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bne Turkey Daily ListExecutive Summary:
This is bne's Turkey daily newsletter, a list of the top stories in the country this morning. To manage your delivery options: click here: | ||
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| 1. Foreign tourists spend 723 million euros in Turkey, Brits take the lead |
| Hurriyet Daily News |
| February 23, 2012 Foreign tourists spent a total of 723 million Euros in the period from September to December 2011, according to the Visa Europe Mediterranean Countries Tourism Report. British tourists spent the most in Turkey with 103.8 million Euros, followed by Russians (69.2 million Euros), Americans (64.6 million euros), Germans (56.8 million Euros) and French (53 million Euros). The group that had the largest increase in spending in Turkey was Saudi Arabian tourists, with a 49.7 percent increase from the same four month period in 2010. Tourists from Saudi Arabia spent a total of 15.3 million Euros. Other tourist groups which witnessed large increases in spending were the Swedes at 31.1 percent, the Germans at 28.7 percent and the Russians at 25.4 percent, according to the report. Foreign tourists spent most on the entertainment sector, which witnessed a 41 percent increase from the same period in 2010. Spending on airline tickets was also up by 32.8 percent, while spending on hotels increased by 20.3 percent. Click to read more |
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| 2. Iraq wants to hike oil exports through Turkey |
| bne |
| February 23, 2012 Iraq is mulling options to boost oil exports through Turkey or to reopen disused pipelines in case Iran blocks the strategic Strait of Hormuz as threatened, the Planning Minister said yesterday, AFP reported. The vast majority of Iraq's oil is exported from terminals in the northern Gulf and passes through the Strait. Iran says it may block strategic Strait of Hormuz in response to an oil embargo. Iran has threatened retaliation for fresh Western sanctions over its nuclear program, including a possible disruption of shipping through the Strait of Hormuz, a Gulf chokepoint for global oil shipments. |
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| 3. Turkey said planning to buy 100 Lockheed Martin F-35 fighter jets |
| bne |
| February 23, 2012 Turkey plans to buy 100 of Lockheed Martin's F-35 fighter jet for $16 billion, with the first two planes for delivery in 2015, Milliyet newspaper on Thursday reported Turkish defence minister Ismet Yilmaz as saying. "Plane orders for future years will be considered separately depending on the negotiations which are being conducted," the paper reported Yilmaz as saying. |
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| 4. Kuwait's Burgan Bank denies any deal on buying Eurobank Tekfen stake |
| bne |
| February 23, 2012 Burgan Bank denied reports it had reached a deal in talks to buy a 70% stake in Turkish financial group Eurobank Tekfen, newswires reported. "Burgan Bank denies any ownership of a significant stake in a Turkish bank," the lender said in a statement to the Kuwaiti bourse on Thursday. Turkish group Eurobank Tekfen, a partnership of Greek lender EFG Eurobank and Turkish company Tekfen, said the process of selling a 70 percent stake in the bank was continuing, Milliyet newspaper reported on Thursday. "Nothing has become definite in the sale process of our bank's shares," chairman Mehmet Erten was reported as saying by the paper. "God willing, it will be concluded soon." |
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| 5. Chinese delegations sign $4.3 bln of deals in Turkey during Xi's visit |
| bne |
| February 23, 2012 China's trade and investment promotion delegations in Turkey signed $4.3 billion of trade agreements with the Turkish government and enterprises during Chinese vice-president Xi Jinping's visit to the country, sources reported, quoting the vice president, China Business Newswire said. |
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| 6. Shah Deniz Consortium Members Signal Conflicting Priorities |
| Jamestown |
| February 23, 2012 On February 20-22, one or more anonymous representatives of the Shah Deniz gas producers' consortium announced their preferred pipeline options for transporting Azerbaijani gas to Europe. Of the existing five rival options, those representatives have eliminated one pipeline project; suggested (thus, prejudging) the order of preferences for three other pipeline projects; strangely, omitted altogether the Azerbaijani-Turkish, Trans-Anatolia pipeline project; and postponed the final decision from mid-2012, until mid-2013 (while implicitly prejudging it already now) without citing an official consortium decision to that effect (Dow Jones, Trend, 1News.az, Interfax, February 20-22). The consortium's representatives announced that the Interconnector Turkey-Greece-Italy (ITGI) has been eliminated from the contest. The decision is based on the Shah Deniz consortium's eight initial criteria for selecting the pipeline solution. The representatives elegantly refrained from citing the financial situation of ITGI's two shareholders, Italian Edison and Greek state-owned DEPA. The producers' consortium will henceforth conduct exclusive negotiations with the Trans-Adriatic Pipeline (TAP), led by Norway's Statoil, for possible transportation of Azerbaijani gas via the western Balkans to Italy. For transporting gas to Central Europe, the Shah Deniz consortium will choose between British Petroleum's concept of a South-East Europe Pipeline (SEEP, from Turkey to Hungary, with further connections) and an abridged version of the Nabucco pipeline project (from Bulgaria to Vienna). The same unnamed representatives expressed a preference for SEEP. One of these two will be selected, whereupon the producers' consortium would decide whether to export Azerbaijani gas to southern Europe or to central Europe. Italy's Economic Development Ministry and the Greek Energy Ministry have issued statements challenging the elimination of ITGI from the contest, arguing for this project's superiority over its rivals, and pledging continuing support for ITGI. In its own statement, ITGI regards its elimination as "merely a temporary decision" (Trend, February 21). These unusual responses seem to imply that those unnamed representatives did not necessarily or conclusively speak for the Shah Deniz consortium. Apart from the issue of procedure, however, ITGI's elimination seems all too real, and ultimately a footnote in the selection process. This project never corresponded with the strategic imperative of reducing Russian Gazprom's market share through diversification of supplies to central European countries. In this and other respects, however, TAP is almost a mirror image of ITGI. TAP proposes (as did ITGI) to carry 10 billion cubic meters (bcm) of Azerbaijani gas annually - i.e., the entire volume available for export to Europe from Shah Deniz Phase Two of production. This would deprive the EU-backed Nabucco or the Trans-Anatolia project of a resource base; and deprive central Europe of its diversification opportunity, redirecting the gas to southern Europe (mainly Italy) instead. The Italian market and the small Greek market are already saturated and well-diversified. TAP and, lately, ITGI claim that their respective capacities can be increased to 20 bcm annually each. This can hardly be taken seriously, given their lack of access to further gas sources (Caspian or from northern Iraq). If taken seriously, nevertheless, diverting 20 bcm annually to southern Europe, instead of central Europe, would be even more anti-strategic and a still greater favor to Gazprom than doing so with 10 bcm (see below). Like ITGI, so would TAP use Turkey's pipelines and build a new pipeline for part of the way in Greece. TAP would reach Italy via Greece, Albania and the Adriatic seabed; while ITGI would reach Italy directly from Greece on the seabed of the Ionian Sea. By their own estimates, ITGI and TAP would each cost some 2 billion Euros ($2.64 billion) to execute - far cheaper, compared with the Nabucco or Trans-Anatolia projects. To achieve these cost-savings, however, TAP would (like ITGI) use Turkey's pipelines, which have very limited spare capacity (a fact that casts further doubt on TAP's or ITGI's potential capacity increase to 20 bcm annually each). Greece had objected to TAP all along, on two counts: as a rival to ITGI (in which the Greek state is a shareholder through DEPA) and because TAP proposes to reach the Adriatic via Albania, which Greece opposes. Consequently, TAP could not be certain of obtaining construction and transit rights in Greece. Now that ITGI has been eliminated, however, at least some Greek officials would consider merging ITGI with TAP or otherwise cooperating with TAP on Greek territory (Athens News Agency via RIA Novosti, February 20). TAP's shareholders are Norway's Statoil with 42.5 percent, Swiss EGL (Elektrizitaets-Gesellschaft Laufenburg) with another 42.5 percent, and E.ON Ruhrgas of Germany with 15 percent. According to TAP's CEO, Kjetil Tungland (a Statoil executive), "TAP is a strong claimant to victory in the tender for transporting [Azerbaijani] gas from Shah Deniz to Europe. We are confident that TAP is proposing to the Shah Deniz consortium the most attractive route to Italy" (Trend, February 20). This would imply (see above) diverting the available volume of Azerbaijani gas to the saturated and diversified Italian and other southern European markets, away from central Europe which needs both the added volumes and the diversification. Gazprom would be pleased with such an outcome. Its flaws notwithstanding, TAP plays a strong hand through Statoil, which is the commercial operator in the Shah Deniz consortium. The Nabucco project (Turkey, Bulgaria, Romania, Hungary, Austria, and the German RWE), backed by the European Commission until very recently, had lost credibility all around in the form proposed. The tipping point of credibility loss (in that form) can be traced to November-December 2011. As predicted, however (see EDM, January 31), Nabucco remains viable and necessary in an abridged form, to carry Azerbaijani gas into central Europe, as a European continuation pipeline to the Azerbaijani-Turkish, Trans-Anatolia pipeline project. In recent days, the Nabucco consortium has submitted a proposal along these lines to the Shah Deniz gas producers' consortium. Dubbed "Nabucco-West," the pipeline would run from the Turkish-Bulgarian border to Vienna, for a capacity half as large as the originally designed 31 bcm per year. This size, however, would lack spare capacity for future volumes of Turkmen gas, for which the European Commission seeks an outlet to Europe. --Vladimir Socor |
