Turkcell Iletisim Hizmetleri Fırst Quarter 2013 Results

           Turkcell Iletisim Hizmetleri Fırst Quarter 2013 Results

"Growth Momentum Sustained"

PR Newswire

ISTANBUL, April 17, 2013

ISTANBUL, April 17, 2013 /PRNewswire/ --





Content

HIGHLIGHTS                    

COMMENTS FROM THE CEO, SUREYYA CILIV

FINANCIAL AND OPERATIONAL REVIEW OF THE FIRST QUARTER 2013    

FINANCIAL REVIEW OF TURKCELL GROUP
OPERATIONAL REVIEW IN TURKEY

OTHER DOMESTIC AND INTERNATIONAL OPERATIONS

ASTELIT
TURKCELL SUPERONLINE
FINTUR
TURKCELL GROUP SUBSCRIBERS

OVERVIEW OF THE MACROECONOMIC ENVIRONMENT

RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS

 

  oPlease note that all financial data is consolidated and comprises that of
    Turkcell Iletisim Hizmetleri A.S., (the "Company", or "Turkcell") and its
    subsidiaries and associates (together referred to as the "Group"). All
    non-financial data is unconsolidated and comprises Turkcell only figures.
    The terms "we", "us", and "our" in this press release refer only to the
    Company, except in discussions of financial data, where such terms refer
    to the Group, and where context otherwise requires.
  oIn this press release, a year-on-year comparison of our key indicators is
    provided and figures in parentheses following the operational and
    financial results for March 31, 2013 refer to the same item as at March
    31, 2012. For further details, please refer to our consolidated financial
    statements and notes as at and for March 31, 2013 which can be accessed
    via our web site in the investor relations section
    (http://www.turkcell.com.tr).
  oIn the tables used in this press release totals may not foot due to
    rounding differences.

HIGLIGHTS OF THE FIRST QUARTER OF 2013

  oTurkcell Group sustained its growth momentum, registering double-digit
    revenue and EBITDA growth year-on-year

  oGroup revenues rose by 13% to TRY2,688 million (TRY2,382 million)

  oGroup EBITDA^[^1^] increased by 15% to TRY808 million (TRY703 million),
    while Group EBITDA margin improved 0.5pp to 30.0% (29.5%)

  oTurkcell Turkey grew by 11% posting revenues of TRY2,201 million (TRY1,984
    million):

  oVoice revenues^[^2^] increased by 9% to TRY1,585 million (TRY1,455
    million)

  oMobile broadband & services revenues rose by 16% to TRY616 million (TRY529
    million), and as a percentage of revenues climbed 1pp to 28% (27%)

  +Mobile broadband revenues rose by 39% to TRY319 million (TRY229 million)

  oTurkcell Turkey's EBITDA increased by 11% to TRY647 million (TRY581
    million), while EBITDA margin was at 29.4% 

  oSubsidiaries maintained their growth momentum, while increasing
    operational profitability

  oRevenues of subsidiaries^[^3^] grew by 23% to TRY488 million (TRY398
    million)

  oEBITDA of subsidiaries^[^3^] improved by 33% to TRY161 million (TRY121
    million)

  oTurkcell Group net income increased by 10% to TRY566 million (TRY515
    million)  

 (Logo: http://photos.prnewswire.com/prnh/20120614/537932-b )

COMMENTS FROM CEO, SUREYYA CILIV

In the first quarter of 2013, Turkcell Group sustained its double-digit growth
momentum achieved in 2012. Consolidated revenues grew by 13% to TRY2.7
billion, and EBITDA reached TRY808 million on 15% growth, while net income
rose to TRY566 million.

Turkcell Turkey registered an 11% rise in revenue stemming from 9% growth in
the voice and 39% rise in mobile broadband business, along with increasing
smartphone penetration. Turkcell Superonline, increasing the minimum fiber
broadband speed in Turkey to 25Mbps, grew by 40%, while increasing its EBITDA
margin to 27%. Meanwhile, our Ukraine operation increased its revenues by 9%
in US$ terms to post an EBITDA margin of 28%, reflecting the successful
implementation of its regional growth strategy.

Competition in the Turkish mobile market continued in 2013 at an accelerated
pace. In this environment, we believe that creating value for our customers
through innovative solutions is worth more than the incremental gain of price
discounts. Accordingly, we have continued to focus on innovation and
operational excellence for superior customer experience so that our customers
continue to see Turkcell as the only choice. On the strength of this vision,
Turkcell has been voted "The Most Admired Company of Turkey" for the sixth
consecutive quarter.

We thank all of our customers, employees, business partners and shareholders,
who together underpin the ongoing success of Turkcell.

(1) EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation
of EBITDA to net cash from operating activities.

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

(3) Including eliminations.

OVERVIEW OF TURKCELL TURKEY

In the first quarter of 2013, competition in the Turkish mobile market
accelerated further. While we witnessed upward price movements in the second
half of last year, the lower pricing environment prevailed as signaled mainly
by the sub-brand offers of one of our competitors, starting in late 2012. The
competitors overall continued to pursue market share gains by further
decreasing the prices of mobile number portability ("MNP") offers in a climate
where prices were already low. As a result of this approach of acquiring
customers from other operators, the MNP market expanded significantly, which
we believe for some time has limited market growth through new subscriptions,
and also pressured profitability. Consequently, there has been no major change
in mobile line penetration, which remained at around the 90% level.

