Turkcell Iletisim Hizmetleri Third Quarter 2012 Results "Consistent Growth With Sequential Margin Improvement"

ISTANBUL, October 18, 2012 /PRNewswire/ --

  • Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S., (the "Company", or "Turkcell") and its subsidiaries and associates (together referred to as the "Group"). All non-financial data is unconsolidated and comprises Turkcell only figures. The terms "we", "us", and "our" in this press release refer only to the Company, except in discussions of financial data, where such terms refer to the Group, and where context otherwise requires.
  • In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for September 30, 2012 refer to the same item as at September 30, 2011. For further details, please refer to our consolidated financial statements and notes as at and for September 30, 2012 which can be accessed via our web site in the investor relations section (http://www.turkcell.com.tr).
  • Please note that the Information and Communication Technologies Authority in Turkey is referred to as "the Telecommunications Authority" herein.

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HIGLIGHTS OF THE THIRD QUARTER OF 2012

  • Turkcell Group sustained its consistent growth trend in the third quarter of 2012, registering high single-digit revenue growth and achieving sequential improvement in EBITDA margin

  • Group revenues rose by 9% to TRY2,753 million (TRY2,527 million) posting all-time highest quarter revenue

  • Group EBITDA[1] also reached TRY912 million (TRY871 million) on a 5% year-on-year increase, while the Group EBITDA margin was at 33.1% (34.5%)

  • Turkcell Turkey registered revenues of TRY2,300 million (TRY2,174 million) achieving 6% growth

  • Turkcell Turkey grew voice revenues[2] by 4%, sustaining the growth trend for the fourth consecutive quarter  

  • Mobile broadband & services revenues rose by 12% to TRY591 million (TRY528 million)

  • Mobile broadband revenues reached TRY276 million (TRY207 million) on a rise of 34%

  • Mobile broadband and service revenues constituted 26% (24%) of Turkcell Turkey revenues

  • Revenues of subsidiaries[3] showed a 28% increase to TRY453 million (TRY353 million), while their contribution to the top line rose 2pp to 16% (14%)

  • EBITDA of subsidiaries[3] improved by 8% to TRY128 million (TRY118 million), while their contribution to Group EBITDA stayed flat at 14% (14%)

  • Group net income increased by 6% to TRY571 million (TRY537 million), mainly driven by strong operational performance, despite one time negative impact of TRY72 million due to impairment recognized for A-Tel.*

(1) EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation of EBITDA to net cash from operating activities.

(2) Voice revenues include outgoing, incoming, roaming and other (comprising almost 2% of Turkcell Turkey) revenues.

(3) Including eliminations.  

(*) For details, please refer to our consolidated financial statements and notes as at and for Sep 30, 2012 which can be accessed via our web site.

COMMENTS FROM CEO, SUREYYA CILIV

"In the third quarter of 2012, Turkcell Group revenue increased by 9% year on year to TRY2.8 billion, while we recorded EBITDA of TRY912 million and net profit of TRY571 million.

As Turkcell, we remained the operator of choice with our focus on innovation and customer satisfaction. In the third quarter of the year, we increased our subscriber base to 35.2 million with 442 thousand net additions in the Turkish mobile market. As a result, Turkcell Turkey's revenues rose by 6% compared to last year, while voice revenues grew by 4% and mobile broadband revenues increased by 34%.

Our vision is to widen mobile broadband access in Turkey. Accordingly, we increased the number of smartphones in our network to 5.5 million via affordable "Turkcell Maxi series" smartphones and our "Smartphone Festival" campaign. Additionally, we continued to combine the advantages of mobile communication technologies with sectoral solutions. Most recently, we launched "Turkcell Wallet", which combines commerce and payment systems on a single platform.

In addition to the successful performance of Turkcell Turkey, Group companies continued to increase their contribution. Turkcell Superonline, providing fiber broadband in Turkey, grew by 51% year on year, while our Ukrainian operation increased its revenues by 7% in US Dollar terms.

We have raised our full year 2012 expectations for Group revenue and EBITDA. We now expect revenue in the range of TRY 10.3-10.4 billion and EBITDA in the range of TRY 3.1-3.2 billion for 2012. Meanwhile, our guidance for the capex over sales ratio is unchanged at 16%.

We would like to thank all of our customers, employees, business partners and shareholders, who constitute the Turkcell family, and who are always beside us, for their continued support."


OVERVIEW OF TURKCELL TURKEY

During the quarter, based on our estimates mobile line penetration slightly rose to around 90%, and is expected to be similar for the year-end.

In the quarter, the market focus remained on postpaid, as well as increasing smartphone penetration, where we continued to differentiate ourselves from the competition with our superior solutions for customer needs. In the meantime, we have observed some increases in the communication of the service quality and coverage in the market, besides price focused communication.

However, the competitive pressure on pricing remains in place through high incentives, including all direction tariffs. This continued to result in higher off-net traffic and thus higher interconnect costs, which in turn pressured profitability in the market.

As Turkcell Turkey, our ongoing focus on value propositions, together with segmented offers, resulted in expansion of our subscriber base. Accordingly, we recorded the highest quarterly net additions of 442K since the launch of MNP, with a significant decline in the churn rate for the quarter to 6.9%. With further improvement in the postpaid share in our total subscriber base, plus growth in mobile broadband revenues, led to a 4.3% rise in ARPU to TRY22.0.