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| 7. Turkey starts nuclear talks with China |
| Hurriyet Daily News |
| February 23, 2012 Turkey and China will soon start talks for building the third nuclear power plant in the northwestern region of the country, said Turkey's vice deputy prime minister in Istanbul yesterday at a meeting with the vice president of China, noting that Turkey's doors were wide open for Chinese banks. "We will start the talks with Chinese authorities and officials regarding nuclear energy," said Ali Babacan responding to the questions of journalists after the Turkish-Chinese Business Forum attended by Chinese Vice President Xi Jinping. Noting that Turkey has a target of having a total of three nuclear power plants by 2023, "The talks would focus on building the country's third plant" in •neada, a small town in the northern province of Krklareli, said the minister. Click to read more |
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| 8. Turkey set to launch negotiations with India for free trade pact |
| bne |
| February 23, 2012 Turkey is expected to soon start negotiations for a free trade agreement (FTA) with India to increase economic engagement between the two, Asia in Focus reported. The bilateral trade was US$3.5 billion in 2010-11. According to industry experts, sectors like tourism, pharmaceutical, petro-chemicals and minerals in Turkey hold huge potential for Indian companies. |
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| 9. Start-ups in Estonia - Crouching Baltic Tiger or Paper Dragon? |
| bne |
| February 23, 2012 Estonia's 20-year transformation from obscure soviet satellite to rising Baltic tiger has meant it's rapidly cultivating an image as Europe's start-up hub. Yet behind the big-name technology success stories lies a more complex picture. Skype, created by a team of Estonian software developers in 2003 and sold to Microsoft in 2011 for $8.5bn, is the most famous example. Another is Erply, dubbed the "Skype of business software" and acclaimed as one of the top-10 European start-ups to watch in 2012. Then there's ZeroTurnaround, which designs Java tools. Since it was founded three years ago, it has accrued an impressive customer base, which includes HP, IBM and Disney. That some of the best start-ups have bordered on the eccentric has only heightened excitement about Estonia. Fits.me, a virtual fitting room provider, is a case in point. It made headlines with its robotic mannequin for online clothes retailers, which shows browsing customers how clothes fit. Moreover, a number of Estonian companies, including Erply, Fits.me, Fortumo and GuardTime, have boosted their global profiles by opening offices in the US and UK. Impressive rankings in a host of economic reports has further bolstered Estonia's profile: World Bank figures up to 2009 suggest that Estonia has the best entrepreneurial track record in the developed world. It also ranked 16th in the 2012 Index of Economic Freedom by the Heritage Foundation, above Germany and France, and a respectable 23rd in the latest Global Innovation Index from INSEAD business school. Experts claim that the recession has been a powerful trigger for recent entrepreneurial activity, pushing Estonians out of comfortable jobs and forcing them to consider self-employment. They also point to broader factors. One is the surgical transformation of the country's economy when it gained independence in the 1990s; measures including privatisation and elimination of trade barriers have delivered Estonia two decades of steady growth and low inflation. The psychological impact of history may also be important. "Estonia is not unlike a start-up itself - the only country in the world with the singing revolution, then reinventing itself from being part of the USSR. It took the same qualities to achieve that as founding a start-up would," explains Heikki Haldre, founder of Fits.me. Less tangible theories about the impact of Estonia's Nordic culture also offer interesting food for thought. "Estonians love privacy and physical distance from each other, and, hence, have more time to tinker with wonderful ideas. The Finnish culture, similar to Estonia's, has created one of the biggest companies in the world, capitalising on the distance of people, Nokia. Skype has perhaps gained a lot from the same cultural principles," muses Haldre. Behind the headlines Yet beyond the heady narratives lies a more complex reality. Puzzlingly, a lack of entrepreneurial culture is widely seen as a serious Estonian shortcoming. A few years ago, a government survey found that 61% of Estonians had never considered owning a business. A European Commission report from 2010 also suggested that Estonians are more put off self-employment by capital issues, the prospect of failure and lacking necessary skills than other Europeans. Moreover, survival rates for start-ups are surprisingly low - only 57% of small companies are viable three years after being founded. Experts say ineffective stock management and heightened vulnerability to fluctuating economic conditions are partly responsible. The country's small work pool (the total population is just 1.3m) is also seen as a serious stumbling block. This less sanguine narrative sits awkwardly alongside Estonia's vibrant anthology of success stories. Nonetheless, this should not necessarily be seen as a contradiction. Most achievement has been limited to the information and communications technology (ICT) industry, where many of the common barriers to start-ups are less relevant: fears about lacking skills to form companies are lower in the sector because technical skills amongst Estonian workers are unusually high. "Practically anybody who is interested in learning IT can do it for free," explains Rene Joeleht, the CEO of Startup Garage, an Estonian support network for would-be entrepreneurs. The success of Skype has also helped foster strong faith in the sector and allay fears of failure. "ICT is especially popular amongst young people and many of them want to follow Skype's example," says Tonis Mets, an associate professor at the University of Tartu's Centre for Entrepreneurship. Observers suggest that one of Estonia's biggest problems may, therefore, be its inability to diversify beyond ICT. "In other fields the tables are turned; we do have engineering and design-related human capital, but lack experiences, contacts and capital," explains Joeleht of Startup Garage. Any dramatic outbreak of entrepreneurial activity outside of the technology sector may, therefore, be far off. Experts suggest that an incremental diversification of Estonia's technological portfolio is more likely. Research in the nanotechnology industry is ongoing at a centre set up in partnership with Estonian manufacturing companies. Interest in biotechnology is also growing; there are hopes the sector will move beyond its current incubation stage by 2013 to achieve an annual turnover of around €85m. As progress will require high investment in R&D and training, it could take several years for activity to increase in these sectors. Yet given Estonia's strong track record in economic strategy, and the appetite for innovation demonstrated by its entrepreneurs, it's a distinct possibility. |
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| 10. THE INSIDERS: Optimism in the time of stagnation |
| bne |