As Turkcell Turkey, we have continued to focus on innovation and operational
excellence to deliver a superior customer experience and create value for our
customers, as opposed to offering the incremental gain of price discounts.
Indeed, our approach has expanded the postpaid subscriber base by 285 thousand
quarterly net additions to 13.5 million, generating 66% of our revenues.
Overall, our total subscriber base decreased by 268 thousand to 34.9 million,
driven by losses in the prepaid segment.

Growth momentum in the smartphone market continued, where we maintained our
leadership with the contribution of our T-series and other affordable devices.
The number of smartphones on our network reached 6.9 million with 0.7 million
quarterly additions, whereby penetration reached 22%. Meanwhile, the "Turkcell
Tablet" further widened access to mobile broadband, offering a superior
customer experience in the growing tablet market. We also promoted speed-based
and shared data plans to further improve customer experience, thereby
highlighting our profitable growth strategy and superior network capabilities.

On the regulatory front, an Information and Communication Technologies
Authority (ICTA) board resolution dated March 13, 2013, raised the lower limit
to be applied on our on-net voice tariffs to 0.0535 TRY/min (previously set at
0.0313 TRY/min), effective as of July 2013. The ICTA also set a lower limit of
0.0291 TRY/SMS on our on-net SMS tariffs. However, regarding these SMS
tariffs, the ICTA, with a further decision dated April 12, 2013, revised the
lower limit to 0.0073 TRY/SMS, effective as of July 2013. In addition, the
ICTA decreased the SMS termination rates for all operators, and accordingly,
Turkcell's SMS termination rate decreased from 0.0170 TRY/SMS to 0.0043
TRY/SMS. However, certain points regarding the implementation of these
decisions remain unclear at the date of this press release. In any case, our
understanding at this time is that these decisions are very likely to have an
adverse impact on our overall business in 2013. Upon obtaining further
clarification regarding these points, we will evaluate and communicate the
resulting material impact, if any, on our 2013 outlook.

As Turkcell Turkey, our business operations are based on providing excellent
service and best customer experience by developing cutting edge technologies.
We have achieved this on the strength of our innovative approach and
substantial, ongoing investment in the technology and service arena. Our
leadership of these efforts has clearly triggered other investments in Turkey,
thus helping to develop local businesses, while contributing to the lives of
our people, and our economy. Consequently, Turkey is now the number one
country in the world in terms population coverage, and one of the leading
providers of the highest speed broadband access through mobile and fiber
technologies. Therefore, in light of this, we believe that in the long run,
the ICTA will introduce the necessary rules and regulations to support equal
access to products and services, as well as investments and a fair competitive
environment.

FINANCIAL AND OPERATIONAL REVIEW OF THE FIRST QUARTER 2013

The following discussion focuses principally on the developments and trends in
our business in the first quarter of 2013 in TRY terms. Selected financial
information for the first and fourth quarters of 2012, and the first quarter
of 2013, both in TRY and US$ prepared in accordance with IFRS and in TRY
prepared in accordance with the Capital Markets Board of Turkey's standards
are also included at the end of this press release.

Financial Review of Turkcell Group


        Profit & Loss Statement (million TRY)   Q112      Q412      Q113     y/y %   q/q %
    Total Revenue                          2,381.8   2,807.3   2,688.4   12.9%  (4.2%)
    Direct cost of revenues[1]            (1,491.3) (1,760.1) (1,687.3)  13.1%  (4.1%)
    Direct cost of revenues[1]/revenues    (62.6%)   (62.7%)   (62.8%)  (0.2pp) (0.1pp)
    Depreciation and amortization          (333.1)   (395.5)   (360.4)   8.2%   (8.9%)
    Gross Margin                            37.4%     37.3%     37.2%   (0.2pp) (0.1pp)
    Administrative expenses                (118.1)   (125.9)   (128.9)   9.1%    2.4%
    Administrative expenses/revenues       (5.0%)    (4.5%)    (4.8%)    0.2pp  (0.3pp)
    Selling and marketing expenses         (402.8)   (469.0)   (425.0)   5.5%   (9.4%)
    Selling and marketing
    expenses/revenues                      (16.9%)   (16.7%)   (15.8%)   1.1pp   0.9pp
    EBITDA[2]                               702.7     847.8     807.6    14.9%  (4.7%)
    EBITDA Margin                           29.5%     30.2%     30.0%    0.5pp  (0.2pp)
    Net finance income / (expense)          161.8     79.4      129.3   (20.1%)  62.8%
    Finance expense                        (58.3)    (79.5)    (37.4)   (35.8%) (53.0%)
    Finance income                          220.1     158.9     166.7   (24.3%)  4.9%
    Share of profit of associates           49.5      42.5      68.6     38.6%   61.4%
    Other income / (expense)                (6.5)    (23.9)     (0.3)   (95.4%) (98.7%)
    Monetary gains / (losses)               40.5      42.6      53.5     32.1%   25.6%
    Non-controlling interests                4.7       3.2       4.4    (6.4%)   37.5%
    Income tax expense                     (104.8)   (136.9)   (137.1)   30.8%   0.1%
    Net Income                              514.8     459.2     565.6    9.9%    23.2%

(1) Including depreciation and amortization expenses.

(2) EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation
of EBITDA to net cash from operating activities.