On the terminal front, the smartphone market has continued to grow. As Turkcell Turkey, in pursuit of higher smartphone penetration, we have been promoting our own T-Series smartphones, with the launch of Turkcell MaxiPLUS5 and MaxiPRO5. Moreover, our recent "Smartphone Festival" campaign enabled us to offer our customers affordable prices with the most preferred smartphone brands. These combined efforts boosted the smartphone number in our network by 0.7 million to 5.5 million, lifting penetration up to 17%.

For the best customer experience, we have always prioritized investment in our network capabilities and cutting edge technology. Accordingly, we continued to provide cross-industry solutions during the quarter with a focus on cloud computing, M2M and mobile finance. Most recently, in partnership with MasterCard, we launched "Mobile Wallet" solution, which provides innovative solutions on a single commerce and payment platform, including mobile banking, mobile payment and mobile loyalty programs.

As Turkcell Group, we performed better in the third quarter. This was mainly due to higher revenues from voice, mobile broadband and Turkcell Superonline. On the EBITDA side, higher revenues along with reduced selling and marketing expenses resulted in an improvement. And year to date, our revenues have grown by 11% and our EBITDA by 8%. In consequence, we now expect revenue in the range of TRY 10.3-10.4 billion and EBITDA in the range of TRY 3.1-3.2 billion for 2012. Meanwhile, our guidance for the capex over sales ratio is unchanged at 16%.


FINANCIAL AND OPERATIONAL REVIEW OF THE THIRD QUARTER 2012

The following discussion focuses principally on the developments and trends in our business in the third quarter of 2012 in TRY terms. Selected financial information for the third quarter of 2011, and the second and third quarters of 2012, both in TRY and US$ prepared in accordance with IFRS, and in TRY prepared in accordance with the Capital Markets Board of Turkey's standards are also included at the end of this press release.

Financial Review of Turkcell Group

    Profit & Loss Statement (million TRY)   Q311      Q212      Q312     y/y %    q/q %

    Total Revenue                          2,527.0   2,565.1   2,752.8     8.9%    7.3%
    Direct cost of revenues[1]            (1,477.0) (1,572.3) (1,663.6)   12.6%    5.8%
    Depreciation and amortization           (337.4)   (343.1)   (340.0)    0.8%   (0.9%)
    Gross Margin                              41.6%     38.7%     39.6%   (2.0pp)  0.9pp
    Administrative expenses                  (94.8)   (122.6)   (117.6)   24.1%   (4.1%)
    Selling and marketing expenses          (421.3)   (434.3)   (399.6)   (5.2%)  (8.0%)
    EBITDA[2]                                871.3     779.0     912.0     4.7%   17.1%
    EBITDA Margin                             34.5%     30.4%     33.1%   (1.4pp)  2.7pp
    Net finance income / (expense)            81.2     105.0     121.3    49.4%   15.5%
    Finance expense                          (61.0)    (44.5)    (41.9)  (31.3%)  (5.8%)
    Finance income                           142.2     149.5     163.2    14.8%    9.2%
    Share of profit of associates             59.5      65.6      60.9     2.4%   (7.2%)
    Other income / (expense)                  14.9       3.9     (78.7)      -       -
    Monetary gains / (losses)                    -      39.3      47.5       -    20.9%
    Non-controlling interests                 10.0       7.4       5.7   (43.0%) (23.0%)
    Income tax expense                      (162.3)   (122.9)   (157.9)   (2.7%)  28.5%
    Net Income                               537.2     534.2     570.8     6.3%    6.9%


(1) Including depreciation and amortization expenses.

(2) EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation of EBITDA to net cash from operating activities.

Revenue increased 9% year-on-year to TRY2,752.8 million (TRY2,527.0 million) due to 6% growth in Turkcell Turkey's revenues and 28% rise in the contribution of subsidiaries:

  • Turkcell Turkey's revenues climbed 6% on the back of 34% growth in mobile broadband revenues to TRY276.2 million (TRY206.7 million), together with a 4% rise in voice revenues.

  • Subsidiaries' contribution to the top line rose to 16% (14%). In particular, Turkcell Superonline's revenues grew by 50.7% to TRY186.7 million (TRY123.9 million), while Astelit's revenues increased 6.5% to US$111.0 million (US$104.2 million).

On a quarter-on-quarter basis, revenues grew by 7%, mainly due to the 7% increase in the voice revenues and 15% growth in mobile broadband revenues of Turkcell Turkey, together with 9% growth in the contribution of subsidiaries.

Direct cost of revenues climbed 12.6% to TRY1,663.6 million (TRY1,477.0 million), while as a percentage of revenues increasing to 60.4% (58.4%). This was mainly driven by the increase in interconnection costs (2.3pp), wages & salaries (0.9pp) and network related expenses (0.2pp) as opposed to the decreases in depreciation and amortization (1.0pp) and other cost items (0.4pp).

Compared to the previous quarter, direct costs as a percentage of revenues dropped 0.9pp to 60.4% (61.3%). This mainly stemmed from the decrease in depreciation and amortization (1.0pp), network related costs (0.2pp) and other cost items (0.5pp) as opposed to the increase in interconnection costs (0.8pp).