| February 23, 2012 "Putin may be gone in four years. First there will be new Duma elections, and then fresh presidential elections," predicts Sergei Guriev, rector of Moscow's New Economic School and Russia's best known liberal economist - the Niall Ferguson of Eastern Europe. "If there is no transition, then there will be stagnation." These are striking words from a man who is at the heart of the Russian reform process and an intimate of Kremlin circles. The likes of presidential candidate and playboy billionaire Mikhail Prokhorov, and Alexander Voloshin, eminence grise of the Yeltsin government and now architect of Russia's capital market reforms, are said to regularly seek him out for advice. Selected as a "Young Global Leader" by the World Economic Forum in 2006, Guriev has passed every expectation. A regular panelist at the most prestigious conferences, he also sits on a slew of the government committees currently thrashing out the details of reform. He also teamed up with investment bank Renaissance Capital to revive Russia Economic Trends, the economic touchstone in the 1990s, and wrote President Dmitry Medvedev's speech for the last St Petersburg Economic Forum. That address launched Russia's second privatisation wave. All of which makes his confidence that Russia could go through enormous political changes, and that the process will be peaceful and beneficial, extremely surprising. The "Big Mo" Guriev believes that the protests that began in December have unleashed an unstoppable force. The only issue - and it's a big one - is just how this process will play out. The first major test on the agenda is the March 4 presidential election. "[Vladimir] Putin is rumoured to be ready to make the mistake of pressing for a first-round victory," says Guriev, sitting in his modest office in the New Economic School in Moscow's southern district of Profsoyuznaya. He's voicing a widely held expectation that the current prime minister will use administrative resources to push the vote count over the 50% he needs to avoid a second round run-off. "However, he underestimates how well the fraud will be documented. Then there will be calls for new Duma elections that will let in the opposition, who will start investigations that will lead to fresh elections." The issue at hand is how seriously the elite in the Kremlin, which is Putin's most important constituency, believe they can defuse the opposition. Many of them see the Moscow demos as politically irrelevant moaning by a spoilt middle class in the capital, and are convinced that the support of "real Russians" in the regions is enough to ensure a genuine victory in the first round (with a little help from the Kremlin's electoral machine). The liberals worry dissatisfaction runs deeper, and is spread wider, than the elite is willing to admit. "The protests are too big and it is too late to stop them - they are too well organised," says Guriev. "The police won't shoot at the protestors, if it came to that, as they know they will be prosecuted by the next regime." Not that many think Russia's transformation will come down to street battles. Given the recent examples in North Africa, neither the Kremlin nor the opposition wants to see blood. "This election will be won by Putin, but the transition will happen in the next few years, and it will be more peaceful than would be expected," predicts Guriev. "The nationalist element is not playing the role we feared and [opposition leader and well known blogger Alexey] Navalny is better than we thought. He is young and inexperienced, but he has brought idealism back into politics." Just how the opposition will assert itself following the March election is moot, although the large demonstration that its leaders have called for March 5, the day after the poll, should provide a good gauge of popular sentiment. Guriev suggests one option is to hold an alternative "shadow" election, complete with campaigns, candidates and voting organised online. "This would help the opposition. Then the people would know who the opposition is and what they stand for," he says. "Say Navalny won 10m votes in this alternative election, then he could go to the Kremlin and say he has won 10m votes against Putin's 50m, but that his were won honestly, whilst Putin's were falsified - it would give him real political power." Out of touch The alternative to change is stagnation. Guriev doesn't believe Putin will carry out extensive reforms post election, as it is no longer in his interest. Rather, attacking problems like corruption would undermine his political power. Like many commentators, Guriev belies that Putin is increasingly out of touch with the population. "Putin's first term was very reformist, but then the oil prices started to rise," Guriev points out. "At first the government couldn't believe its luck, but after a few years, when it was clear the rise was here to stay, it stopped listening and started spending. Putin needs to fight corruption, but he does little, as to do so would undermine his own political base. If he really did carry out privatisation, then he would be removing one of his main levers of political power." The current PM holds practically all the cards going forward, and is banking on being able to placate the opposition by mobilising Russia's vast resources to make people's lives better. But Guriev believes the corruption issue will dog him throughout his next term in office. "In general, the announced economic policy is right on target: deregulation, removing subsidies and privatisation are all great policies. But corruption is so high that its effect swamps all the others," says Guriev. "The issue will become very important in the coming years - it will determine if Russia is undermined or saved." This is the conundrum facing Putin: he needs to fight corruption and get the state out of the economy, but doing so would undermine his power. Meanwhile, Guriev warns that he won't be able to spend his way out of trouble this time because the mood has genuinely changed. "Putin is facing difficult challenges," says Guriev. "He is dependent on the support of the people for his power, but they do not seem to be happy with him any more. He can spend more money in the regions, but in Moscow that no longer works. He thinks the people should be grateful as he made them prosperous, but the people don't see it that way. This is a new reality he has never seen before." |
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| 11. Internet third largest source of revenue, says Do_an exec |
| Hurriyet Daily News |
| February 23, 2012 The internet has become the third largest source of ad revenues in Turkey, said Do_an Holding Deputy Chairwoman Hanzade Do_an Boyner at a meeting of the Young Businessmen's Association (GY_AD), adding that internet revenues have surpassed the ad revenues of newspapers in many countries. E-commerce has reached a share of 11 percent in the total retail volume in the United States, she added. Firms now have to be entrepreneurial as the technological revolution has been pervasive, Boyner said. "Entrepreneurship is something to do with a mind-set, a spirit, a character, a culture, thinking big, not setting limits on dreams, taking risks, job loyalty. These are the concepts the firms of the new century must cling to," Boyner said at the meeting titled "Conversations with Young Bosses." Click to read more |
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| 12. Turkish Airlines, Russia's UTair join forces to offer more destinations |
| bne |
| February 23, 2012 Turkish Airlines (THY) and Russia's UTair signed a deal Wednesday that opens up more destinations for both airlines and allows their passengers to benefit from cheaper fares with a single ticket, Toda's Zaman reports. As part of the deal inked by THY CEO Temel Kotil and UTair CEO Andrey Martirosov in the central Russian city of Tyumen, THY customers will be able to purchase tickets to all of the destinations UTair flies to in Russia from THY offices. UTair passengers will have the opportunity to travel to the some 190 destinations THY services worldwide via Turkey. |
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| 13. Visitors from US and China give Turkish tourism a boost |
| bne |
| February 23, 2012 Although Germany and Russia account for by far the most visits to Turkey, visitors from the US are steadily growing in numbers, up 30 percent last year according to reports. The total number of tourists to the country was 31 million last year, Turkish government figures revealed last month, triple the 10.4 million visitors that arrived in 2001, a decade earlier. But although American visitors are showing increased interest in the country, they may soon be eclipsed by visitors from China. As the result of increasing links between the countries, which share strong historical ties thanks to their position at either end of the Silk Road, the number of Chinese visitors to Turkey surpassed 70,000 last year, up 20 percent on the year before, reports the China Daily. This year, the country is celebrating the 2012 Year of China in Turkey, with events throughout 2012 featuring literature, arts, cultural legacy, films, education, acrobatics and puppetry from China. |
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| 14. Turkey PM Erdogan Supports Intelligence Chief Fidan |
| Jamestown |
