense                    (113.6)        (99.0)       (105.5)     Income before minority interest        410.0         314.6        (33.4)     Non-controlling interests               12.3          15.5          12.0     Net income                             422.3         330.1        (21.4)      Net income per share                    0.19          0.15        (0.01)      Other Financial Data      Gross margin                             46%           41%           37%     EBITDA(*)                              724.4         625.8         721.1     Capital expenditures                   360.5         181.8         336.3      Consolidated Balance Sheet Data     (at period end)     Cash and cash equivalents            4,193.0       4,915.9       5,445.8     Total assets                        14,071.5      15,151.0      15,523.8     Long term debt                       1,673.7       2,210.3       2,041.8     Total debt                           2,664.4       2,790.8       3,046.0     Total liabilities                    5,331.5       5,187.3       5,543.1     Total shareholders' equity /     Net Assets                           8,740.0       9,963.7       9,980.7     ** For further details, please refer to our consolidated financial        statements and notes as at 30 June 2011 on our web site. 

Cont.

                                                   Half Ended      Half Ended                                                   June 30,        June 30,                                                     2010            2011      Consolidated Statement of Operations Data     Revenues     Communication fees                            4,282.4          4,099.3     Commission fees on betting business              20.5             37.3     Monthly fixed fees                               47.7             53.7     Simcard sales                                    22.0             15.7     Call center revenues and other revenues         117.5            191.6     Total revenues                                4,490.1          4,397.6     Direct cost of revenues                      (2,498.1)        (2,685.5)     Gross profit                                  1,992.0          1,712.1     Administrative expenses                        (262.0)          (212.3)     Selling & marketing expenses                   (828.0)          (812.0)     Other Operating Income / (Expense)              (46.7)          (223.0)                                                                              Operating profit before financing costs         855.3            464.8     Finance costs                                  (118.2)          (355.5)     Finance income                                  222.5            263.8     Share of profit of equity accounted investees    91.2            112.5     Income before taxes and minority interest     1,050.8            485.6     Income tax expense                             (240.3)          (204.5)     Income before minority interest                 810.5            281.2     Non-controlling interests                        29.3             27.5     Net income                                      839.8            308.7      Net income per share                             0.38             0.14      Other Financial Data      Gross margin                                      44%              39%     EBITDA(*)                                     1,435.7          1,346.9     Capital expenditures                            727.1            518.1      Consolidated Balance Sheet Data (at period end)     Cash and cash equivalents                     4,193.0          5,445.8     Total assets                                 14,071.5         15,523.8     Long term debt                                1,673.7          2,041.8     Total debt                                    2,664.4          3,046.0     Total liabilities                             5,331.5          5,543.1     Total shareholders' equity / Net Assets       8,740.0          9,980.7     ** For further details, please refer to our consolidated financial        statements and notes as at 30 June 2011 on our web site.  
                                     TURKCELL ILETISIM HIZMETLERI A.S.                                   IFRS SELECTED FINANCIALS (US$ MILLION)                                    Quarter Ended  Quarter Ended  Quarter Ended                                     June 30,        March 31,      June 30,                                       2010            2011           2011      Consolidated Statement of     Operations Data     Revenues     Communication fees                1,391.4        1,252.6        1,358.8     Commission fees on betting     business                              6.4           11.7           12.1     Monthly fixed fees                   18.8           17.8           16.4     Simcard sales                        10.0            4.6            5.3     Call center revenues and     other revenues                       41.1           59.7           62.4     Total revenues                    1,467.7        1,346.4        1,455.0     Direct cost of revenues            (799.0)        (793.9)        (915.4)     Gross profit                        668.7          552.5          539.6     Administrative expenses             (90.0)         (70.1)         (65.1)     Selling & marketing expenses       (286.1)        (261.3)        (256.9)     Other Operating Income /     (Expense)                            (4.4)         (17.7)        (122.8)      Operating profit before     financing costs                     288.2          203.4           94.8     Finance costs                       (44.8)         (45.6)        (181.5)     Finance income                       69.7           68.9           97.2     Share of profit of equity     accounted investees                  29.6           36.0           35.6     Income before taxes and     minority interest                   342.7          262.7           46.1     Income tax expense                  (74.2)         (62.9)         (67.4)     Income before minority     interest                            268.5          199.8          (21.3)     Non-controlling interests             8.0            9.8            7.8     Net income                          276.5          209.6          (13.5)      Net income per share                 0.13           0.10          (0.01)      Other Financial Data      Gross margin                          46%            41%            37%     EBITDA(*)                           474.1          397.7          459.3     Capital expenditures                220.8          117.4          200.4      Consolidated Balance Sheet Data (at period end)     Cash and cash equivalents         2,662.7        3,175.0        3,340.5     Total assets                      8,936.0        9,785.6        9,522.6     Long term debt                    1,062.9        1,427.6        1,252.5     Total debt                        1,692.0        1,802.5        1,868.5     Total liabilities                 3,385.7        3,350.3        3,400.3     Total equity                      5,550.3        6,435.2        6,122.4     * Please refer to the notes on reconciliation of Non-GAAP Financial       measures on page 14-15     ** For further details, please refer to our consolidated financial        statements and notes as at 30 June 2011 on our web site. 