In Q312, Turkcell Turkey's interconnection costs rose to TRY308.4 million (TRY229.0 million) YoY increasing its interconnection costs as a percentage of revenue by 2.9pp to 13.4% (10.5%). In the meantime, Turkcell Turkey's interconnection revenues rose 43.3% to TRY308.3 million (TRY215.2 million), driven mostly by higher incentives in the market, including all direction minutes.  This led to an increased share of interconnection revenues in Turkcell Turkey's revenues to 13.4% (9.9%).

Administrative expenses as a percentage of revenues increased 0.5pp to 4.3% (3.8%) in Q312, mainly due to higher bad debt expenses (0.8pp) as a percentage of revenues mainly due to higher postpaid subscriber base and increased handset bundled offers. Please also note that in Q311 bad debt expenses were positively impacted by improved collections during the quarter. Compared to the previous quarter, administrative expenses as a percentage of revenues decreased 0.5pp to 4.3% from 4.8%, mainly driven by the decrease in legal follow up expenses (0.2pp) and other cost items (0.5pp) as opposed to the increase bad debt expenses (0.2pp).

Selling and marketing expenses as a percentage of revenues fell by 2.2pp to 14.5% (16.7%) in Q312 mainly driven by the decrease in selling expenses (1.7pp) mostly due to lower acquisitions and one-off decline in distributor related expenses due to A-Tel, together with lower prepaid frequency usage fees (0.3pp) and other items (0.2pp). On a quarter-on-quarter basis, selling and marketing expenses as a percentage of revenues dropped 2.4pp to 14.5%, which stemmed from the decrease in selling expenses (1.7pp), marketing expenses (0.6pp) and other cost items (0.1pp).

EBITDA increased 4.7% to TRY912.0 million in Q312 from TRY871.3 million in Q311, while the EBITDA margin was at 33.1% (34.5%). This mainly arose from the increase in direct cost of revenues (excluding depreciation and amortization) of 3.1pp and administrative expenses of 0.5pp as opposed to the decrease in selling and marketing expenses of 2.2pp as a percentage of revenues.

The EBITDA margin improved by 2.7pp from 30.4% to 33.1% QoQ due to the decline in selling and marketing expenses of 2.4pp and general administrative expenses of 0.5pp as opposed to the increase in direct cost of revenues (excluding depreciation and amortization) of 0.2pp.

The contribution of subsidiaries to Group EBITDA of subsidiaries improved by 8% to TRY128 million (TRY118 million) with the improved EBITDA margins of Turkcell Superonline and Astelit. Please also note that in the third quarter we have reached breakeven EBITDA in our Belarusian operations.

Net finance income increased 49.4% to TRY121.3 million in Q312 compared to TRY81.2 million in Q311. This was driven by a higher interest income of TRY133 million earned on time deposits in Q312 (TRY117 million) and lower translation loss of TRY18 million (TRY24 million) in Q312. Compared to the previous quarter, net finance income increased 15.5% to TRY121.3 million, which was driven by higher interest income earned on bank deposits.

Share of profit of equity accounted investees, comprising our share in the net income of unconsolidated investees Fintur and A-Tel increased 2.4% to TRY60.9 million (TRY59.5 million). Compared to the previous quarter, our share in the net income of unconsolidated investees decreased 7.2% to TRY60.9 million (TRY65.6 million).

Income tax expense amounted to TRY157.9 million in Q312 (TRY162.3 million). The taxation charge rose by 28.5% compared to Q212. TRY134.8 million of the total tax charge comprised current tax charges, while deferred tax expense of TRY23.1 million was recorded.

    Million TRY                  Q311    Q212    Q312    y/y %  q/q %

    Current Tax expense         (211.6) (138.1) (134.8) (36.3%) (2.4%)
    Deferred Tax Income/expense   49.3    15.2   (23.1)     -      -
    Income Tax expense          (162.3) (122.9) (157.9)  (2.7%) 28.5%


Net income increased 6.3% to TRY570.8 million (TRY537.2 million) in Q312, which was achieved through higher EBITDA of TRY912.0 million (TRY871.3 million), higher net finance income of TRY121.3 million (TRY81.2 million), as well as a monetary gain of TRY47.5 million in Q312 (the net effects of inflation adjustments on the non-monetary items in balance sheet and income statement of BeST were recorded as monetary gains/ losses). Please note that there is one time negative impact of TRY72 million on net income due to impairment recognized for A-Tel.*

Quarter-on-quarter, net income increased by 6.9% to TR570.8 million (TRY534.2 million), mainly driven by rise in EBITDA by 17.1%, 15.5% higher net finance income and 20.9% higher monetary gain.

Total debt as of Sep 30, 2012 in consolidated terms was TRY3,127 million (US$1,752 million).

    Total debt (million)                      TRY      US$ equivalent

    Ukraine                                    574            321
    Belarus                                    795            445
    Superonline                                641            359
    Turkcell Turkey and other
    subsidiaries                             1,117            627
    Total debt                               3,127          1,752


In Euroasia (which owns 100% of Turkcell's Ukraine operations, Astelit), total outstanding debt was at US$666 million, which included its guaranteed loan amounting to US$150 million that Turkcell Turkey paid in Q212. TRY2,090 million (US$1,171 million) of our consolidated debt is at a floating rate, while TRY2,018 million (US$1,131 million) will mature within less than a year. Our debt/annual EBITDA ratio in TRY terms decreased to 101% in Q312. (Please note that the figures in parentheses refer to US$ equivalents).