| February 23, 2012 A recent amendment to the law on National Intelligence Service (MIT) personnel, requiring the prime minister's authorization for their trial, seems to have resolved a crisis among Turkey's security and judicial apparatus for now. However, this solution also raised many more issues than it solved and the crisis highlighted some underlying tensions in Turkish politics. The crisis started when Istanbul Specially Authorized Prosecutor's Office, Sadrettin Sarikaya, summoned MIT Undersecretary, Hakan Fidan, his predecessor Emre Taner, the former deputy Undersecretary Afet Gunes and two more MIT personnel on February 7. The prosecutor was investigating the Kurdish Communities Union (KCK), alleged to be the extension of the Kurdistan Workers' Party (PKK)'s organization in metropolitan areas. Reportedly, these intelligence officers would have been questioned over some MIT personnel who infiltrated the KCK for gathering intelligence, but later allegedly implicated in its illegal activities; and the secret talks carried out with the PKK. Claiming that any investigation would require permission from the prime minister, they declined to appear before the prosecutor's office. The prosecutor's office rejected MIT's appeal, and issued orders on February 10, which called on Fidan to testify in Ankara, and also demanded that the other officers be detained. Unwilling to accept the investigation being allowed to proceed, the government discharged the prosecutor from this investigation, arguing that he had overstepped his authority. But, since this development raised the risk that these intelligence officials could be arrested, the government also initiated a legal process that would somehow grant them legal immunity. The government disregarded the objections from opposition parties and passed an amendment to the law on MIT personnel through the parliament swiftly on February 17, which states explicitly that prosecutors will have to receive authorization from the prime minister, before they could investigate the MIT officials or other public officials assigned by the prime minister to carry out specific duties. President Abdullah Gul also approved the new legislation immediately and the law went into effect (Anadolu Ajansi, February 20). As the new legislation rendered the summons orders irrelevant, they were withdrawn. However, questions remain over how the prosecutor's office will handle this issue. As there have been indications that it holds serious evidence supporting its initial decision to summon the MIT officials, it is argued that it will pursue this case. If it chooses this route, it will first need to prepare a preliminary indictment and submit it for review by the prime minister (Zaman, February 20). The opposition parties immediately condemned this development. Both the Republican People's Party (CHP) and the Nationalist Action Party (MHP) lambasted the contents of the bill, arguing that it signifies a step back from democratization because it will create areas of action for the executive authority beyond judicial review. This law, in the CHP's view, would violate the principle of the rule of law and permit the formation of gangs inside the state apparatus (Anadolu Ajansi, February 17). The MHP was equally critical, as it maintained that with these changes the government was trying to prevent its misdoings from being exposed (Anadolu Ajansi, February 21). Moreover, both parties were particularly critical of the way the amendments were legalized, and especially the president's prompt authorization, which in their view, meant that the president was acting just as a proxy of the government. The CHP plans to file a law suit with the Constitutional Court this week, demanding the annulment of the changes (Milliyet, February 21). The crisis has been a matter of intense controversy since the first day it was revealed, as it highlights many interrelated issues about the direction of Turkish politics. Some commentators viewed it as the tip of the iceberg in a conflict taking place between the governing AK Party and the supporters of the Gulen movement. Arguably, the Gulen movement supporters, using their influence in the specially authorized courts and the police force, have been positioned against the government, which has moved to consolidate its hold over the intelligence service under the leadership of Fidan (who has been brought to that post by Prime Minister Recep Tayyip Erdogan). For many, the attempt to summon Fidan was directed against Erdogan himself. This was the most hotly debated dimension of the crisis, and if this is true, it will signify major divisions within the Turkish state apparatus and perhaps additional confrontations in the days to come. Some informed analysts already maintained that the Alliance between the AK Party and Gulen movement was over (Haberturk, February 21). Moreover, this development also highlights the issue of specially authorized courts, which have largely been used so far to carry out several high-profile investigations, including those into Ergenekon and other terrorist-related charges. While government circles were content with their operations, now that these instruments reached a point of investigating the activities of the security institutions tasked with the executive authority to carry out certain tasks, including covert operations, it remains to be seen as to how far the government will allow them to go in the future. Coupled with the allegations about a rift between the government and the Gulen movement supporters, the courts' investigation into certain undertakings of security personnel will signify a major liability for Turkey, as it might lead to serious shortcomings in security institutions' performing of their duties. In any case, such special courts questioning the executive authority's political decisions might indeed create a slippery slope leading to serious interferences in civilian politics. With these amendments, the government underlined clearly that it will not let its security policies be compromised. In particular, Erdogan stood behind his trusted official Fidan, whose power has been bolstered further through a recent development that brought under his helm the military's surveillance installations as well as the task of coordinating various intelligence institutions. Erdogan also finally made a statement, following his recovery from a medical operation, and took a clear stance on the developments. He rebuffed assertions that there was any infighting or animosity between the bureaucratic institutions and maintained that he will not let appointed bureaucrats question the elected representative's political decisions (Anadolu Ajansi, February 19). Though he seems to have emerged victorious in this battle, the risk of further political fighting in Ankara is far from over. --Saban Kardas |
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| 15. Turkey MPC reveals its dovish bias |
| RBS |
| February 23, 2012 Global markets' lukewarm, even downbeat, assessment of the Greek bail-out indicates that the market is under no illusions that this is unlikely to be a game-changer for that particular economy and merely buys time /kicks cans for the rest of the periphery and for Europe to get its act together. I found it interesting to watch former Greek PM Papandreou on the BBC last night, blaming investors for not believing/trusting Greece to deliver on reform, and re-assuring that Greece will not default on its debts - a 70% hair-cut on its debts feels/smells like a default in all but name. The reality is that Greece still faces a huge, uphill struggle given that even after the proposed restructuring it will still be weighed down by a mountain of debt liabilities, albeit now the bulk of these will be "official". EM experience suggests that when an economy faces insolvency/debt sustainability concerns any restructuring has to deal with the problem at its core - and therein debt restructuring has to ensure that the end-game/state is one which is sustainable. It is difficult to argue that a target of cutting public sector debt to 121% of GDP is somehow sustainable on a long term basis - a classic EM restructuring would aim to reduce this ratio to perhaps 30-50%, if that. So ultimately this now all depends on whether Greece can generate real GDP growth - assuming the reflation option of leaving the Eurozone is not yet on the table. Generating real GDP growth, against a backdrop of continued fiscal austerity, weak regional growth, and the lack of global appetite from MNCs to invest in Europe - given its perceptions of a low growth/crisis region will be acutely difficult in practice. Greece will hence have to work extra overtime to boost competitiveness, force through structural reform and make Greece a truly outstanding place to do business. This seems very unlikely given recent experience. It is not only an uphill struggle it's a shear ascent for Greece. Important herein is acceptance of the need for reform, and blaming others, particularly investors, for Greece's problems is hardly encouraging. The above said, LTRO remains the game changer for the broader market, beyond Greece - at least in the short term for global markets and EM in particular, as this seems to have temporarily saved the European banking sector from the forced de-leveraging which was reaching dangerous distressed levels at the turn of the year. We still think that there is some short term positive momentum from continuing rounds of LTRO, with EM likely to continue to be the prime beneficiary as with previous rounds of DM QE. Inevitably this feeds into EM local markets, and FX. Turkey and the CBRT have been amongst the main beneficiaries thus far from the LTRO-fest - providing a get out of jail card for the CBRT in particular as it was fighting aggressive depreciation pressure on the lira at the turn of the year, as reflected in the loss of circa USD15bn in FX reserves defending the exchange rate. The "mood" now seems to have turned in favour of the lira, with the market now assuming that the CBRT has more time to gradually deflate domestic demand, re-balance the economy from domestic to external demand and to close the large external financing gap (~USD200bn annually). Against the above backdrop the CBRT's MPC meeting yesterday was particularly interesting, with the bank surprising the market with a 100bps cut in its lending rate, from 12.50% to 11.50%, the borrowing