Cont.

                                                 Half Ended        Half Ended                                                 June 30,          June 30,                                                   2010              2011      Consolidated Statement of Operations Data     Revenues     Communication fees                           2,819.3           2,611.4     Commission fees on betting business             13.5              23.8     Monthly fixed fees                              31.3              34.2     Simcard sales                                   14.6               9.9     Call center revenues and other revenues         77.2             122.1     Total revenues                               2,955.9           2,801.4     Direct cost of revenues                     (1,644.2)         (1,709.3)     Gross profit                                 1,311.7           1,092.1     Administrative expenses                       (172.3)           (135.2)     Selling & marketing expenses                  (545.3)           (518.2)     Other Operating Income / (Expense)             (30.7)           (140.5)      Operating profit before financing costs        563.4             298.2     Finance costs                                  (78.1)           (227.1)     Finance income                                 146.7             166.1     Share of profit of equity accounted investees   60.0              71.6     Income before taxes and minority interest      692.0             308.8     Income tax expense                            (158.1)           (130.3)     Income before minority interest                533.9             178.5     Non-controlling interests                       19.3              17.6     Net income                                     553.2             196.1      Net income per share                            0.25              0.09      Other Financial Data      Gross margin                                     44%               39%     EBITDA(*)                                      944.8             857.0     Capital expenditures                           461.7             317.8      Consolidated Balance Sheet Data (at period end)     Cash and cash equivalents                    2,662.7           3,340.5     Total assets                                 8,936.0           9,522.6     Long term debt                               1,062.9           1,252.5     Total debt                                   1,692.0           1,868.5     Total liabilities                            3,385.7           3,400.3     Total equity                                 5,550.3           6,122.4     * Please refer to the notes on reconciliation of Non-GAAP Financial       measures on page 14-15     ** For further details, please refer to our consolidated financial        statements and notes as at 30 June 2011 on our web site.  
                                   TURKCELL ILETISIM HIZMETLERI A.S.                                 CMB SELECTED FINANCIALS (TRY Million)                                   Quarter Ended  Quarter Ended  Quarter Ended                                     June 30,        March 31,     June 30,                                       2010            2011          2011      Consolidated Statement of Operations Data     Revenues     Communication fees               2,124.7         1,970.8       2,128.5     Commission fees on betting     business                             9.7            18.4          18.9     Monthly fixed fees                  28.7            27.9          25.8     Simcard sales                       15.0             7.3           8.4     Call center revenues and     other revenues                      63.1            94.0          97.6     Total revenues                   2,241.2         2,118.4       2,279.2     Direct cost of revenues         (1,217.7)       (1,247.7)     (1,432.6)     Gross profit                     1,023.5           870.7         846.6     Administrative expenses           (137.6)         (110.3)       (102.0)     Selling & marketing expenses      (436.3)         (411.1)       (400.9)     Other Operating Income /     (Expense)                           (6.9)          (27.8)       (193.9)      Operating profit before     financing costs                    442.7           321.5         149.8     Finance costs                      (68.1)          (71.6)       (283.9)     Finance income                     106.3           108.6         155.2     Share of profit of equity     accounted investees                 45.1            56.7          55.8     Income before taxes and     minority interest                  526.0           415.2          77.0     Income tax expense                (113.1)          (99.8)       (106.7)     Income before minority interest    412.9           315.4         (29.7)     Non-controlling interests           12.3            15.5          12.0     Net income                         425.2           330.9         (17.6)      Net income per share                0.19            0.15         (0.01)      Other Financial Data      Gross margin                         46%             41%           37%     EBITDA(*)                          724.4           625.8         721.1     Capital expenditures               360.5           181.8         336.3      Consolidated Balance Sheet Data (at period end)     Cash and cash equivalents        4,193.0         4,915.9       5,445.8     Total assets                    14,021.4        15,106.1      15,482.3     Long term debt                   1,673.7         2,210.3       2,041.8     Total debt                       2,664.4         2,790.8       3,046.0     Total liabilities                5,321.9         5,180.1       5,536.4     Total shareholders' equity /     Net Assets                       8,699.5         9,926.0       9,946.0     ** For further details, please refer to our consolidated financial        statements and notes as at 30 June 2011 on our web site. 

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