Revenue grew by 13% year-on-year to TRY2,688.4 million (TRY2,381.8 million)
mainly due to an 11% increase in Turkcell Turkey's revenues and a 23% rise in
the contribution of subsidiaries.

  oTurkcell Turkey posted voice revenue growth of 9% to TRY1,585 million
    (TRY1,455 million), while mobile broadband and services revenues grew by
    16% to TRY616 million (TRY529 million).

  oMobile broadband revenues reached TRY319 million (TRY229 million) on solid
    growth of 39%.
  oMobile broadband and services revenues constituted 28% (27%) of Turkcell
    Turkey revenues.

  oThe contribution of subsidiaries to the topline increased to 18% (17%). In
    particular, Turkcell Superonline grew its revenues by 40% to TRY203
    million (TRY145 million), while Astelit's revenues rose by 9% to US$99
    million (US$91 million).

Compared to the previous quarter, revenues fell by 4%, mainly due to the lower
voice revenues of Turkcell Turkey and a lower contribution from group
companies, driven mainly by seasonality.

Direct cost of revenues grew by 13.1% to TRY1,687.3 million (TRY1,491.3
million), while as a percentage of revenues rising to 62.8% (62.6%) on a
consolidated basis. This was driven mainly by the increase in interconnect
costs (1.3pp) and other cost items (0.1pp), as opposed to the decrease in
network related costs (0.6pp) and depreciation&amortization (0.6pp).

On September, 26^th 2012, the ICTA took the decision enabling users of mobile
lines without subscription to register those lines under their names at no
charge until October 1^st, 2013. Taxes and other fees relevant to the
registration process should be compensated by the user's own mobile operator.
The decision also grants former holders of those mobile lines the right to
appeal the registration process until October 1^st, 2014. Direct cost of
revenues included tax expense of TRY16 million in relation to the registration
of such GSM lines in Q113. We expect a similar impact in the following
quarters until October 1^st, 2013.

Compared to the previous quarter, direct costs as a percentage of revenues
rose by 0.1pp to 62.8% (62.7%), mainly due to increased wages&salaries (0.3pp)
and other cost items (0.5pp), as opposed to the decrease in
depreciation&amortization (0.7pp).

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


        Million TRY              Q112    Q412    Q113     y/y %   q/q %
    Interconnect revenues     221.1   314.1   305.6   38.2%  (2.7%)
    as a % of revenues        11.1%   13.7%   13.9%   2.8pp   0.2pp
    Interconnect costs       (235.0) (308.6) (299.4)  27.4%  (3.0%)
    as a % of revenues       (11.8%) (13.5%) (13.6%) (1.8pp) (0.1pp)

Administrative expenses as a percentage of revenues declined 0.2pp to 4.8%
(5.0%) in Q113. This was driven mainly by the decrease in various cost items.
Compared to the previous quarter, administrative expenses as a percentage of
revenues rose by 0.3pp, driven by increased legal follow up expenses (0.2pp)
and other cost items (0.1pp).

Selling and marketing expenses as a percentage of revenues decreased 1.1pp to
15.8% (16.9%) in Q113 due to the decline in selling expenses (0.9pp) and
marketing expenses (0.5pp), as opposed to the rise in other cost items
(0.3pp). On a quarter-on-quarter basis, selling and marketing expenses as a
percentage of revenues decreased by 0.9pp to 15.8% from 16.7% in Q412, mainly
due to lower marketing expenses (0.6pp) and, selling expenses (0.4pp) as
opposed to the rise in the frequency usage fee (0.1pp).

EBITDA rose by 14.9% to TRY807.6 million (TRY702.7 million) in Q113, while the
EBITDA margin increased to 30.0% (29.5%). The 0.8pp increase in direct cost of
revenues (excluding depreciation and amortization) as a percentage of revenues
was offset by a 1.1pp decrease in selling and marketing expenses, and 0.2pp
fall in administrative expenses.

EBITDA margin declined by 0.2pp compared to the previous quarter due to the
increase in direct cost of revenues (excluding depreciation and amortization)
by 0.8pp and rise in administrative expenses of 0.3pp, which was offset by the
0.9pp decrease in selling and marketing expenses.

The contribution of subsidiaries to Group EBITDA improved by 33% to TRY161
million (TRY121 million) with the improved EBITDA of Turkcell Superonline and
Astelit in Q113 year-on-year. Please also note that in the first quarter of
2013, we achieved positive EBITDA in our Belarusian operations. Compared to
the previous quarter, subsidiaries contribution to Group EBITDA rose by 10%.

Net finance income decreased to TRY129.3 million in Q113 compared to TRY161.8
million in Q112 due to the decline in interest income resulting from lower
interest rates, as well as a translation loss of TRY1 million as opposed to
the translation gain of TRY37 million of Q112.

Compared to the previous quarter, net finance income increased from TRY79.4
million to TRY129.3 million. In Q412, we incurred higher interest charges
related to legal disputes.

(*) EBITDA is a non-GAAP financial measure. See page 12 for the
reconciliation of EBITDA to net cash from operating activities.

Share of profit of equity accounted investees comprising our share in the net
income of unconsolidated investees Fintur and A-Tel, rose by 38.6%
year-on-year to TRY68.6 million (TRY49.5 million) mainly due to the increase
in Fintur's net income. Compared to the previous quarter, our share in the net
income of unconsolidated investees increased 61.4 % to TRY68.6 million
(TRY42.5 million) driven mainly by the increase in Fintur's net income.