Cash flow analysis: Capital expenditures amounted to TRY445.6 million in Q312, of which TRY221.0 million was related to Turkcell Turkey, TRY53.3 million to Astelit, TRY119.4 million to Turkcell Superonline and TRY17.0 million to BeST. Year to date capex amounted to TRY1,025 million (TRY920 million in 9M11). In addition, the other cash flow item mainly includes the corporate tax payment of TRY100 million.

    Consolidated Cash Flow (million TRY)   Q311     Q212     Q312

    EBITDA[1]                             871.3    779.0    912.0
    LESS:
    Capex and License**                  (401.5)  (326.9)  (445.6)
    Turkcell                             (238.5)  (166.5)  (221.0)
    Ukraine[2]                            (39.9)   (15.4)   (53.3)
    Investment & Marketable Securities        -     10.3     (7.0)
    Net interest Income/ (expense)        104.7    122.4    139.0
    Other                                 133.5   (307.0)  (159.1)
    Net Change in Debt                      9.1   (284.0)    30.2
    Cash generated / (used)               717.1     (6.2)   469.5
    Cash balance                        6,162.9  6,041.3  6,510.8


(1) EBITDA is a non-GAAP financial measurement. See page 12 for the reconciliation of EBITDA to net cash from operating activities.

(2) The appreciation of reporting currency (TRY) against US$ is included in this line.

(*) For details, please refer to consolidated financial statements and notes as at and for Sep 30, 2012 which can be accessed via our web site

(**) Capex includes both operational and non-operational capex.

Operational Review in Turkey

    Summary of Operational data             Q311  Q212  Q312   y/y %   q/q %

    Number of total subscribers (million)   34.4  34.7  35.2    2.3%    1.4%
    Postpaid                                11.0  12.6  12.9   17.3%    2.4%
    Prepaid                                 23.4  22.2  22.3   (4.7%)   0.5%
    ARPU, blended (TRY)                     21.1  20.7  22.0    4.3%    6.3%
    Postpaid                                40.4  37.7  38.4   (5.0%)   1.9%
    Prepaid                                 12.2  11.3  12.6    3.3%   11.5%
    ARPU (Average Monthly Revenue per
    User), blended (US$)                    12.3  11.5  12.2   (0.8%)   6.1%
    Postpaid                                23.5  21.0  21.3   (9.4%)   1.4%
    Prepaid                                  7.1   6.3   7.0   (1.4%)  11.1%
    Churn (%)                                8.0%  8.2%  6.9%  (1.1pp) (1.3pp)
    MOU (Average Monthly Minutes of usage
    per subscriber), blended               222.3 250.4 257.1   15.7%    2.7%


Subscribers of Turkcell Turkey increased by 442K to 35.2 million during the quarter. We further expanded our postpaid subscriber base in Q312 by 340K subscribers. This was achieved through customer loyalty focus, segmented offers and switches from prepaid. As a consequence, the postpaid subscriber share in the total subscriber base has further improved to 36.6% (32.0%). In the meantime, we achieved increasing our prepaid customer base by 102K, mainly through our focus on decreasing involuntary churn and packaging efforts that meet customer needs, segmented offers and additional benefits.

Churn Rate refers to voluntarily and involuntarily disconnected subscribers. During the quarter, our churn rate reached its lowest level of 6.9% (8.0%) since the launch of MNP (excluding the impact of the change in prepaid churn periods in the second quarter of 2011), which we achieved through a greater focus on customer retention and satisfaction, promoting the contracts and appropriate offers that meet customer needs.

MoU rose to 257.1 minutes with an increase of 15.7% year-on-year. Higher all direction minute offers and higher package utilizations led to healthy increase in MOU.

ARPU in TRY terms climbed 4.3% to a record level of TRY22.0 on a year-on-year basis, with the rise in the share of postpaid subscribers to 36.6% (32.0%) and 34% growth in mobile broadband revenues. Despite the rise in voice and mobile broadband & services revenues, postpaid ARPU fell by 5.0% to TRY38.4 (TRY40.4) as a result of continued competition as well as the dilutive impact of switches from the prepaid segment. Meanwhile, prepaid ARPU increased to TRY12.6 (TRY12.2) in Q312, mainly due to greater incoming and mobile broadband revenues.

OTHER DOMESTIC AND INTERNATIONAL OPERATIONS

Astelit maintained its solid operational performance in Q312, demonstrating high single-digit revenue growth of 6.5% to US$111.0 million (US$104.2 million) together with 18.3% growth in EBITDA to US$31.7 million (US$26.8 million). Top line growth mainly resulted from the expansion in the subscriber base, coupled with seasonally higher revenues from international calls and tourist packages.

During the third quarter, Astelit recorded 751K net additions, increasing its 3-month active subscriber base to 8.2 million as a result of its regional growth strategy and the seasonality impact. MoU declined by 6.1% to 184.4 min (196.4 min), mainly due to lower usage of new subscribers.

In the third quarter, Astelit sustained its operational success, increasing its EBITDA margin by 2.8pp to 28.6% (25.8%) while registering positive EBIT for the second consecutive quarter, despite aggressive price based competition.

