Turkcell Iletisim Hizmetleri AS Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Cesar Tiron - BofA Global Research - Analyst : I have two, if that's okay. Just wanted to understand better what will drive a reacceleration of the top line growth in the second part of the year? And then second, do you have an update on what you intend to do with the proceeds from the Ukrainian asset sale?

Question: Ece Mandaci Baysal - Unlu Securities, Inc. - Analyst : Can I ask more about your revenue growth prospects for the rest of the year. For first half, we are seeing a 5% revenue growth and a 5% ARPU growth. So after your price adjustments in July, should we expect a better real ARPU growth performance on the mobile side? Or should it stay around 5% or single digit maybe? And you have mentioned, within your potential guidance to be that the macro assumptions had effect, but also we are seeing a decline in your corporate revenues. Could that be also reason why you will review your revenue guidance for the rest of the year? So could that be a downside REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 5:00PM, TCELL.IS - Q2 2024 Turkcell Iletisim Hizmetleri AS Earnings Call risk compared to your low double-digit real revenue growth estimate? By the way, when even I look at your revenue growth of only 5%, there is a significant 10% growth as of first half in your EBITDA number. So could it be due to do better cost management and sustainable ARPU growth, real ARPU growth? And will this be sustainable also this EBITDA growth?

Question: Ece Mandaci Baysal - Unlu Securities, Inc. - Analyst : Could you also please talk about the growth trend in your subscriber base as well, July and August?

Question: Pradyumna Mishra - HSBC Holdings plc - Analyst : I have a first question, actually on the revenue growth still. I mean, it is slightly confusing to me that you are having regular price increases. So year-on-year basis, your prices in second quarter should have been higher than last year, which is also reflected in your ARPU growth. But overall,

Question: Pradyumna Mishra - HSBC Holdings plc - Analyst : Okay. And just going back on the pricing part. I understand that you raised prices in July. Before that, I mean when was the previous price hike done? And how frequently do you actually undertake the price hikes?

Question: Pradyumna Mishra - HSBC Holdings plc - Analyst : That makes sense. And if you could just inform which is the operator being most aggressive right now?

Question: Unidentified Participant - - Analyst : Hello, can you hear me?

Question: Unidentified Participant - - Analyst : My question is if the Eurobond that you already mentioned on this call, I think the issuance window for Turkish corporates in the dollar market have been wide open throughout the year. So I was trying to understand what's keeping you from coming to market thus far? And what are the parameters that you're looking at? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 5:00PM, TCELL.IS - Q2 2024 Turkcell Iletisim Hizmetleri AS Earnings Call

Question: Pradyumna Mishra - HSBC Holdings plc - Analyst : Okay. Well, I hope the issuance window stay open while you consider all of these aspects. Can you walk me a bit more through your 5G spending plans, both in terms of auctions and regular CapEx associated with the rollout? Let's say, for example, calling what kind of ballpark CapEx to sales are we talking about for 2025 and 2026?

Question: Pradyumna Mishra - HSBC Holdings plc - Analyst : Okay. And remind me of one thing, you still own all the towers? Or would you have to pay for the lease amendments and upgrades to external tower operators? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 5:00PM, TCELL.IS - Q2 2024 Turkcell Iletisim Hizmetleri AS Earnings Call

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Just very briefly on my side. Would you mind providing a quick review on your mobile contract structure in terms of like tenor, CPI adjustments that you may make? How is the situation looking as of this moment? That would be my first question.

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Okay. So my understanding is the 25% adjustment is a bit below the inflation rate during the year. Is that correct?

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Okay. I see. So they're 12 months in tenor and then maybe like semiannually, you could make like a tariff adjustment. You have that option.

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Understood, 12 months for the postpaid. Great. That is very clear. I appreciate it. And then secondly, the base case is for you to refinance the Eurobond. Would that be correct?

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Refinance Eurobond in 2025.

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Yes. If that's your base case coming back to the market.

Question: Gustavo Campos - Jefferies Financial Group, Inc. - Analyst : Okay. Great. And last question for me. Where do you see net leverage going? Because you might increase some of your investments in 5G, as you mentioned. Would that make some pressure in your capital structure? Or is that not something that will budge your credit profile?

Question: Vistra Venia - Barclays PLC - Analyst : I just have one quick question regarding 5G. Do you already understand how it's going to be rolled out in terms of do you target to first roll it out for corporate clients? Or it will be immediately rolled to retail clients as well?

Question: Vistra Venia - Barclays PLC - Analyst : Okay. And also one quick follow-up on the cash position. You mentioned it's TRY1.5 billion, that does not include Ukraine process, right?