Income tax expense stood at TRY137.1 million in Q113 on an increase of 30.8%
compared to the Q112. The taxation charge rose 0.1% compared to Q412. Of the
total tax charge, TRY138.7 million comprised the current tax charges, while
TRY1.6 million of deferred tax was recorded.


        Million TRY                  Q112    Q412    Q113    y/y %   q/q %
    Current Tax expense         (119.1) (172.3) (138.7)  16.5%  (19.5%)
    Deferred Tax Income/expense  14.3    35.4     1.6   (88.8%) (95.5%)
    Income Tax expense          (104.8) (136.9) (137.1)  30.8%   0.1%

Net income rose by 9.9% to TRY565.6 million in Q113 (TRY514.8 million) driven
by higher EBITDA of TRY807.6 million (TRY702.7 million), as opposed to the
decrease in net finance income to TRY129.3 million (TRY161.8 million) and the
increase in depreciation and amortization expenses to TRY360.4 million
(TRY333.1 million).

Net income increased by 23.2% to TRY565.6 million (TRY 459.2 million), mainly
due to higher net finance income of TRY129.3 (TRY79.4 million) and lower
depreciation and amortization expenses of TRY360.4 million (TRY395.5 million),
as opposed to the lower EBITDA of TRY807.6 million (TRY847.8 million).

Total debt as of March 31, 2013, stood at TRY3,015 million (US$1,667 million)
in consolidated terms. The debt balance of Ukraine was TRY1,256 million
(US$694 million), Belarus was TRY911 million (US$504 million) and Turkcell
Superonline was TRY568 million (US$314 million).

TRY2,113 million (US$1,168 million) of our consolidated debt is at a floating
rate, while TRY1,613 million (US$892 million) will mature within less than a
year. As of March 31, 2013, our debt/annual EBITDA ratio in TRY terms
decreased to 90%. (Please note that the figures in parentheses refer to US$
equivalents).

Cash flow analysis: Capital expenditures including non-operational items
amounted to TRY199.5 million in Q113, of which TRY117.1 million was related to
Turkcell Turkey, TRY6.1 million to Astelit, TRY59.2 million to Turkcell
Superonline and TRY7.6 million to BeST. The other cash flow item mainly
related to change in working capital, corporate tax payment and frequency
usage fee payment.


        Consolidated Cash Flow (million TRY)   Q112     Q412     Q113
    EBITDA[1]                             702.7    847.8     807.6
    LESS:
    Capex and License                    (252.9)  (713.4)   (199.5)
    Turkcell                             (160.0)  (399.8)   (117.1)
    Ukraine[2]                            (9.3)    (60.6)    (6.1)
    Investment & Marketable Securities   1,585.8   (32.6)    (2.4)
    Net interest Income/ (expense)        125.3     85.5     129.9
    Other                                (905.6)   391.2   (1,063.2)
    Net Change in Debt                     53.8    (90.4)   (60.4)
    Cash generated                       1,309.1   488.1    (388.0)
    Cash balance                         6,047.5  6,998.9   6,610.9

(1) EBITDA is a non-GAAP financial measurement. See page 12 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.

Operational Review in Turkey


        Summary of Operational data             Q112  Q412  Q113  y/y %  q/q %
    Number of total subscribers (million)   34.5  35.1  34.9   1.2%  (0.6%)
    Postpaid                                12.0  13.2  13.5  12.5%   2.3%
    Prepaid                                 22.5  21.9  21.4  (4.9%) (2.3%)
    ARPU, blended (TRY)                     19.2  21.7  21.0   9.4%  (3.2%)
    Postpaid                                36.5  38.1  36.4  (0.3%) (4.5%)
    Prepaid                                 10.1  12.1  11.5  13.9%  (5.0%)
    ARPU (Average Monthly Revenue per
    User), blended (US$)                    10.7  12.2  11.7   9.3%  (4.1%)
    Postpaid                                20.4  21.3  20.4    -    (4.2%)
    Prepaid                                  5.7   6.8   6.4  12.3%  (5.9%)
    Churn (%)                               7.8%  7.2%  8.5%  0.7pp  1.3pp
    MOU (Average Monthly Minutes of usage
    per subscriber), blended                221.5 244.1 238.8  7.8%  (2.2%)

Subscribers of Turkcell Turkey decreased by 268 thousand to 34.9 million,
driven mainly by losses in the prepaid segment. Meanwhile, with our continued
focus on value creation through innovative solutions, we have expanded our
postpaid subscriber base by 285 thousand to 13.5 million on a quarterly basis.
Consequently, our postpaid subscriber share in the total subscriber base has
further improved to 38.6% (34.8%).

Churn Rate refers to voluntarily and involuntarily disconnected subscribers.
Our churn rate increased to 8.5% in Q113 from 7.8% a year ago, driven mainly
by the ICTA decision discussed under the direct cost of revenues section (page
6). Each GSM line registered due to this decision had to be recorded as a
churn and also as an acquisition in operators' records. Excluding the impact
of this decision, our churn rate would have been standing at 7.9%, a similar
rate compared to the previous year.

MoU increased 7.8% to 238.8 minutes year-on-year driven by higher incentives
and higher package utilizations.