rate remained unchanged at 5%, and the benchmark repo rate was held at 5.75%. The CBRT also indicated that it is set to increase liquidity provided to the market via one-month repo auctions from TRY20bn to TR24bn over the next four weeks. The cut in the lending rate has been seen as having little real impact given that the CBRT is currently funding the market at an effective average rate of around 7.50-8%. That said, in terms of signalling we think the move is very significant, as previously the CBRT had indicated that it was very comfortable with the wide IR corridor and was in no rush to move to reform the system - it liked the flexibility that the existing wide IR corridor regime gave it. Given that context, and the move to boost TRY liquidity to the market, the message from the CBRT surely is that it wants to still signal its dovish bias, and is much more worried about growth, than inflation. In the accompanying press statement the CBRT still signalled that it thought the economy was indeed already rebalancing and that core inflation would begin to moderate over the next few months - we have our doubts herein. The above is clearly important given that the market is now pretty much divided into two camps, i.e. the hard landing crew (including the IMF) which argues that the economy is indeed heading for a hard landing (minus to 2% growth) and the growth bulls, including myself who thinks a) to get to the weak growth scenario there has to be either a sustained exchange rate correction and accompanying (leading or following) monetary and perhaps fiscal tightening. And the CBRT action as noted above signals to me at least that the CBRT is not interested in significantly deflating the Turkish economy - policy makers like/appreciation growth too much, over inflation. b) the Turkish economy has un underlying dynamism, reflecting a combination of political stability, demographics, housing construction, job creation, trade diversification, clean banks/balance sheets, et al. I would thus argue that the Turkish economy is still likely to surprise on the upside, with growth more likely to come out in the 4-5% range than much lower - and good enough to win any regional growth prizes. The Turkish economy does not seem/appear to be about to fall off a cliff from a growth perspective. One nuance to the CBRT's move yesterday is perhaps that it might just suggest that the CBRT is now more mindful of the over-appreciation of the lira in the short term, given LTRO is indicating a return of the QE-driven carry trade across EM. Perhaps the signal is that as the lira rallies back towards the 1.70 level against the USD, the CBRT is willing to lean against the market, easing policy rates again, and also likely using formal intervention. On the FX intervention front, remember that its starting point in 2011 was one of a relatively weak FX reserve position, and since then reserve cover has been further depleted. If the CBRT is worried about growth, and the wide current account deficit, surely it will also be much more sensitive to exchange rate weakness. Our sense/read herein is that the CBRT will intervene, selling FX to defend the lira in the 2.1-2.2 range against the basket, hold back from intervention in the 2-2.10 range, but then likely move to buy FX/dollars at or below the 2 level on a basket basis. With the lira fast approaching the bottom (strong) end of this range, our view is that the lira now has a fairly asymmetric reaction function, with much more resistance now towards appreciation. |
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| 16. Turkey plans first-ever issue of Islamic bonds this year |
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| February 23, 2012 Turkey's government plans its first-ever issue of Islamic bonds this year as part of efforts to tap Middle East investors flush with oil money, newswires reported. A sovereign sukuk issue from an economy regarded as one of the most progressive and successful in the Muslim world would signal intent on Turkey's part to play a bigger role in Islamic finance. The size of the global sukuk market is estimated at more than $100 billion, says Reuters. Deputy Prime Minister Ali Babacan, who oversees the economy, announced last month that the government planned to issue a sovereign sukuk this year, using legislation already in place. |
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| 17. Turkcell 2011 net profit falls 33% to TRY1.18bn |
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| February 23, 2012 Turkish leading mobile phone operator Turkcell said on Thursday its net profit fell 33.2% to 1.18bn lira ($670m) in 2011 due to the effects of high devaluation and hyperinflation in Belarus, where its subsidiaries operate, newswires report. Total revenues climbed 4.1% to 9.37bn lira during the year, the company's results statement showed. full press release follows: Turkcell Iletisim Hizmetleri a.s. Fourth Quarter and Full Year 2011 Results 02/22/12 17:49 PR Newswire (U.S.) Copyright 2012 PR Newswire Association LLC. All Rights Reserved. Accelerating growth in key businesses ISTANBUL, Turkey, February 22, 2012 /PRNewswire/ -- Turkcell (NYSE:TKC, ISE: TCELL), the leading communications and technology company in Turkey, today announced its results for the fourth quarter and year ended December 31, 2011. All financial results in this press release are unaudited, prepared in accordance with International Financial Reporting Standards ("IFRS") and expressed in Turkish liras and dollars unless otherwise stated 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 HIGHLIGHTS OF THE FOURTH QUARTER and FULL YEAR 2011 FULL YEAR 2011 -- Group revenue grew by 4.1% YoY to TRY9,370 million (TRY9,004 million). -- Group EBITDA[1] remained stable at TRY2,913 million (TRY2,948 million), while Group EBITDA margin was at 31.1% (32.7%). -- Turkcell Turkey recorded net subscriber additions of 1.1 million for the full year, marking the lowest annual churn rate since 2008 -- Turkcell Turkey's mobile internet and services revenues rose 20.1% to TRY1,944 million (TRY1,619 million) -- Mobile internet revenues rose 60% to TRY724 million (TRY454 million) -- The share of mobile internet and service revenues in Turkcell Turkey rose 3.9pp to 24.2% YoY (20.3%) -- The contribution of subsidiaries to the Group significantly improved in 2011 -- Revenues of subsidiaries[2] grew by 32.3% to TRY1,340 million (TRY1,012 million), while their contribution to the top line rose to 14.3% from 11.1% YoY. -- EBITDA of subsidiaries[2] improved by 49.1% to TRY399 million (TRY268 million), while their contribution to Group EBITDA rose to 13.7% (9.1%) YoY. -- Turkcell Group registered a net income of TRY1,178 million (TRY1,764 million), mainly due to one-off items mostly stemming from Belarusian operations. Excluding one-off items and currency devaluation in Belarus, Group net income would have been TRY1,913 million in 2011. FOURTH QUARTER 2011 -- Group revenue grew 11.9% YoY to TRY2,446 million (TRY2,186 million). -- Group EBITDA improved by 7.0% to TRY695 million YoY (TRY649 million), while EBITDA margin was at 28.4% (29.7%). -- Turkcell Turkey's mobile internet and services revenues rose 25.8% to TRY531 million (TRY422 million), while mobile internet revenues rose 48.9% to TRY200 million (TRY134 million). -- Subsidiaries increased contribution to Group revenues by 48.9% to TRY404 million (TRY271 million), while contribution to Group EBITDA rose to 15.4% (10.6%). -- Turkcell Group net income was at TRY332 million (TRY368 million). Excluding one-off items mainly relating to Belarusian operations and currency devaluation in Belarus, net income would have been TRY437 million in Q4 2011. (1)EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of EBITDA to net cash from operating activities. (2)Including eliminations * 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 the year end 2011 refer to the same item in the year end of 2010 and figures in parentheses following the operational and financial results for the fourth quarter 2011 refer to the same item in the fourth quarter of 2010. For further details, please refer to our consolidated financial statements and notes as at and for the year ended December 31, 2011 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. Comments from CEO, Sureyya Ciliv "In 2011, Turkcell Group revenues reached TRY 9.4 billion, while we recorded EBITDA of TRY 2.9 billion thereby delivering on our guidance. Consolidated net income of TRY 1.2 billion was recorded due to the effects of high devaluation and hyperinflation in Belarus, where our subsidiaries operate. The growth momentum that we achieved in the second quarter of the year in the fields of voice and mobile internet, and also at our subsidiaries, was accelerated in the third and fourth quarters. Turkcell continued to maintain its leader status as the company of choice by ensuring customer satisfaction and strengthening brand recognition, while the competition in contrast remained market share focused through aggressive pricing. Consequently, we were able to grow our customer base to 34.5 million with a net addition of 1.1 million subscribers. Throughout 2011, our ongoing investments in 3G and our fiber network ranked Turkey's communication and technology infrastructure foremost in the world league. Turkcell branded T series smartphones, which provide the best customer experience at affordable prices were the best-selling Android smartphone of 2011. With