Turkey’s largest telco Turk Telekom (TTKOM) will on June 1 distribute Turkish lira (TRY) 0.34 gross and TRY0.29 net dividends per share, amounting to TRY1.2bn in total from its 2019 profit.

The proposed dividend amount is equivalent to a 4% dividend yield.

The dividend payout ratio of 50% from Turk Telekom’s profit last year is lower than the average distribution ratio of 93.8% provided between 2007-2015, Seker Invest noted.

Turk Telekom has not distributed dividends for three years. It posted losses in 2016 and 2018 due to lira depreciation and its huge short FX position.

The company decided to reduce its leverage rather than distribute dividends from its 2017 profit.

Although below the average of the company’s past dividend pay-out ratios, the decision is line with Turk Telekom’s dividend policy, according to Seker.

Swung to profit

Turk Telekom swung to a TRY2.41bn in net profit for 2019 from a net loss of TRY1.39bn in 2018, thanks to the relatively stable lira. Financial expenses declined to TRY3.53bn last year from TRY6.45bn a year ago due to sizeable FX and hedging gains, but they still compared as high against previous years.

Revenues rose by 16% y/y to TRY23.7bn in 2019. The company is targeting 14% y/y in revenue growth and TRY12.4bn in EBITDA in 2020.

Turk Telekom is the main exposure of Borsa Istanbul’s most popular lenders Garanti BBVA (GARAN) and Akbank (AKBNK).

In 2018, the two banks, together with fellow local lender Isbank (ISBNK), took over a 55% stake in Turk Telekom after the former owner of the stake, Otas—a unit of Dubai-based Oger Telecom—failed to keep up payments on a $4.75bn loan; the situation produced the largest default in Turkish history and the biggest M&A deal in 2018.

The lenders are aiming to sell their Turk Telekom stake, but they have not yet found a buyer. The main difficulty is the risk that Turk Telekom’s licence won’t be extended by the government beyond 2026, meaning the purchaser would lack time to recoup their investment through dividend payouts.

Turk Telekom is the leading integrated telco in Turkey. It operates the country's largest fixed network and the smallest of its three mobile networks.

BIM paying out 4%

On March 4, Borsa Istanbul’s top retailer BIM (BIMAS) announced a 4% dividend per share to be paid in two instalments on May 13 and October 14, according to Seker Invest’s calculations.

BIM’s net profit was down 2% y/y to TRY1.22bn in 2019 despite a 24% y/y increase in turnover to TRY40bn. BIM is targeting (+/-2%) 23% y/y turnover growth in 2020.

On March 4, glassmaking group Sisecam (SISE) (3% dividend yield) and its subsidiaries Soda Sanayi (SODA) (4%), Anadolu Cam (ANACM) (3%), Trakya Cam (TRKCM) (3%) announced dividends to be paid on May 29.

On February 26, Sabanci Holding (SAHOL) announced a 4% dividend per share to be paid on April 1. Enerjisa, a JV between E.ON and Sabanci Holding, (ENJSA), will pay 7% also on April 1.

Last month, Koc Holding subsidiaries Arcelik (ARCLK), Tofas (TOASO), Ford Otosan (FROTO) announced dividends but Tupras (TUPRS) opted not to distribute a dividend.

Banks "advised" not to distribute dividends

The banks, meanwhile, are opting not to distribute dividends from 2019. Last year, the banking watchdog BDDK “advised” local lenders not to distribute dividends from their 2018 profits. Isbank (ISCTR) tried to pay a dividend but the BDDK did not allow it to do so.

On December 17, BloombergHT reported, citing “a document seen by the publication”, that the BDDK had “advised” local lenders not distribute dividends from their 2019 profits.

TAV (TAVHL) is also among the major dividend payers so far announced.
 

Major Borsa Istanbul dividends
	Annual				Gross	Net		Gross	2010-2018
	Net	Total		Gross	Dividend	Dividend		Dividend	9 years
	Profit	Bonus	Bonus	Dividend	per	per		Yield		Yield
	TRY	TRY	share	TRY	Share	Share	Payment	Last	Paid	Average
	mn	mn	%	mn	TRY	TRY	Date	%	Years	%
Tofas	1,330			880	1.76	1.50	19-Mar	10.0	9	5.7
TAV	1,455			758	2.09	1.77	20-Mar	7.9	8	3.8
Tupras	3,713			3,794	15.15	12.88	28-Mar	12.0	8	7.0
Ford Otosan	1,683			853	2.43	2.07	1-Apr	4.2	9	5.3
Koc Holding	5,537			1,009	0.40	0.34	1-Apr	2.4	9	2.0
Sabanci	3,830			612	0.30	0.26	3-Apr	3.7	9	1.8
Erdemir	5,598			4,830	1.38	1.25	8-May	18.1	9	8.0
Sisecam	2,326			400	0.18	0.15	31-May	3.3	9	2.1
Soda	1,556			345	0.35	0.29	31-May	4.7	-	-
BIM	1,250			365	1.20	1.02	12-Jun	3.0	9	1.5
Turkcell	2,021			1,010	0.46	0.39	18-Jun	3.6	4	3.3
Aselsan	2,318			174	0.15	0.13	19-Jun	0.8	9	0.8
Petkim	872	462	28	-	-	-	19-Jun	28.0	5	3.1
BIM	1,250	304	100	274	-	-	24-Jul	100.0	9	1.5
Turkcell	2,021			1,010	0.46	0.39	31-Oct	3.6	4	3.3
BIM	1,250			365	0.60	0.51	18-Nov	3.0	9	1.5
Ford Otosan	1,683			432	1.23	1.05	21-Nov	1.9	9	5.3
Kardemir (A)	172			63	0.13	0.11	27-Nov	5.9	3	1.7
Kardemir (B)	85			31	0.13	0.11	27-Nov	5.9	3	1.7
BIM	1,250			243	0.40	0.34	11-Dec	1.7	9	1.5
Ford Otosan	1,959	-	-	1,095	3.12	2.65	23-Mar	4.0	9	5.3
Tofas	1,482			1,202	2.40	2.04	25-Mar	8.7	9	5.7
TAV	2,368	-	-	392	1.08	0.92	25-Mar	5.2	8	3.8
Enerjisa	1,034	-	-	709	0.60	0.51	1-Apr	7.1
Arcelik	925			500	0.74	0.63	1-Apr	3.9	8	3.3
Sabanci	3,780	-	-	673	0.33	0.28	1-Apr	3.6	9	1.8
Turk Telekom	2,407	-	-	1,203	0.34	0.29	1-Jun	4.2	6	3.9
BIM	1,225	-	-	1,214	1.20	1.02	13-May		9	1.5
Sisecam	1,841	-	-	320	0.14	0.12	29-May		9	2.1
Soda	1,109	-	-	245	0.25	0.21	29-May		-	-
BIM	1,225	-	-	1,214	0.80	0.68	14-Oct		9	1.5
source: Seker Invest