ARPU in TRY terms increased 9.4% to TRY21.0 year-on-year with the rise in the
share of postpaid subscribers, higher voice and mobile data usage. Postpaid
ARPU fell by a slight 0.3% to TRY36.4 (TRY36.5), driven mainly by the dilutive
impact of switches from the prepaid segment. Meanwhile, prepaid ARPU increased
from TRY10.1 in Q112 to TRY11.5 in Q113, due to upward price movements seen in
the last quarter of 2012, as well as to higher package penetration and
increased data usage.

OTHER DOMESTIC AND INTERNATIONAL OPERATIONS

Astelit maintained its solid financial performance in Q113 registering revenue
growth of 9% to US$99.2 million (US$91.4 million) accompanied by double-digit
EBITDA growth of 12.4% to US$28.0 million (US$24.9 million). Revenue growth
was driven mainly by subscriber base growth, along with increase in mobile
data and other value-added services revenue. Meanwhile, operational
profitability improved by 1.0pp to 28.2% (27.2%). Compared to the previous
quarter revenues decreased by 3.7% mainly driven by seasonality.

Astelit increased its registered subscribers by 1.2 million to 11.1 million
year-on-year. Three month active subscribers increased by 1.1 million to 8.2
million (7.1 million) year-on-year with the contribution of the regional
growth strategy, targeting new subscriber acquisitions.

ARPU decreased by 4.7% to US$4.1 (US$4.3) in Q113, driven mainly by price
competition in the market, especially in voice offers. On the other hand, MOU
decreased to 185.4 minutes (195.6 minutes) due to lower usage of new
subscribers.


        Astelit                                Q112   Q412   Q113   y/y %   q/q %
    Number of subscribers (million)[1]     9.9    11.1   11.1   12.1%     -
    Active (3 months)[2]                   7.1    8.0    8.2    15.5%   2.5%
    MOU (minutes)                         195.6  184.5  185.4  (5.2%)   0.5%
    ARPU (Average Monthly Revenue per
    User), blended (US$)                   3.1    3.1    3.0   (3.2%)  (3.2%)
    Active (3 months)                      4.3    4.3    4.1   (4.7%)  (4.7%)
    Revenue (million UAH)                 729.9  823.4  792.5   8.6%   (3.8%)
    Revenue (million US$)                  91.4  103.0   99.2   8.5%   (3.7%)
    EBITDA (million US$)[3]                24.9   27.6   28.0   12.4%   1.4%
    EBITDA margin                         27.2%  26.8%  28.2%   1.0pp   1.4pp
    Net loss (million US$)                (15.7) (18.5) (14.9) (5.1%)  (19.5%)
    Capex (million US$)                    5.3    34.1   3.4   (35.8%) (90.0%)

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

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

(3) EBITDA is a non-GAAP financial measurement. See page 12 for the
reconciliation of Euroasia's EBITDA to net cash from operating activities.
Euroasia holds a 100% stake in Astelit.

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

Turkcell Superonline maintained its solid performance in the first quarter of
2013 registering revenue growth of 40.2% and a nominal EBITDA increase of
91.1%. EBITDA margin improved 7.2pp to 27.3% stimulated by more profitable
data revenues.

Turkcell Superonline continued investments in its fiber network, reaching
approximately 1.4 million home passes in Q113, while fiber subscribers rose by
51.7% to 464 thousand. In 2013, we will continue to focus on increasing our
incity coverage and improving our take-up rate.

In Q113, residential segment revenues grew by 68.9%, driven mainly by
increased FTTX subscriber number. The corporate segment registered 26.1%
growth on rising synergies achieved at the Group level, and the integrated
solutions offered in consequence. The share of the residential and corporate
segment increased to 62.3% (59.3%), while the share of non-group revenues
increased to 74% (69%).


        Turkcell Superonline (million TRY)  Q112   Q412   Q113  y/y %   q/q %
    Revenue                            145.0  190.3  203.3  40.2%   6.8%
    Residential                         42.7   65.7   72.1  68.9%   9.7%
    Corporate                           43.3   51.4   54.6  26.1%   6.2%
    Wholesale                           58.9   73.2   76.6  30.1%   4.6%
    EBITDA [1]                          29.1   39.2   55.6  91.1%   41.8%
    EBITDA Margin                      20.1%  20.6%  27.3%  7.2pp   6.7pp
    Capex                               63.7  159.6   59.2  (7.1%) (62.9%)

(1)EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation
of EBITDA to net cash from operating activities.

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

Fintur continued to improve its market position in Q113, adding approximately
2.8 million net subscribers year-on-year, thereby increasing its total
subscriber base to 21.4 million, driven mainly by growth in Kazakhstan.
Fintur's consolidated revenue increased by 1.3% year-on-year to US$473 million
(US$467 million) in Q113, while revenues decreased by 12.6% quarter-on-quarter
from US$541 million in Q412 mainly due to the impact of seasonality.

We account for our investment in Fintur using the equity method. Fintur's
contribution to net income increased from TRY54.6 million to TRY68.9 million,
while its contribution in US$ terms increased from US$30.3 million to US$38.4
million in Q113. Fintur's contribution to Turkcell's net income was US$27
million in Q412.


