Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) Q2 2023 Earnings Conference Call August 17, 2023 12:00 PM ET

Company Participants

Ali Serdar Yağcı - Investor Relations & Corporate Finance Director

Murat Erkan - Chief Executive Officer

Kamil Kalyon - Acting Chief Financial Officer

Conference Call Participants

Ece Mandaci - Unlu & Co.

Cemal Demirtas - Ata Invest Co.

Kayahan Demirak - AK Investment

Operator

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome and thank you for joining the Turkcell's Conference Call and Live Webcast to present and discuss Turkcell's Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Ali Serdar Yağcı, Investor Relations and Corporate Finance Director. Mr. Yağcı, you may now proceed.

Ali Serdar Yağcı

Thank you, Konstantinos. Hi, everyone. Welcome to Turkcell's second quarter 2023 results call. Today our CEO, Mr. Murat Erkan; and Acting CFO, Mr. Kamil Kalyon, will be delivering a brief presentation covering operational and financial results which will be followed by a Q&A. Before we kick off, I would like to kindly remind you to read our safe harbor statement placed at the end of the presentation.

Now I'm handing over to Mr. Erkan.

Murat Erkan

Thank you, Serdar. Hello, everyone. Thank you for joining us. We delivered outstanding result in the second quarter. Our determined inflationary pricing strategy plays an instrumental role in delivering an ever accelerating performance. Outpacing the inflation, our revenue growth ramped up to 74% on a record ARPU growth and expanding subscriber base. Strategic focus area also supported top-line growth as always. On the profitability side, our EBITDA almost doubled reaching TRY 9.5 billion, driven mostly by strong top-line growth and reduced energy prices in Q2. We achieved a remarkable 44% EBITDA margin. This strong operational performance coupled with dynamic and prudent risk management, enabled a solid net profit of TRY 3.2 billion on a 70% year-on-year rise. Considering this result, we further increased our full year guidance.

Next slide. Let's take a closer look at our mobile operational performance. Our focus on postpaid subscriber yielded a substantial gain of 404,000 subscriber in Q2, capping a 70% postpaid share of the mobile base. Following the gloomy Q1, we resumed price adjustment in April. And as the competitors followed us, overall price level escalated in the market. However, temporary competitive offers were observed in the market, triggering an increasing MNP volume. Rising acquisition price level and alternative data solution for tourists impacted prepaid subscribers. The inflation figure for July indicates a surge in inflation during the second half of the year. Yet we are committed to price adjustments. Accordingly, we raised our prices in August.