    Astelit                                Q311   Q212   Q312   y/y %   q/q %

    Number of subscribers (million)[1]     9.3    10.1   10.7   15.1%    5.9%
    Active (3 months)[2]                   7.1     7.4    8.2   15.5%   10.8%
    MOU (minutes)                        196.4   192.8  184.4   (6.1%)  (4.4%)
    ARPU (Average Monthly Revenue per
    User), blended (US$)                   3.9     3.4    3.5  (10.3%)   2.9%
    Active (3 months)                      5.1     4.6    4.7   (7.8%)   2.2%
    Revenue (million UAH)                830.5   799.5  887.0    6.8%   10.9%
    Revenue (million US$)                104.2   100.1  111.0    6.5%   10.9%
    EBITDA (million US$)[3]               26.8    30.3   31.7   18.3%    4.6%
    EBITDA margin                         25.8%   30.3%  28.6%   2.8pp  (1.7pp)
    Net loss (million US$)               (15.2)  (10.6) (11.3) (25.7%)   6.6%
    Capex (million US$)                   19.4     8.4   30.0   54.6%  257.1%


(1) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn.

(2) Active subscribers are those who in the past three months made a transaction which brought revenue to the Company.

(3) EBITDA is a non-GAAP financial measurement. See page 12 for the reconciliation of Euroasia's EBITDA to net cash from operating activities. Euroasia holds a 100% stake in Astelit.

(*) Astelit, in which we hold a 55% stake through Euroasia, has operated in Ukraine since February 2005.

Turkcell Superonline continued its strong operational performance in the third quarter, delivering 50.7% YoY revenue growth to TRY186.7 million (TRY123.9 million), while recording its historically highest quarterly EBITDA margin of 22.3% (17.7%).

In the quarter, the residential segment grew by 96% on the back of 70% YoY growth in the subscriber base. With continued fiber investments, we increased our home passes to 1.2 million, reaching 374K FTTX subscribers. Meanwhile, the corporate segment posted 61% YoY growth, mainly driven by increasing synergies and enriched integrated solutions at the Group level. Overall, the share of residential and corporate segments rose to 54% of total revenues (46%), whereby the share of non-group revenues in total revenues reached 71% (60%).

Meanwhile, nominal EBITDA grew by 90% YoY, registering positive EBIT for the fifth consecutive quarter. This was enabled by the rising weight of the more profitable data business.

    Turkcell Superonline (million TRY)  Q311   Q212   Q312  y/y % q/q %

    Revenue                            123.9  162.2  186.7  50.7% 15.1%
    EBITDA [1]                          21.9   32.6   41.6  90.0% 27.6%
    EBITDA Margin                       17.7%  20.1%  22.3%  4.6pp 2.2pp
    Capex                               86.4  109.0  119.4  38.2%  9.5%


(1)EBITDA is a non-GAAP financial measure. See page 12 for the reconciliation of EBITDA to net cash from operating activities.

(*)Turkcell Superonline is our wholly-owned subsidiary, providing fiber broadband.

Fintur continued to improve its market position in Q312, adding approximately 1.3 million net subscribers, thereby increasing its total subscriber base to 20.4 million, mainly driven by 1.0 million subscriber growth in Kazakhstan. Fintur's consolidated revenue was at US$514 million in Q312 (US$514 million).

We account for our investment in Fintur using the equity method. Fintur's contribution to net income remained almost stable at TRY76 million (US$42 million) in Q312 compared to TRY74 million (US$43 million) in Q311.

    Fintur                            Q311   Q212    Q312   y/y %  q/q %

    Subscribers (million)             17.3   19.1    20.4   17.9%   6.8%
    Kazakhstan                        10.1   11.7    12.7   25.7%   8.5%
    Azerbaijan                         4.1    4.3     4.4    7.3%   2.3%
    Moldova                            0.9    1.1     1.2   33.3%   9.1%
    Georgia                            2.1    2.0     2.1      -    5.0%
    Revenue (million US$)              514    505     514      -    1.8%
    Kazakhstan                         326    299     310   (4.9%)  3.7%
    Azerbaijan                         136    149     141    3.7%  (5.4%)
    Moldova                             22     20      21   (4.5%)  5.0%
    Georgia                             38     37      42   10.5%  13.5%
    Other[1]                            (8)     -       -      -      -
    Fintur's contribution to Group's
    net income (million US$)            43     43      42   (2.3%) (2.3%)


(1) Includes intersegment eliminations


(*)   We hold a 41.45% stake In Fintur which has interests in Kazakhstan, Azerbaijan, Moldova, and Georgia.

Turkcell Group Subscribers amounted to approximately 68.1 million as of September 30, 2012. This figure is calculated by considering the number of subscribers in Turkcell and each of our subsidiaries and unconsolidated investees. It includes the total number of mobile subscribers in Turkcell Turkey, Astelit, BeST, KKTCell ("Northern Cyprus"), Turkcell Europe and Fintur. Turkcell Group subscribers rose by 2.3 million during the quarter, thanks to the increased subscriber base of Fintur, Astelit and Turkcell Turkey. This was despite the 0.2 million decline in BeST's subscriber base during the quarter due to involuntary churn, in line with BeST's churn policy and value focus approach.

    Turkcell Group Subscribers (million)  Q311   Q212   Q312   y/y %   q/q %

    Turkcell Turkey                       34.4   34.7   35.2    2.3%    1.4%
    Ukraine                                9.3   10.1   10.7   15.1%    5.9%
    Fintur                                17.3   19.1   20.4   17.9%    6.8%
    Northern Cyprus                        0.4    0.4    0.4      -       -
    Belarus                                1.7    1.2    1.0  (41.2%) (16.7%)
    Turkcell Europe                        0.2    0.3    0.4  100.0%   33.3%
    TURKCELL GROUP                        63.3   65.8   68.1    7.6%    3.5%


OVERVIEW OF THE MACROECONOMIC ENVIRONMENT

The foreign exchange rates that have been used in our financial reporting, along with certain macroeconomic indicators, are set out below.