these differences that we bring to the market, we doubled the penetration of smartphones and saw a two and a half times jump in mobile internet usage on our network. As a result of our superior value propositions, as well as our investments, we boosted our mobile internet revenues by 60%. We are delighted by the rising performance of our Group companies and their contributions in 2011. At home, Turkcell Superonline's revenue and EBITDA rose 37% and 148% in TRY terms, respectively. Moreover, the Company recorded positive EBIT over the full year for the first time in its history. Meanwhile, on our international front, Astelit increased its revenues by 9% in USD terms, lifting its EBITDA margin to 26% from 19% a year ago. Ultimately, our subsidiaries' contribution to consolidated revenues and EBITDA rose by 32% and 49%, respectively. Following a tough, but successful year for us, I am confident that we will give pace to our growth momentum in the year 2012. I would like to thank all our customers, employees, business partners and shareholders for their continued support." OVERVIEW In 2011, the mobile market grew by 3.6 million subscribers compared to the previous year, mainly due to increased data subscriptions and population growth. In consequence, mobile line penetration rose to 87% from 84% in 2010. During the first nine months of 2011, the Turkish mobile market was very aggressive, which continued during the last quarter. In 2011, all operators focused on increasing the postpaid subscriber base through bundled and contracting offers. On the prepaid front, some rational moves were observed in the first nine months; however during the last quarter competition became more aggressive with bundled offers similar to the postpaid front, as well as increased communication in the market. In summary, the competition remained market share focused at the cost of profitability, which continued to pressure prices during the year. On the terminal front, the market adapted quickly to the fast growing mobile internet era thru a wider portfolio of devices and segmented offers available for contracted smartphones. During the year, in line with the decline in smartphone prices, smartphone sales ramped up, whereby its share in handset sales reached 27% in 2011. Under the circumstances, we strengthened our leadership and continued to position Turkcell as a premium offering with a greater focus on customer retention and satisfaction. Accordingly, we registered 1.1 million net additions, marking the lowest churn since 2008. For the postpaid segment, we focused more on encouraging switches and increasing contracted subscribers, thereby recording 1.5 million net postpaid additions, 637,000 of which relate to the last quarter. On the prepaid front, we improved our churn rate by 7.6 pp, mainly through boosting package penetration by upsell thru bundled offers. Overall, we maintained our 53% subscriber market share in the last consecutive 3 quarters. On the data and terminals front, we have enriched our device portfolio and offers in order to increase smartphone penetration as well as data usage. In 2011, we focused on bundled offers at affordable prices, mostly attached to Turkcell branded smartphones, T10, T20 and very recently T11. This strategy provided our subscribers the experience of high quality mobile internet. Indeed, these offers were welcomed by our subscribers, whereby T20 became the best-selling Android smartphone of 2011. Overall, the number of smartphones in our network grew by 90% to 3.8 million (2.0 million). For the full year of 2012, we expect consolidated revenue in the range of TRY9,900 million -TRY10,100 million, to be mainly driven by mobile internet revenues and increased contribution from our subsidiaries. Meanwhile, we aim at consolidated EBITDA of TRY3,000 million -TRY3,200 million, and expect operational group capex as a percentage of revenues at around 17%, similar to the previous year. When we look at the projected quarterly trend for 2012, we estimate the first quarter to be the lowest in terms of profitability. This is due to necessary investments to position ourselves strongly against the competition, thru which we plan to strengthen our leadership and reach our 2012 targets. FINANCIAL AND OPERATIONAL REVIEW OF THE FOURTH QUARTER 2011 AND FULL YEAR 2011 The following discussion focuses principally on the developments and trends in our business in the fourth quarter and full year 2011 in TRY terms. Selected financial information for the fourth quarter of 2010, third quarter of 2011 and full year 2010 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 is also included at the end of this press release. FINANCIAL REVIEW OF TURKCELL GROUP Profit & Loss Statement (million TRY) Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg Total Revenue 2,186.2 2,445.5 11.9% 9,003.6 9,370.1 4.1% Direct cost of revenues[1] (1,268.6) (1,791.8) 41.2% (5,039.2) (5,954.3) 18.2% Depreciation and amortization (297.3) (596.4) 100.6% (1,139.7) (1,592.9) 39.8% Gross Margin 42.0% 26.7% (15.3pp) 44.0% 36.5% (7.5pp) Administrative expenses (139.3) (103.8) (25.5%) (521.9) (410.9) (21.3%) Selling and marketing expenses (426.6) (451.6) 5.9% (1,633.9) (1,684.9) 3.1% EBITDA[2] 649.0 694.7 7.0% 2,948.3 2,912.9 (1.2%) EBITDA Margin 29.7% 28.4% (1.3pp) 32.7% 31.1% (1.6pp) Net finance income / (expense) 87.7 27.8 (68.3%) 264.0 17.3 93.4%) Finance expense (5.4) (111.8) - (153.4) (528.3) 244.4% Finance income 93.1 139.6 49.9% 417.4 545.6 30.7% Share of profit of associates 40.8 55.0 34.8% 184.7 227.1 23.0% Other income / (expense) (7.3) (4.6) - (9.5) (175.2) - Monetary gains / (losses) - 273.5 - - 273.5 - Income tax expense (104.8) (118.3) 12.9% (483.5) (485.0) 0.3% Net Income 368.1 331.7 (9.9%) 1,764.3 1,177.7 (33.2%) (1) including depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of EBITDA to net cash from operating activities. Revenue: In Q4 2011, Group revenues grew by 11.9% YoY to TRY2,445.5 million (TRY2,186.2 million), which was mainly achieved through 25.8% growth in the mobile internet and services revenues of Turkcell Turkey and 48.9% rise in the consolidated revenue of subsidiaries to TRY403.9 million (TRY271.3 million). For the full year 2011, consolidated revenue improved to TRY 9,370.1 million (TRY 9,003.6 million), mainly due to the 20.1% increase in mobile internet and services revenues of Turkcell Turkey to TRY1,944 million (TRY1,619 million), as well as the 32.3% higher contribution from subsidiaries year-on-year (particularly through Superonline and Astelit). Despite aggressive pricing levels in the market in 2011, Turkcell Turkey's revenues rose by 6.6% to TRY2,041.6 million in Q4 2011 (TRY1,914.9 million), resulting from 25.8% growth in mobile internet and services. In FY11, Turkcell Turkey's interconnect revenues rose by 23.2% to TRY786.5 million (TRY638.4 million), mainly due to increased incoming minutes, which led to a rise in the share of interconnection revenues in Turkcell Turkey's revenues to 9.8% (8.0%). Direct cost of revenues (including depreciation and amortization): Direct cost of revenues increased by 41.2% YoY to TRY1,791.8 million in Q4 2011 (TRY1,268.6 million). Meanwhile, direct cost of revenues as a percentage of total revenues increased to 73.3% (58.0%) in Q4 2011. This mainly stemmed from the rise in depreciation expenses (up 10.8 pp), interconnection costs (up 2.6 pp), network related costs (up 0.7 pp), and other items (up 1.2 pp). During the quarter, depreciation expenses increased to TRY596.4 million (TRY297.3 million), mainly due to one-time impact of inflation accounting amounting to TRY240 million and the impairment impact in Belarusian operations. For the full year, direct cost of revenues rose by 18.2% to TRY5,954.3 million (TRY5,039.2 million). As a percentage of revenue, direct costs increased from 56.0% to 63.5%, mainly due to increases in depreciation and amortization (up 4.3 pp), interconnect costs (up 1.6 pp), wages and salaries (up 0.5 pp), as well as network related costs (up 0.4 pp) and other items (up 0.7 pp). In FY11, Turkcell Turkey's interconnect costs rose to TRY851.9 million (TRY690.8 million), resulting in a rise in Turkcell Turkey's interconnect costs as a percentage of revenues to 10.6% (8.6%). Administrative expenses: Expenses as a percentage of revenues declined by 2.2pp to 4.2% in Q4 2011 (6.4%), mainly due to 2.1 pp drop in bad debt expenses as a percentage of revenues resulting mainly from improved collection performance for the receivables coming from one year and earlier. At the same time, expenses as a percentage of revenues decreased by 1.4 pp in 2011 YoY, which was mainly related to a 1.6 pp fall in bad debt expenses as a percentage of revenues. Selling and marketing expenses: Expenses as a percentage of revenues decreased 1.0 pp YoY to 18.5% (19.5%) in Q4 2011. As a percentage of revenues, frequency usage fees fell 2.7 pp, while selling and marketing expenses rose by 0.4 pp YoY, wages and salaries increased by 0.3pp and other items (up 1.0 pp). For the full year, selling and marketing expenses as a percentage of revenue was almost stable at 18.0% (18.1%), mainly due to lower frequency usage fees paid for prepaid subscribers, which were partially offset by higher marketing and selling expenses. EBITDA: In Q4 2011, EBITDA in nominal terms rose 7.0% to TRY694.7 million (TRY649.0 million), while the EBITDA margin was at 28.4% (29.7%). Although selling and marketing expenses decreased by 1.0pp and general