Turkcell Iletisim Hizmetleri As ((TKC)) has held its Q4 earnings call. Read on for the main highlights of the call.
Turkcell’s recent earnings call painted a picture of robust financial health and strategic progress, with notable achievements in postpaid additions and sustainable finance initiatives. Despite facing challenges such as increased churn and fierce market competition, the overall sentiment was positive, underscoring the company’s strong performance and strategic direction.
Record-Breaking Postpaid Additions
Turkcell reported a remarkable achievement with 1.9 million net postpaid additions, marking the highest increase in the past 15 years. This surge has elevated the postpaid share to 76%, demonstrating Turkcell’s successful strategy in expanding its postpaid customer base.
Strong Financial Performance
The company showcased a solid financial performance, with its full-year top line reaching TRY 16.7 billion, a 7.8% increase year-on-year. Additionally, EBITDA rose by 10.2% to TRY 70 billion, with the EBITDA margin expanding by 0.9 percentage points, reflecting efficient operational management.
Successful Ukraine Asset Sale
A significant milestone for Turkcell was the completion of its Ukraine asset sale in Q3, which contributed to a 30% increase in net income, surpassing TRY 23.5 billion. This strategic move has strengthened Turkcell’s financial position.
Techfin Segment Growth
Turkcell’s techfin segment, particularly through its mobile payment platform Paycell, experienced substantial growth. Paycell saw a 33% increase in Q4, while Paylater transaction volumes surged by 87%, and Financell revenue grew by 13.6%, highlighting the segment’s expanding influence.
Sustainable Finance and Renewable Energy Efforts
Turkcell’s commitment to sustainability was evident with the issuance of a $1 billion euro bond, half of which was a sustainable bond issue. The company also expanded its renewable energy capacity by adding 8.2 megawatts of active solar capacity.
Increased Churn Rate
The earnings call highlighted a rise in the churn rate to 2.8%, attributed to intensified market competition and lifecycle closures, resulting in a quarterly net loss of 0.9 million in the prepaid segment.
Intense Market Competition
Turkcell faced a highly competitive mobile market, with aggressive pricing dynamics impacting its pricing strategies and contributing to increased churn. This competitive landscape remains a challenge for the company.
Challenges in Prepaid Segment
The prepaid segment experienced a quarterly net loss, driven by the adoption of alternative data solutions and migrations to postpaid plans. This shift underscores the challenges in retaining prepaid customers.
Forward-Looking Guidance
Looking ahead, Turkcell provided guidance for 2025, projecting a 7% to 9% top-line revenue growth. The company anticipates data center and cloud revenue growth between 32% and 34%, with an EBITDA margin of 41% to 42%. Strategic priorities include 5G investments, fiber network expansion, and renewable energy projects, all while maintaining a strong balance sheet and leveraging diverse revenue streams.
In summary, Turkcell’s earnings call conveyed a generally positive sentiment, with strong financial results and strategic achievements. Despite challenges like increased churn and market competition, the company’s forward-looking guidance and strategic initiatives position it well for future growth.