· Turkcell recorded TL2,396mn net income in 3Q22, 9.6% higher than our est. of TL2,187mn and 44.0% above consensus est. of TL1,664mn. Higher than expected EBITDA (+TL49mn), higher than expected income from investments net of fin. expenses (+TL114mn) & lower than expected taxes (+TL46mn) were the reasons behind stronger than expected net income.
· Revenues were 1.1% above our estimates and EBITDA of TL5,990mn was 0.8% above our estimates. The company guidance for 2022 is revised up: (1) topline growth to 47-48%” from “>40%” and (2) EBITDA to c.TL21bn from c.TL20bn which are in line with our estimates.
Topline growth of 56.7% was 1.1ppt above our estimates. Turkcell Turkey revenues, constituting 75.5% of Group revenues, increased by 57.1%, y/y, mainly supported by 60.9% growth in corporate and 106.8% growth in wholesale revenues. Turkcell international revenues, comprising 11.1% of Group revenues, increased by 78.6%, y/y, mainly driven by revenue growth in Ukrainian operations and the positive impact of TL depreciation. Total tech fin. revenues, constituting 3.4% of Group revenues, increased by 77.3% y/y. Financell revenues and Paycell revenues increased by 56.7% and 105.4%, respectively, in 3Q22. Other subsidiaries’ revenues, at 9.9% of Group revenues, increased by 31.2% y/y, due to mild recovery in equipment revenues. Including fixed broadband and IPTV, Turkcell Turkey net subscribers increased by c.928K in 3Q22. Turkcell Turkey added 422K post-paid and 506K pre-paid subscriber in 3Q22. Mobile ARPU growth of 46.5% y/y was positively impacted by price adjustments to reflect inflationary impacts & upsell efforts & a growing customer base
Consolidated EBITDA was up 48.6% y/y to TL6.00bn, 0.8% higher than our estimate. Turkcell Turkey EBITDA increased by 43.5% y/y to TL4.76bn in 3Q22, implying 43.0% EBITDA margin whereas Turkcell International EBITDA was up by 87.6% y/y to TL846mn in 3Q22, implying 51.8% EBITDA margin. The EBITDA of tech fin segment was up by 32.2% y/y TL230mn in 3Q22 where other subsidiaries EBITDA increased by 76.1% y/y to TL155mn during the same period.
Net debt fell by TL1.28bn q/q to TL20.3bn in 3Q22, implying 1.0x Net Debt/EBITDA. Excluding Turkcell Consumer Finance Company’s (TCF) consumer loans, its net debt was down by 8.7% q/q to TL17.40bn in 3Q22, implying 1.0x Net Debt/EBITDA. Including advance payments, hedging and excluding FX swap transactions for TL borrowing, Turkcell’s net FX short position fell to US$19mn in 3Q22 from US$149mn in 2Q22.