and administrative expenses declined by 2.2 pp (as a percentage of revenues), direct cost of revenues, excluding depreciation and amortization, increased by 4.5 pp as a percentage of revenues. In FY11, EBITDA was at TRY2,912.9 million (TRY2,948.3 million), while the EBITDA margin was at 31.1% (32.7%). As a percentage of revenues, 1.4 pp lower general and administrative expenses together with 0.1 pp lower selling and marketing expenses were compensated by a 3.1 pp higher direct cost of revenues. Net finance income / (expense): In Q4 2011, net finance income registered at TRY27.8 million (TRY87.7 million), mainly due to a TRY92 million translation loss as opposed to a TRY24 million translation gain in Q4 2010. This is partially netted off by the TRY57 million increase in net interest income YoY. -- TRY116 million YoY change in net translation loss mainly relates to BeST, which recorded TRY95 million translation loss in Q4 2011 mainly stemming from 49.1% devaluation of BYR against US$ during the quarter (TRY4 million translation loss in Q4 2010). -- On the other hand, net interest income increased by TRY57 million to TRY120 million in Q4 2011 (TRY63 million) mainly due to increase in interest income from deposits as a result of increase in interest rates on TL deposits as well as increase in cash and cash equivalents including time deposits with maturity of more than 3 months. For the full year, we recorded net finance income of TRY17.3 million (TRY264.0 million) mainly due to TRY438 million translation loss recorded by BeST in FY11 resulting from 178% devaluation in BYR/ US$ rate in Belarus. This is partially offset by TRY227 million translation gain in Turkcell Turkey due to TRY/US$ depreciation of 22.2% in 2011 as well as TRY122 million increase in interest income on time deposits due to increase in cash balance including time deposits with maturity of more than 3 months. Share of profit of equity accounted investees: Our share in the net income of unconsolidated investees, consisting of the net income/(expense) impact of Fintur (income of TRY65.3 million) and A-Tel (expense of TRY10.3 million), rose by 34.8% to TRY55.0 million (TRY40.8 million) YoY in Q4 2011. In FY11, our share in the net income of unconsolidated investees rose by 23.0% from TRY184.7 million to TRY227.1 million. Income tax expense: The total taxation charge in Q4 2011 was at TRY118.3 million (TRY104.8 million). A total tax charge of TRY122.9 million was related to current tax charges, while a deferred tax income of TRY4.6 million was recorded in the quarter. In FY11, the total taxation charge was at TRY485.0 million (TRY483.5 million). Of the total tax charge, TRY512.2 million was related to current tax charges, while a deferred tax income totaled TRY27.2 million. million TRY Quarter Year Q410 Q411 y/y % chg 2010 2011 y/y % chg Current tax expense (141.5) (122.9) (13.1%) (508.1) (512.2) 0.8% Deferred Tax income / (expense) 36.7 4.6 (87.5%) 24.6 27.2 10.6% Income tax expense (104.8) (118.3) 12.9% (483.5) (485.0) 0.3% Net income: The economic environment in Belarus deteriorated significantly starting from the second quarter of 2011. The cumulative inflation in the last three years exceeded 100%. As a result, Belarus was considered as a hyperinflationary economy in Q4 2011. In consequence, "Financial Reporting in hyperinflationary economies" was applied for BeST for the year ending 31 December 2011. In Q4 2011, the financial impact of inflationary accounting on consolidated net income amounted to TRY45 million. Moreover, the net effects of inflation adjustments on the non-monetary items in balance sheet and income statement were recorded as "monetary gains" of TRY274 million in the income statement. "Monetary gains" of TRY274 million was netted off with "depreciation expense" of TRY240 million arising mainly from inflation adjustment. Impairment charges related to the operations in Belarus amounts to TRY16 million excluding the impact of inflation adjustment. In addition, in BeST translation losses were converted to the reporting currency with the period-end rate on the balance sheet date, rather than the average exchange rate. Translation loss was amounting to TRY95 million in Q4 2011 mainly stemming from fx denominated net liabilities of BeST in the amount of US$411 million. Overall, in Q4 2011, Turkcell Group registered a net income of TRY332 million (TRY368 million), mainly due to one-off items mostly stemming from Belarusian operations. Excluding the one-off items and currency devaluation in Belarus, Group net income would have been TRY437 million in Q4 2011. For the full year, net income decreased to TRY1,178 million (TRY1,764 million), mainly on total translation losses recorded at BeST in the amount of TRY438 million, as well as the total impairment charges of TRY204 million in BeST due to 178% devaluation of BYR against US$. Excluding one-off items below the EBITDA line, currency devaluation in Belarus and legal penalties of TRY98 million, Group net income would have been TRY1,913 million. Net income impacts (million TRY) Q411 FY11 Net income excluding one-offs 437 1,913 Inflation accounting impact in BeST 45 45 Depreciation impact (240) (240) Monetary gains / (losses) 274 274 Tax impact 11 11 Translation loss in BeST (95) (438) Impairment in BeST (16) (204) Other impairment charges (34) (40) Other provisions (5) (98) Net income reported 332 1,178 Total Debt: Consolidated debt amounted to TRY3,529 million (US$1,868 million) as of December 31, 2011. TRY982 million (US$520 million) of this was related to Turkcell's Ukrainian operations. TRY2,550 million (US$1,350 million) of our consolidated debt is at a floating rate, while TRY1,531 million (US$811 million) will mature within less than a year. In Q4 2011, the debt/annual EBITDA ratio rose to 121% in TRY terms. Cash Flow Analysis: Capital expenditures in Q4 2011 amounted to TRY716 million, of which TRY361 million was related to Turkcell Turkey, TRY52 million to our Ukrainian operations, TRY172 million to Turkcell Superonline and TRY78 million to BeST. For the full year of 2011, major cash outflows included capital expenditures. 2011 capital expenditures amounted to TRY1,636 million, of which TRY894 million related to Turkcell Turkey, TRY123 million to our Ukrainian operations, TRY393 million to Superonline and TRY104 million to BeST. In FY11 operational group capex as a percentage of revenues was at approximately 17%, and we expect a similar ratio of 17% for 2012. In accordance with IFRS, time deposits whose maturity is longer than 3 months are classified as financial assets. Therefore, cash balance in the balance sheet is shown net of time deposits whose maturity is longer than three months (TRY1,596.1 million). Consolidated Cash Flow (million TRY) Quarter Year Q410 Q411 2010 2011 EBITDA[1] 649.0 694.7 2,948.3 2,912.9 LESS: Capex and License (630.3) (716.2) (1,667.5) (1,635.8) Turkcell (234.9) (361.3) (782.4) (894.3) Ukraine[2] (37.3) (51.9) (102.7) (122.9) Investment & Marketable Securities (154.0)(1,596.1) (64.3) (1,596.1) Net Interest Income/Expense 63.4 120.2 283.8 403.0 Other 492.2 87.1 (662.6) (508.7) Net Change in Debt 62.4 (14.2) 465.9 58.0 Dividends paid - - (859.3) - Cash Generated 482.7 (1,424.5) 444.3 (366.7) Cash Balance 5,105.1 4,738.4 5,105.1 4,738.4 (1) EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of EBITDA to net cash from operating activities. (2)The appreciation of reporting currency (TRY) against US$ is included in this line. OPERATIONAL REVIEW IN TURKEY Summary of Operational Data Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg Number of total subscribers (million) 33.5 34.5 3.0% 33.5 34.5 3.0% Number of postpaid subscribers (million) 10.1 11.7 15.8% 10.1 11.7 15.8% Number of prepaid subscribers (million) 23.3 22.9 (1.7%) 23.3 22.9 (1.7%) ARPU (Average Monthly Revenue per User), blended (US$) 12.9 10.8 (16.3%) 13.0 11.9 (8.5%) ARPU, postpaid (US$) 26.0 20.6 (20.8%) 26.6 23.1 (13.2%) ARPU, prepaid (US$) 7.3 6.0 (17.8%) 7.6 6.6 (13.2%) ARPU, blended (TRY) 18.9 19.7 4.2% 19.5 19.8 1.5% ARPU, postpaid (TRY) 38.2 37.5 (1.8%) 40.0 38.5 (3.8%) ARPU, prepaid (TRY) 10.8 11.0 1.9% 11.4 11.0 (3.5%) Churn (%)* 9.4% 7.7% (1.7pp) 33.9% 27.9% (6.0pp) MOU (Average Monthly Minutes of usage per subscriber), blended 194.9 220.4 13.1% 179.1 213.8 19.4% (*): including the impact of the regulatory change in the definition of prepaid life cycle. Subscribers: Turkcell Turkey's subscriber base totaled 34.5 million (33.5 million) in 2011, up by 3.0% YoY. We managed a highly price competitive environment and recorded positive net subscriber additions of 1.1 million in FY11, which reflects the positive result of investment in our brand and sales channel as well as our greater focus during the year on customer retention and satisfaction. The share of postpaid subscriber base rose to 33.8% (30.1%) and postpaid subscriber base improved by 15.8% YoY to 11.7 million (10.1 million) in line with our value focus. In FY11 we registered a 1.5 million postpaid subscriber addition, of which 637,000 were achieved in the fourth quarter (highest net postpaid additions since Q2 2009). In the meantime, we saw a slowdown in the contraction of the prepaid subscriber base, declining by 1.7% to 22.9 million (23.3 million). Churn Rate: refers to voluntarily and involuntarily disconnected subscribers. In Q4 2011, our churn rate improved to 7.7%, down from 9.4% a year ago, which reflects the lowest figure since Q4 2008 (excluding the impact of the