        Fintur                            Q112   Q412   Q113   y/y %   q/q %
    Subscribers (million)             18.6   21.2   21.4   15.1%   0.9%
    Kazakhstan                        11.2   13.5   13.8   23.2%   2.2%
    Azerbaijan                        4.2    4.4     4.4    4.8%     -
    Moldova                           1.1    1.3     1.3   18.2%     -
    Georgia                           2.1    2.1     1.9   (9.5%) (9.5%)
    Revenue (million US$)             467    541     473    1.3%  (12.6%)
    Kazakhstan                        280    331     286    2.1%  (13.6%)
    Azerbaijan                        137    151     136   (0.7%) (9.9%)
    Moldova                            17     21     18     5.9%  (14.3%)
    Georgia                            33     38     33      -    (13.2%)
    Other[1]                           -      -       -      -       -
    Fintur's contribution to Group's
    net income                         30     27     38    26.7%   40.7%

(1) Includes intersegment eliminations

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

Turkcell Group Subscribers amounted to approximately 69.2 million as of March
31, 2013. This figure is calculated by taking the number of subscribers in
Turkcell and each of our subsidiaries and unconsolidated investees. It
includes the total number of mobile subscribers in Turkcell Turkey, Astelit
and BeST, as well as in our operations in the Turkish Republic of Northern
Cyprus ("Northern Cyprus"), Fintur and Turkcell Europe. Turkcell Group
subscribers rose by 3.9 million year-on-year, due to Fintur's increased
subscriber base, and the contribution of Astelit. Please note that BeST's
subscribers base declined by 0.7 million year-on-year in line with BeST's
churn policy and value focus approach.


        Turkcell Group Subscribers (million)  Q112   Q412   Q113   y/y %  q/q %
    Turkcell                              34.5   35.1   34.9   1.2%   (0.6%)
    Ukraine                               9.9    11.1   11.1   12.1%   0.0%
    Fintur                                18.6   21.2   21.4   15.1%   0.9%
    Northern Cyprus                       0.4    0.4    0.4      -      -
    Belarus                               1.7    1.1    1.0   (41.2%) (9.1%)
    Turkcell Europe                       0.2    0.3    0.4   100.0%  33.3%
    TURKCELL GROUP                        65.3   69.2   69.2   6.0%     -

OVERVIEW OF THE MACROECONOMIC ENVIRONMENT

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


                                      Q112   Q412   Q113  y/y %  q/q %
    TRY / US$ rate
    Closing Rate                  1.7729 1.7826 1.8087 2.0%   1.5%
    Average Rate                  1.7871 1.7854 1.7865 0.0%   0.1%
    Consumer Price Index (Turkey)  1.5%   2.7%   2.6%  1.1pp (0.1pp)
    GDP Growth (Turkey)            3.2%   1.4%   n.a.  n.a.   n.a.
    UAH/ US$ rate
    Closing Rate                   7.99   7.99   7.99    -      -
    Average Rate                   7.99   7.99   7.99    -      -
    BYR/ US$ rate
    Closing Rate                  8.020  8.570  8.670  8.1%   1.2%
    Average Rate                  8.208  8.548  8.627  5.1%   0.9%

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


        Turkcell (million US$)               Q112    Q412   Q113    y/y %   q/q %
    EBITDA                               393.1  474.8   452.1   15.0%  (4.8%)
    Income tax expense                  (58.7)  (76.6) (76.7)   30.7%   0.1%
    Other operating income / (expense)   (4.9)   25.0   (0.6)  (87.8%)    -
    Financial income                      3.8   (2.6)    4.3    13.2%     -
    Financial expense                   (33.0)  (44.3) (20.6)  (37.6%) (53.5%)
    Net increase / (decrease) in assets
    and liabilities                     (404.5) 274.0  (540.8)  33.7%     -
    Net cash from operating activities  (104.2) 650.3  (182.3)  75.0%     -


        Turkcell Superonline (million TRY)     Q112   Q412   Q113   y/y %   q/q %
    EBITDA                                 29.1   39.2   55.6   91.1%   41.8%
    Income tax expense                      -      -    (0.4)     -       -
    Other operating income / (expense)     0.1    2.4    0.5   400.0%  (79.2%)
    Financial income                       40.1  (0.3)   1.7   (95.8%)    -
    Financial expense                     (41.0) (14.6) (16.1) (60.7%)  10.3%
    Net increase / (decrease) in assets
    and liabilities                       (35.4) (37.7) (84.8) 139.5%  124.9%
    Net cash from operating activities    (7.1)  (11.0) (43.5) 512.7%  295.5%


        Euroasia (million US$)                 Q112   Q412   Q113   y/y %   q/q %
    EBITDA                                 24.9   27.6   28.0   12.4%   1.4%
    Other operating income / (expense)     0.2    0.5    0.9   350.0%   80.0%
    Financial income                       0.2    1.2    1.3   550.0%   8.3%
    Financial expense                     (12.1) (16.1) (15.4)  27.3%  (4.3%)
    Net increase / (decrease) in assets
    and liabilities                        15.8   45.7  (13.6)    -       -
    Net cash from operating activities     29.0   58.9   1.2   (95.9%) (98.0%)

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. This includes in
particular our targets for revenue, EBITDA and capex in 2013.  More
generally, all statements other than statements of historical facts included
in this press release, including, without limitation, certain statements
regarding our operations, financial position and business strategy may
constitute forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking
terminology such as, among others, "will," "expect," "intend," "estimate,"
"believe" 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 2012 filed with the
U.S. Securities and Exchange Commission, and in particular the risk factor
section therein. We undertake no duty to update or revise any forward looking
statements, whether as a result of new information, future events or
otherwise.

