Bloomberg News

Turkcell’s 4Q Net Rises 38% on Sales Growth, Lagging Estimate

February 21, 2013

Turkcell Iletisim Hizmetleri AS (TCELL), Turkey’s biggest mobile phone operator, said its fourth-quarter profit rose 38 percent from a year earlier as revenue from units and mobile data services increased.

Net income rose to 459.2 million liras ($256 million), compared with 331.7 million liras a year earlier, the company said in a PR Newswire statement. Turkcell was expected to earn 477.3 million liras, according to the average of 14 analysts estimates compiled by Bloomberg.

Turkcell, owned by Teliasonera AB, Altimo of Russia and Istanbul-based Cukurova Holding AS, is seeking to boost revenue as it faces more competition in its home market from Vodafone Group Plc (VOD) and Avea Iletisim Hizmetleri AS, majority owned by Turk Telekomunikasyon AS (TTKOM), in Turkey.

Turkcell revenue rose to 2.81 billion liras in the fourth quarter from 2.45 billion liras. It had 35.1 million subscribers at the end of the fourth quarter, down from 35.2 million in the previous quarter.

Average monthly revenue per user, or ARPU, rose to $12.20 in the fourth quarter from $10.80 a year earlier.

Turkcell expects 2013 consolidated sales to be between 11.2 billion liras and 11.4 billion liras, the statement said. The operator forecast earnings before interest, tax, depreciation and amortization, or Ebitda, of between 3.3 billion liras and 3.5 billion liras for 2013 and plans investment at 15 percent of its sales for this year, according to the statement.

Dividends Blocked

TeliaSonera AB (TLSN), Altimo of Russia, which is controlled by billionaire Mikhail Fridman’s Alfa Group, and Cukurova Holding AS of Turkey have been fighting a three-cornered battle for control of the company for almost a decade. While TeliaSonera is the largest shareholder with 38 percent, Cukurova has sought to retain control via a complex ownership structure even as its stake has declined to 13.8 percent.

TeliaSonera and Altimo blocked a decision on dividend payments for 2010 and 2011, after failing to oust Chairman Colin Williams from the board, claiming he hampered Turkcell’s growth by favoring Cukurova chairman and Turkcell founder Mehmet Emin Karamehmet, Turkey’s second-richest man. Williams denied the allegations.

Cukurova Holding is in talks to raise as much as $2 billion in loans to repay debt owed to Alfa Group and recover a 13.8 percent share pledged to Alfa as collateral for a $1.7 billion loan received in 2005, two people with knowledge of the matter said Feb. 4. A London court ruled on Jan. 30 that Cukurova should be given an opportunity to repay its debt to Alfa.

“We expect the resumption of dividends in the fourth quarter of this year, especially as Cukurova will need money to refinance and service debt,” Ivan Kim, an analyst at VTB Capital, said in an e-mailed note. VTB has a ’Buy’ rating on the shares.

To contact the reporter on this story: Ercan Ersoy in Istanbul eersoy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.


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