                               Q311   Q212   Q312  y/y %  q/q %
    TRY / US$ rate
    Closing Rate             1.8453 1.8065 1.7847  (3.3%) (1.2%)
    Average Rate             1.7188 1.7913 1.8012   4.8%   0.6%
    Consumer Price Index       1.2%   0.4%   1.4%   0.2pp  1.0pp
    GDP Growth                 8.4%   2.9%   n.a      -      -
    UAH/ US$ rate
    Closing Rate               7.97   7.99   7.99   0.3%     -
    Average Rate               7.97   7.99   7.99   0.3%     -
    BYR/ US$ rate
    Closing Rate              5,599  8,320  8,500  51.8%   2.2%
    Average Rate              5,112  8,190  8,357  63.5%   2.0%


RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe that EBITDA is a measurement commonly used by companies, analysts and investors in the telecommunications industry that enhances the understanding of our cash generation ability and liquidity position, and assists in the evaluation of our capacity to meet our financial obligations. We also use EBITDA as an internal measurement tool, and accordingly, we believe that its presentation provides useful and relevant information to analysts and investors.  Our EBITDA definition includes Revenue, Direct Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses and Administrative expenses, but excludes translation gain/(loss), finance income, share of profit of equity accounted investees, gain on sale of investments, income/(loss) from related parties, minority interest and other income/(expense). EBITDA is not a measure of financial performance under IFRS, and should not be construed as a substitute for net earnings (loss) as a measure of performance, or cash flow from operations as a measure of liquidity. The following table provides a reconciliation of EBITDA, which is a non-GAAP financial measurement, to net cash from operating activities, which we believe is the most directly comparable financial measurement calculated and presented in accordance with IFRS.

    Turkcell Group (million US$)           Q311    Q212    Q312   y/y %  q/q %

    EBITDA                                507.6   434.3   506.2   (0.3%)  16.6%
    Income tax expense                    (94.7)  (68.5)  (87.7)  (7.4%)  28.0%
    Other operating income / (expense)      6.3     1.6    (4.2)     -       -
    Financial income                        2.5     0.4     3.4   36.0%  750.0%
    Financial expense                     (16.3)  (24.2)  (23.8)  46.0%   (1.7%)
    Net increase / (decrease) in assets
    and liabilities                         4.3  (111.3)   16.0  272.1%      -
    Net cash from operating activities    409.8   232.3   409.9      -    76.5%


    Turkcell Superonline (million TRY)     Q311   Q212   Q312   y/y %  q/q %

    EBITDA                                 21.9    32.6   41.6   90.0%  27.6%
    Other operating income / (expense)      0.3     0.9    1.2  300.0%  33.3%
    Financial income                        1.2   (31.5)   2.2   83.3%     -
    Financial expense                     (16.0)   28.8  (15.8)  (1.3%)    -
    Net increase / (decrease) in assets
    and liabilities                        (2.2)  (30.7)  29.0      -      -
    Net cash from operating activities      5.3     0.1   58.2      -      -


    Euroasia (million US$)                 Q311   Q212    Q312   y/y %  q/q %

    EBITDA                                 26.8    30.3   31.7  18.3%   4.6%
    Other operating income / (expense)     (0.2)   (0.1)    -      -      -
    Financial income                        0.1     0.3    0.8 700.0% 166.7%
    Financial expense                     (12.5)  (13.4) (14.7) 17.6%   9.7%
    Net increase / (decrease) in assets
    and liabilities                        11.8     1.7   16.6  40.7% 876.5%
    Net cash from operating activities     26.0    18.8   34.4  32.3%  83.0%


FORWARD-LOOKING STATEMENTS:  This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding our operations, financial position and business strategy may constitute forward-looking statements.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe" or "continue."

Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct.  All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2011 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

ABOUT TURKCELL: Turkcell is the leading communications and technology company in Turkey, with 35.2 million subscribers as of September 30, 2012. Turkcell is a leading regional player, with market leadership in five of the nine countries in which it operates with its approximately 68.1 million subscribers as of September 30, 2012. It has become one of the first among the global operators to have implemented HSPA+. It has achieved up to 43.2 Mbps speed using the Dual Carrier technology, and is continuously working to provide the latest technology to its customers, e.g. 84 Mbps in the near future. As of September 30, 2012, Turkcell population coverage is at 99.17% in 2G and 83.14% in 3G.  Turkcell reported a TRY2.8 billion (US$1.5 billion) net revenue with total assets of TRY18.0 billion (US$10.1 billion) as of September 30, 2012. It has been listed on the NYSE and the ISE since July 2000, and is the only NYSE-listed company in Turkey. Read more at  http://www.turkcell.com.tr

                                     TURKCELL ILETISIM HIZMETLERI A.S.
                                   CMB SELECTED FINANCIALS (TRY Million)

                                                                    Nine          Nine
                     Quarter Ended Quarter Ended Quarter Ended  Months Ended  Months Ended
                     September 30,   June 30,    September 30,  September 30, September 30,
                         2011          2012          2012            2011         2012
 