ABOUT TURKCELL:Turkcell is the leading communications and technology company
inTurkey, with 34.9 million subscribers as of March 31, 2013. Turkcell is a
leading regional player, with market leadership in five of the nine countries
in which it operates with its approximately 69.2 million subscribers as of
March 31, 2013. It has become one of the first among the global operators to
have implemented HSPA+. It has achieved up to 43.2 Mbps speed using the Dual
Carrier technology, and is continuously working to provide the latest
technology to its customers, e.g. 84 Mbps in the near future. Turkcell
Superonline, a wholly owned subsidiary of Turkcell, is the one and only
telecom operator to offer households fiber broadband connection at speeds of
up to 1,000 Mbps inTurkey. As of February 28, 2013, Turkcell population
coverage is at 99.19% in 2G and 84.26% in 3G. Turkcell reported a TRY2.7
billion (US$1.5 billion) revenue with total assets of TRY18.9 billion (US$10.4
billion) as of March 31, 2013. It has been listed on the NYSE and the ISE
since July 2000, and is the only NYSE-listed company inTurkey. Read more
athttp://www.turkcell.com.tr




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

                      Quarter Ended Quarter Ended 12 Months Ended 3 Months Ended
                        March 31,   December 31,   December 31,     March 31,
                          2012          2012           2012            2013

    Consolidated
    Statement of
    Operations Data
    Revenues
    Communication
    fees                  2,180.9       2,534.5         9,626.7        2,430.6
    Commission fees
    and revenue on
    betting
    business                 35.2          63.0           159.1           54.3
    Monthly fixed
    fees                     24.5          21.7            90.7           20.2
    Simcard sales             6.1           6.4            32.9            6.4
    Call center
    revenues and
    other revenues          135.1         181.7           597.6          176.9
    Total revenues        2,381.8       2,807.3        10,507.0        2,688.4
    Direct cost of
    revenues            (1,489.8)     (1,759.5)       (6,482.1)      (1,685.7)
    Gross profit            892.0       1,047.8         4,024.9        1,002.7
    Administrative
    expenses              (118.1)       (125.9)         (484.2)        (128.9)
    Selling &
    marketing
    expenses              (402.8)       (469.0)       (1,705.7)        (425.0)
    Other Operating
    Income /
    (Expense)               (6.5)        (23.6)         (105.3)          (0.3)

    Operating
    profit before
    financing costs         364.6         429.3         1,729.7          448.5
    Finance costs          (58.3)        (79.5)         (224.2)         (37.4)
    Finance income          220.1         158.9           691.7          166.7
    Monetary gain            40.5          42.6           169.9           53.5
    Share of profit
    of equity
    accounted
    investees                49.5          42.5           218.5           68.6
    Income before
    taxes and
    minority
    interest                616.4         593.8         2,585.6          699.9
    Income tax
    expense               (105.6)       (136.8)         (523.6)        (137.4)
    Income before
    minority
    interest                510.8         457.0         2,062.0          562.5
    Non-controlling
    interests                 4.7           3.2            21.0            4.4
    Net income              515.5         460.2         2,083.0          566.9

    Net income per
    share                    0.23          0.21            0.95           0.26

    Other Financial
    Data

    Gross margin            37.5%         37.3%           38.3%          37.3%
    EBITDA(*)               702.7         847.8         3,241.5          807.6
    Capital
    expenditures            252.9         713.4         1,738.8          199.5

    Consolidated
    Balance Sheet
    Data (at period
    end)
    Cash and cash
    equivalents           6,047.5       6,998.9         6,998.9        6,610.9
    Total assets         17,119.0      18,653.0        18,653.0       18,829.8
    Long term debt          769.8       1,103.8         1,103.8        1,401.5
    Total debt            3,359.3       3,039.6         3,039.6        3,014.6
    Total
    liabilities           5,825.9       5,918.1         5,918.1        5,573.2
    Total
    shareholders'
    equity / Net
    Assets               11,293.1      12,734.9        12,734.9       13,256.6

    ** For further details, please refer to our consolidated financial statements and
    notes as at 31 March 2013 on our web site.


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

                      Quarter Ended Quarter Ended 12 Months Ended 3 Months Ended
                        March 31,   December 31,   December 31,     March 31,
                          2012          2012           2012            2013

    Consolidated
    Statement of
    Operations Data
    Revenues
    Communication
    fees                  2,180.9       2,534.5        9,626.7        2,430.6
    Commission fees
    and revenue on
    betting
    business                 35.2          63.0          159.1           54.3
    Monthly fixed
    fees                     24.5          21.7          90.7            20.2
    Simcard sales             6.1           6.4           32.9            6.4
    Call center
    revenues and
    other revenues          135.1         181.7         597.6           176.9
    Total revenues        2,381.8       2,807.3       10,507.0        2,688.4
    Direct cost of
    revenues            (1,491.3)     (1,760.1)       (6,487.3)      (1,687.3)
    Gross profit            890.5       1,047.2         4,019.7        1,001.1
    Administrative
    expenses              (118.1)       (125.9)         (484.2)        (128.9)
    Selling &
    marketing
    expenses              (402.8)       (469.0)       (1,705.7)        (425.0)
    Other Operating
    Income /
    (Expense)               (6.5)        (23.9)         (105.2)          (0.3)

