TCELL TI: 4Q22 Review (Oyak Yatırım)

Net profit surpassed expectations thanks to deferred tax income
Turkcell posted TL6bn net profit for 4Q22, up by 333% y/y and 150% q/q, 228% above the consensus of TL1.8bn. Tax income of TL4.1bn from fixed asset revaluation caused a positive impact on bottom-line. EBITDA came in at TL6.7bn (+57% y/y, +10% q/q), slighlty better than the market expectation of TL6.3bn. Top-line grew by 57% y/y and 9% q/q, in line with consensus, with the acceleration in ARPU and strong subscriber net add performance of Turkcell Turkey, as well as the contribution of techfin business. Turkcell International maintained its y/y growth with 41% in 4Q22.

Subscriber growth continued q/q almost in every segment
While the Turkcell Group subscribers increased by 5% y/y and 0.4% q/q to 54mn, Turkcell Turkey followed a similar trend and reached 41.7mn. We see 8% y/y increase in postpaid mobile subscribers (25.7mn users) due to higher data usage and upselling. Fiber users also showed a 12% y/y increase to 2.1mn users. IPTV recorded subscriber gains with 18% y/y and Superbox grew by 11% y/y. Share of digital channel revenue, maintained at 25% of total revenue, kept its strong trend. Mobile churn rate became 2.7% in 4Q22. (4Q21:2.5%).

ARPU growth accelerated slightly, however y/y growth rates could still not match inflation
Postpaid ARPU grew by 49% y/y while prepaid ARPU grew by 67% y/y. Mobile blended ARPU increased by 53% y/y. Weakest growth was recorded in residential fiber ARPU with 33% y/y. Average mobile data usage per user reached 15.7 GB with an 18% y/y increase.

Balance sheet outlook was preserved
Net debt increased to TL23.1bn in 4Q22 from TL22.7bn in 3Q22, maintaining the low-risk outlook at 1.0x of its last-12-month EBITDA.

2023 guidance was released
Turkcell announced its 2023 guidance upwards on the back of acceleration in performance. Accordingly, the company targets a revenue growth of 55-57% (2022: 50%) and EBITDA of c.TL34bn (2022: TL22bn). Also, Operational CapEx to sales ratio guidance was c.22% (2022: 20%).
It also shared the effects of last month's earthquake, which affected around 16% of the total population. It was stated that 1 tower and approximately 150 base stations were destroyed in the disaster. February 6, 2023 earthquake is estimated to have a negative revenue impact of TL1.5bn for 2023, while approximately TL900mn of renewal investments are planned for mobile and fixed network investments.

We changed our rating to “Outperform” and revised our target price to 46.14TL/share
In line with the company’s guidance, we raised our EBITDA and net income forecasts for 2023E to TL33.8bn and TL10.1bn from TL27bn and TL8.1bn, respectively. Thus, our new target price settled to TL46.14/share (previous: TL41.20). The share trades at 2.9x EV/EBITDA and 7.3x P/E multiples based on our updated estimates.


Oyak Yatırım Menkul Değerler A.Ş.
                                   ***
                               Yasal Uyarı
 
 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.