    Consolidated 
    Statement of 
    Operations Data
    Revenues
    Communication fees     2,372.6   2,366.5       2,544.8       6,471.9           7,092.2
    Commission fees 
    on betting business       17.8      32.2          28.7          55.0              96.1
    Monthly fixed fees        26.0      22.7          21.8          79.8              69.0
    Simcard sales             11.5       9.1          11.3          27.1              26.5
    Call center revenues 
    and other revenues        99.1     134.6         146.2         290.8             415.9
    Total revenues         2,527.0   2,565.1       2,752.8       6,924.6           7,699.7
    Direct cost of 
    revenues              (1,476.6) (1,570.3)     (1,662.5)     (4,158.3)         (4,722.6)
    Gross profit           1,050.4     994.8       1,090.3       2,766.3           2,977.1
    Administrative 
    expenses                 (94.8)   (122.6)       (117.6)       (307.1)           (358.3)
    Selling & marketing 
    expenses                (421.3)   (434.3)       (399.6)     (1,233.3)         (1,236.7)
    Other Operating 
    Income / (Expense)        14.9       3.8         (79.0)       (206.9)            (81.7)
 
    Operating profit 
    before financing costs   549.2     441.7         494.1       1,019.0           1,300.4
    Finance costs            (61.0)    (44.5)        (41.9)       (416.5)           (144.7)
    Finance income           142.1     149.5         163.2         405.9             532.8
    Monetary gain                -      39.3          47.5             -             127.3
    Share of profit of 
    equity accounted 
    investees                 59.6      65.6          60.9         172.1             176.0
    Income before taxes 
    and minority interest    689.9     651.6         723.8       1,180.5           1,991.8
    Income tax expense      (162.4)   (123.2)       (158.0)       (368.0)           (386.8)
    Income before 
    minority interest        527.5     528.4         565.8         812.5           1,605.0
    Non-controlling 
    interests                 10.0       7.4           5.7          37.5              17.8
    Net income               537.5     535.8         571.5         850.0           1,622.8
 
    Net income per share      0.24      0.24          0.26          0.39              0.74
 
    Other Financial Data
 
    Gross margin              41.6%     38.8%         39.6%         39.9%             38.7%
    EBITDA(*)                871.3     779.0         912.0       2,218.2           2,393.7
    Capital expenditures     401.5     326.9         445.6         919.6           1,025.4
 
    Consolidated Balance 
    Sheet Data (at period end)
    Cash and cash 
    equivalents            6,162.9   6,041.3       6,510.8       6,162.9           6,510.8
    Total assets          16,604.8  17,329.8      17,996.1      16,604.8          17,996.1
    Long term debt         2,231.9     696.0       1,109.6       2,231.9           1,109.6
    Total debt             3,450.5   3,128.6       3,127.4       3,450.5           3,127.4
    Total liabilities      6,113.9   5,546.6       5,657.8       6,113.9           5,657.8
    Total shareholders' 
    equity / Net Assets   10,491.0  11,783.1      12,338.3      10,491.0          12,338.3
 
    ** For further details, please refer to our consolidated financial statements 
    and notes as at 30 September 2012 on our web site.


                                   TURKCELL ILETISIM HIZMETLERI A.S.
                               IFRS SELECTED FINANCIALS (TRY Million)

                                                                   Nine           Nine
                     Quarter Ended Quarter Ended Quarter Ended  Months Ended  Months Ended
                     September 30,   June 30,    September 30,  September 30, September 30,
                         2011          2012          2012            2011         2012

 
    Consolidated 
    Statement of 
    Operations Data
    Revenues
    Communication fees    2,372.6    2,366.5       2,544.8       6,471.9           7,092.2
    Commission fees on 
    betting business         17.8       32.2          28.7          55.0              96.1
    Monthly fixed fees       26.0       22.7          21.8          79.8              69.0
    Simcard sales            11.5        9.1          11.3          27.1              26.5
    Call center revenues 
    and other revenues       99.1      134.6         146.2         290.8             415.9
    Total revenues        2,527.0    2,565.1       2,752.8       6,924.6           7,699.7
    Direct cost of 
    revenues             (1,477.0)  (1,572.3)     (1,663.6)     (4,162.5)         (4,727.2)
    Gross profit          1,050.0      992.8       1,089.2       2,762.1           2,972.5
    Administrative 
    expenses                (94.8)    (122.6)       (117.6)       (307.1)           (358.3)
    Selling & marketing 
    expenses               (421.3)    (434.3)       (399.6)     (1,233.3)         (1,236.7)
    Other Operating 
    Income / (Expense)       14.9        3.9         (78.7)       (208.1)           (81.30)
 
    Operating profit 
    before financing costs  548.8      439.8         493.3       1,013.6           1,296.2
    Finance costs           (61.0)     (44.5)        (41.9)       (416.5)           (144.7)
    Finance income          142.2      149.5         163.2         406.0             532.8
    Monetary gain               -       39.3          47.5             -             127.3
    Share of profit of 
    equity accounted 
    investees                59.5       65.6          60.9         172.1             176.0
    Income before taxes 
    and minority interest   689.5      649.7         723.0       1,175.2           1,987.6
    Income tax expense     (162.3)    (122.9)       (157.9)       (366.7)           (385.6)
    Income before 
    minority interest       527.2      526.8         565.1         808.5           1,602.0
    Non-controlling 
    interests                10.0        7.4           5.7          37.5              17.8
    Net income              537.2      534.2         570.8         846.0           1,619.8
 