    Operating
    profit before
    financing costs         363.1         428.4         1,724.6          446.9
    Finance costs          (58.3)        (79.5)         (224.2)         (37.4)
    Finance income          220.1         158.9           691.7          166.7
    Monetary gain            40.5          42.6           169.9           53.5
    Share of profit
    of equity
    accounted
    investees                49.5          42.5           218.5           68.6
    Income before
    taxes and
    minority
    interest                614.9         592.9         2,580.5          698.3
    Income tax
    expense               (104.8)       (136.9)         (522.5)        (137.1)
    Income before
    minority
    interest                510.1         456.0         2,058.0          561.2
    Non-controlling
    interests                 4.7           3.2            21.0            4.4
    Net income              514.8         459.2         2,079.0          565.6

    Net income per
    share                    0.23          0.21            0.95           0.26

    Other Financial
    Data

    Gross margin            37.4%         37.3%           38.3%          37.2%
    EBITDA(*)               702.7         847.8         3,241.5          807.6
    Capital
    expenditures            252.9         713.4         1,738.8          199.5

    Consolidated
    Balance Sheet
    Data (at period
    end)
    Cash and cash
    equivalents           6,047.5       6,998.9         6,998.9        6,610.9
    Total assets         17,157.1      18,687.4        18,687.4       18,862.5
    Long term debt          769.8       1,103.8         1,103.8        1,401.5
    Total debt            3,359.3       3,039.6         3,039.6        3,014.6
    Total
    liabilities           5,832.0       5,923.7         5,923.7        5,578.5
    Total
    shareholders'
    equity / Net
    Assets               11,325.1      12,763.7        12,763.7       13,284.0

    ** For further details, please refer to our consolidated financial statements
    and notes as at 31 March 2013 on our web site.

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

                      Quarter Ended Quarter Ended 12 Months Ended 3 Months Ended
                        March 31,   December 31,   December 31,     March 31,
                          2012          2012           2012            2013

    Consolidated
    Statement of
    Operations Data
    Revenues
    Communication
    fees                  1,220.9       1,419.6        5,374.0         1,360.3
    Commission fees
    and revenue on
    betting
    business                 19.7          35.3           89.0            30.4
    Monthly fixed
    fees                     13.7          12.1           50.6            11.3
    Simcard sales             3.4           3.6           18.3             3.6
    Call center
    revenues and
    other revenues           75.6         101.9          333.9            98.9
    Total revenues        1,333.3       1,572.5        5,865.8         1,504.5
    Direct cost of
    revenues              (835.0)       (986.1)       (3,622.3)        (944.2)
    Gross profit            498.3         586.4        2,243.5           560.3
    Administrative
    expenses               (66.2)        (70.5)         (270.5)         (72.1)
    Selling &
    marketing
    expenses              (225.8)       (262.8)         (953.2)        (237.7)
    Other Operating
    Income /
    (Expense)               (3.6)        (13.4)          (58.8)          (0.2)

    Operating
    profit before
    financing costs         202.7         239.7           961.0          250.3
    Finance costs          (33.0)        (44.4)         (125.5)         (20.8)
    Finance income          123.6          88.7           386.1           93.3
    Monetary gain            22.9          24.0            95.3           29.6
    Share of profit
    of equity
    accounted
    investees                27.5          23.7           121.7           38.3
    Income before
    taxes and
    minority
    interest                343.7         331.7         1,438.6          390.7
    Income tax
    expense                (58.7)        (76.6)         (291.5)         (76.7)
    Income before
    minority
    interest                285.0         255.1         1,147.1          314.0
    Non-controlling
    interests                 2.6           1.8            11.7            2.5
    Net income              287.6         256.9         1,158.8          316.5

    Net income per
    share                    0.13          0.12            0.53           0.14

    Other Financial
    Data

    Gross margin            37.4%         37.3%           38.2%          37.2%
    EBITDA(*)               393.1         474.8         1,808.4          452.1
    Capital
    expenditures            142.7         401.0           975.5          110.3

    Consolidated
    Balance Sheet
    Data (at period
    end)
    Cash and cash
    equivalents           3,411.1       3,926.2         3,926.2        3,655.0
    Total assets          9,677.4      10,483.2        10,483.2       10,428.8
    Long term debt          434.2         619.2           619.2          774.9
    Total debt            1,894.8       1,705.2         1,705.2        1,666.7
    Total
    liabilities           3,289.5       3,323.1         3,323.1        3,084.3
    Total equity          6,387.9       7,160.1         7,160.1        7,344.5

    * Please refer to the notes on reconciliation of Non-GAAP Financial
    measures on page 12
    ** For further details, please refer to our consolidated
    financial statements and notes as at 31 March 2013 on our web site.

For further information please contact Turkcell


CorporateAffairs:

KorayOzturkler,Chief Corporate AffairsOfficer
Tel:+90-212-313-1500
Email:koray.ozturkler@turkcell.com.tr

Investors:

Nihat Narin, Director
Investor and International
Media Relations
Tel: + 90-212-313-1244
Email:nihat.narin@turkcell.com.tr
investor.relations@turkcell.com.tr

Media:

Filiz Karagul Tuzun, Director
Corporate Communications
Tel: + 90-212-313-2304
Email:filiz.karagul@turkcell.com.tr
Turkcell-Kurumsal-Iletisim@turkcell.com

SOURCE Turkcell
 
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