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Turkcell's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: TKC

While improving our top line, we manage to sustain a profitable business model in nominal terms. Our EBITDA rose year-on-year to TRY779 million, with an EBITDA margin of around 30.4%. Yet, prevailing intense competition continued to impact the margin levels of all players in the Turkish market. Strong operational performance, plus the absence of the one-off Belarus related items we recorded in the second quarter of last year, the increased Group net income to TRY534 million.

Moving on to page five to talk about the driving force of this growth. Page five. In the second quarter of 2012, Turkcell Turkey grew by 9% year-on-year, with an increasing pace over the past three quarters. This was driven by accelerated growth in voice revenues by 6%, despite intensified competition in the Turkish mobile market. Meanwhile, the mobile broadband business fell about 44% year-on-year revenue growth. The operational performance of our subsidiaries were strong. Their contribution to the top line grew at 37%, mostly driven by Turkcell Superonline and Astelit.

Overall, we are proud of the fact that Turkcell Group posted its third consecutive quarter of double digit growth with increasing momentum.

Let's have a broader look at the margin of the market in Turkey on page six. During the second quarter of 2012, competitors pursuit of market share remained unchanged, in light of increase of net incentives, and a further decline in average prices, which continued to pressure market profitability. Minutes of usage rose by 15% year-on-year to this record peak for the Turkish market of 297 minutes, while revenue per minute fell to 7.5 Turkish Kurus, 8% down on 2011, mainly due to aggressive porting offers with higher off-net incentives.

As highlighted earlier this year, we have been committed to defending our customer base for future growth. Our strategy is to sharpen customer focus and drive innovation and operational excellence. We strive to deliver superior customer experience.

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