    Net income per share     0.24       0.24          0.26          0.38              0.74
 
    Other Financial Data
 
    Gross margin             41.6%      38.7%         39.6%         39.9%             38.6%
    EBITDA(*)               871.3      779.0         912.0       2,218.2           2,393.7
    Capital expenditures    401.5      326.9         445.6         919.6           1,025.4
 
    Consolidated Balance 
    Sheet Data 
    (at period end)
    Cash and cash 
    equivalents           6,162.9    6,041.3       6,510.8       6,162.9           6,510.8
    Total assets         16,645.9   17,365.9      18,031.5      16,645.9          18,031.5
    Long term debt        2,231.9      696.0       1,109.6       2,231.9           1,109.6
    Total debt            3,450.5    3,128.6       3,127.4       3,450.5           3,127.4
    Total liabilities     6,120.5    5,552.3       5,663.3       6,120.5           5,663.3
    Total shareholders' 
    equity / Net Assets  10,525.4   11,813.6      12,368.2      10,525.4          12,368.2
 
    ** For further details, please refer to our consolidated financial statements and 
    notes as at 30 September 2012 on our web site.


                                       TURKCELL ILETISIM HIZMETLERI A.S.
                                     IFRS SELECTED FINANCIALS (US$ MILLION)

                                                                   Nine           Nine
                     Quarter Ended Quarter Ended Quarter Ended  Months Ended  Months Ended
                     September 30,   June 30,    September 30,  September 30, September 30,
                         2011          2012          2012            2011         2012
 
    Consolidated 
    Statement of 
    Operations Data
    Revenues
    Communication fees    1,382.4    1,320.4       1,413.1       3,993.8           3,954.4
    Commission fees on 
    betting business         10.3       18.0          16.0          34.1              53.7
    Monthly fixed fees       15.2       12.7          12.1          49.4              38.5
    Simcard sales             6.7        5.1           6.2          16.7              14.7
    Call center revenues 
    and other revenues       57.6       75.0          81.4         179.7             232.0
    Total revenues        1,472.2    1,431.2       1,528.8       4,273.7           4,293.3
    Direct cost of 
    revenues               (858.8)    (876.9)       (924.3)     (2,568.1)         (2,636.2)
    Gross profit            613.4      554.3         604.5       1,705.6           1,657.1
    Administrative 
    expenses                (55.1)     (68.4)        (65.4)       (190.4)           (200.0)
    Selling & marketing 
    expenses               (245.8)    (242.7)       (221.9)       (763.9)           (690.4)
    Other Operating 
    Income / (Expense)        7.0        2.0        (43.8)        (133.5)            (45.4)
 
    Operating profit 
    before financing costs  319.5      245.2         273.4         617.8             721.3
    Finance costs           (34.0)     (24.5)        (23.6)       (261.1)            (81.1)
    Finance income           82.0       83.2          90.6         248.1             297.4
    Monetary gain               -       21.3          27.1             -              71.3
    Share of profit of 
    equity accounted 
    investees                35.0       36.6          33.9         106.6              98.0
    Income before taxes 
    and minority interest   402.5      361.8         401.4         711.4           1,106.9
    Income tax expense      (94.7)     (68.5)        (87.7)       (225.1)           (214.9)
    Income before 
    minority interest       307.8      293.3         313.7         486.3             892.0
    Non-controlling 
    interests                 5.8        4.1           3.2          23.4               9.9
    Net income              313.6      297.4         316.9         509.7             901.9
 
    Net income per share     0.14       0.14          0.14          0.23              0.41
 
    Other Financial Data
 
    Gross margin             41.7%      38.7%         39.5%         39.9%             38.6%
    EBITDA(*)               507.6      434.3         506.2       1,364.6           1,333.6
    Capital expenditures    180.5      178.3         253.5         498.3             574.5
 
    Consolidated Balance 
    Sheet Data 
    (at period end)
    Cash and cash 
    equivalents           3,339.8    3,344.2       3,648.1       3,339.8           3,648.1
    Total assets          9,020.7    9,613.0      10,103.4       9,020.7          10,103.4
    Long term debt        1,209.5      385.3         621.8       1,209.5             621.8
    Total debt            1,869.9    1,731.9       1,752.3       1,869.9           1,752.3
    Total liabilities     3,316.8    3,073.5       3,173.3       3,316.8           3,173.3
    Total equity          5,703.9    6,539.5       6,930.1       5,703.9           6,930.1
 
    * Please refer to the notes on reconciliation of Non-GAAP Financial measures
    on page 12
    ** For further details, please refer to our consolidated financial statements
    and notes as at 30 September 2012 on our web site.


For further information please contact Turkcell

Corporate Affairs:                                                   
Koray Ozturkler,                                       
Chief Corporate                                                            
Affairs Officer                                                
Tel: +90-212-313-1500                                  
Email: koray.ozturkler@turkcell.com.tr                                                                              

Investors:    
Nihat Narin,
Investor and International
Media Relations                                                
Tel: +90-212-313-1244
Email: nihat.narin@turkcell.com.tr
investor.relations@turkcell.com.tr

Media:
Filiz Karagul Tuzun
Corporate
Communications
Tel: +90-212-313-2304
Email: filiz.karagul@turkcell.com.tr
Turkcell-kurumsal-iletisim@turkcell.com.tr


SOURCE Turkcell




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