change in prepaid churn periods in Q2 2011). Our annual churn rate decreased 6 pp to 27.9% (33.9%), marking the lowest annual churn rate since 2008. MoU: Our blended minutes of usage per subscriber ("MoU") rose by 13.1% to 220.4 minutes (194.9 minutes) in Q4 2011. In the meantime, MoU increased by 19.4% to 213.8 minutes (179.1) in 2011, as a result of the effective and successful communication of our campaigns and tariffs focused at consumer needs and aimed at all segments. ARPU: Blended average revenue per user ("ARPU") in TRY terms increased by 4.2% to TRY19.7. Postpaid ARPU in TRY terms fell by 1.8% to TRY37.5 (TRY38.2) YoY, despite the rise in incoming and mobile internet revenues, due to intense competition as well as the dilutive impact of switches from the prepaid segment. Meanwhile, prepaid ARPU in TRY terms rose to TRY11.0 (TRY10.8) in Q4 2011 YoY, mainly due to incoming and mobile internet revenues as well as upsell and packaging activities. For the full year 2011, blended ARPU improved by 1.5% YoY to TRY19.8 (TRY19.5). OTHER DOMESTIC AND INTERNATIONAL OPERATIONS Turkcell Superonline: Turkcell Superonline, our wholly-owned subsidiary, provides fixed broadband services by investing in the build-up of a fiber-optic network. Summary data for Turkcell Superonline Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg Revenue (TRY million) 92.0 140.7 52.9% 335.1 460.5 37.4% EBITDA[1] (TRY million) 5.4 31.1 475.9% 32.9 81.6 148.0% EBITDA margin 5.8% 22.1% 16.3pp 9.8% 17.7% 7.9pp Capex (TRY million) 227.7 172.4 (24.3%) 480.3 392.7 (18.2%) (1)EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of Turkcell Superonline's EBITDA to net cash from operating activities. In line with our continued investments in the fiber-optic infrastructure, Turkcell Superonline's network reached approximately 1 million home passes (HP) in Q4 2011. In the meantime, the number of FTTX subscribers reached approximately 261 thousand, while fiber roll-out reached around 30,000 km during the quarter. Turkcell Superonline's contribution to Group financials continued to improve, recording 52.9% YoY revenue growth to TRY140.7 million (TRY92.0 million) in Q4 2011. This mainly stemmed from continued focus on residential segment growth of 93.1% and corporate segment growth of 29.5%, mainly driven by improving synergy with Turkcell Turkey. In the meantime, EBITDA margin increased by 16.3pp to 22.1% (5.8%) during the quarter, mainly due to the 52.9% revenue growth as well as the growth in higher margin data revenues. For the full year, Turkcell Superonline's contribution to Group financials continued to improve with 37.4% revenue growth and an EBITDA margin of 17.7% (9.8%). Meanwhile, Turkcell Superonline for the first time recorded positive full year EBIT in FY11. With the rising synergy of our subsidiary Turkcell Superonline, its share in Turkcell's transmission costs reached 58% in 2011. Overall, the share of non-group revenues at Turkcell Superonline was around 61%. Astelit: Astelit, in which we hold a 55% stake through Euroasia, has operated in Ukraine since February 2005 under the brand "life:)". In line with our turnaround strategy, Astelit's revenues increased by 19.9% YoY to US$98.1 million (US$81.8 million) in Q4 2011 mainly stemming from the growth in subscriber base and blended ARPU as well as growth in mobile internet usage and roaming revenues. Meanwhile, in Q4 2011 Astelit continued to improve its operational profitability, which was up by 4.8 pp to 25.4% (20.6%). For the full year, Astelit returned to top line growth of 8.7% YoY to US$368.8 million (US$339.3 million) mainly driven by the growth of subscriber base, mobile internet & services and roaming revenues. At the same time we sustained EBITDA margin improvement: Astelit's EBITDA improved by 46.0% YoY to US$94.2 million (US$64.5 million), while EBITDA margin increased 6.5 pp to 25.5% (19.0%) in 2011. Improvement resulted from an efficient approach to marketing and selling expenses, as well as other cost-control measures conducted by the company during the year. In 2011, Astelit's number of registered subscribers increased by 0.6 million YoY to 9.7 million, while three-month active subscribers rose by 0.9 million to 7.0 million (6.1 million) mainly driven by positive returns of the regional growth strategy aimed at new acquisitions and expansion of subscriber base. The 3-month active ARPU increased by 6.8% in Q4 2011 and 20.5% in 2011, mainly due to the launch of new tariff plans, increased revenue from international calls and roaming activities throughout the year. MoU climbed by 5.0% in Q4 2011 and by 22.0% in 2011 YoY. Summary Data for Astelit Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg Number of subscribers (million)[1] Total 9.1 9.7 6.6% 9.1 9.7 6.6% Active (3 months)[2] 6.1 7.0 14.8% 6.1 7.0 14.8% MoU (minutes)[3] 185.5 194.7 5.0% 162.3 198.0 22.0% Average Revenue per User (ARPU) in US$ Total 2.9 3.4 17.2% 2.6 3.4 30.8% Active (3 months) 4.4 4.7 6.8% 3.9 4.7 20.5% Revenue (UAH million) 648.3 783.0 20.8% 2,691.0 2,938.8 9.2% Revenue (US$ million) 81.8 98.1 19.9% 339.3 368.8 8.7% EBITDA (US$ million)[4] 16.9 24.9 47.3% 64.5 94.2 46.0% EBITDA margin 20.6% 25.4% 4.8pp 19.0% 25.5% 6.5pp Net Loss (US$ million) (30.9) (16.4) (46.9%) (101.0) (75.8) (25.0%) Capex (US$ million) 21.4 26.6 24.3% 66.5 65.1 (2.1%) (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)Astelit has changed its calculation methodology for minute of usage per customer starting from Q3 2011. The minutes of are now be calculated based on the actual call duration of subscribers. Previously, minutes were calculated on the basis of charging units consumed. This change will have the effect of decreasing Astelit's average minutes of usage (no impact on revenue). For purposes of comparability, figures published for recent periods will be restated to give effect to this change. (4) EBITDA is a non-GAAP financial measurement. See page 15 for the reconciliation of Euroasia's EBITDA to net cash from operating activities. Euroasia holds a 100% stake in Astelit. Fintur: Turkcell holds a 41.45% stake in Fintur, through which it has interests in mobile operations in Kazakhstan, Azerbaijan, Moldova, and Georgia. Quarter Year y/y % y/y % FINTUR Q410 Q411 chg 2010 2011 chg Subscriber (million) Kazakhstan 8.9 10.8 21.3% 8.9 10.8 21.3% Azerbaijan 4.0 4.2 5.0% 4.0 4.2 5.0% Moldova 0.9 1.1 22.2% 0.9 1.1 22.2% Georgia 2.0 2.1 5.0% 2.0 2.1 5.0% TOTAL 15.9 18.2 14.5% 15.9 18.2 14.5% Revenue (US$ million)* Kazakhstan 288 317 10% 1,034 1,211 17% Azerbaijan 138 137 (1%) 531 526 (1%) Moldova 19 21 11% 68 79 16% Georgia 36 36 - 157 142 (10%) Other[1] - - - 2 - - TOTAL 481 511 6% 1,792 1,958 9% (1) Includes intersegment eliminations y/y % y/y % (US$ million) Q410 Q411 chg 2010 2011 chg Fintur's contribution to Turkcell Group's net income 36.7 36.0 (2%) 153.0 165.3 8% (*): A reclassification between Revenues and Selling and Marketing Expenses has been made in the financial statements of Fintur regarding distributors' commissions. In Q4 2011, Fintur continued to improve its market position, adding approximately 0.9 million net new subscribers, whereby its total subscriber base reached 18.2 million, mainly on growth in Kazakhstan. Fintur's consolidated revenue increased by 6% year-on-year to US$511 million (US$481 million) in Q4 2011 while revenues grew by 9% to US$1,958 million (US$1,792 million) in FY11 mainly driven by a 17% increase in revenues of our operation in Kazakhstan along with strong subscriber acquisitions. We account for our investment in Fintur using the equity method. Fintur's contribution to net income increased from TRY53.9million (US$36.7 million) in Q4 2010 to TRY65.3 million (US$36.0 million) in Q4 2011. Fintur's contribution to income was US$165.3 million in 2011 ($153.0 million). TURKCELL GROUP SUBSCRIBERS We had approximately 64.8 million subscribers as of December 31, 2011. This figure is calculated by taking the number of subscribers in Turkcell and each of our subsidiaries and unconsolidated investees. It includes the total number of mobile subscribers in Astelit and BeST, as well as in our operations in the Turkish Republic of Northern Cyprus ("Northern Cyprus"), Fintur and Turkcell Europe. Turkcell Group subscribers rose by 4.4 million in 2011 compared to the previous year, thanks to the increased subscriber base of Turkcell Turkey and Fintur, as well as the contribution of Astelit. Turkcell Group Subscribers (million) 2010 2011 y/y % chg Turkcell 33.5 34.5 3.0% Ukraine 9.1 9.7 6.6% Fintur 15.9 18.2 14.5% Northern Cyprus 0.4 0.4 - Belarus 1.5 1.8 20% Turkcell Europe - 0.2 - TURKCELL GROUP 60.4 64.8 7.3% OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates that have been used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Year Q410 Q411 y/y % chg 2010 2011 y/y % chg TRY / US$ rate Closing Rate 1.5460 1.8889 22.2% 1.5460 1.8889 22.2% Average Rate 1.4717 1.8209 23.7% 1.5050 1.6698 11.0% Consumer Price Index 1.6% 5.7% 4.1pp 6.4% 10.4% 4.0pp GDP Growth 9.2% n.a. n.a. 8.9% n.a. n.a. UAH/ US$ rate Closing Rate 7.96 7.99 0.4% 7.96 7.99 0.4% Average Rate 7.93 7.98 0.6% 7.93 7.97 0.5% BYR/ US$ rate Closing Rate 3.000 8.350 178.3% 3.000 8.350 178.3% Average Rate 3.016 8.025 166.1% 2.979 5.038 69.1% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS Webelieve 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* US$ million Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg EBITDA 441.9 383.5 (13.2%) 1,957.4 1,748.1 (10.7%) Income tax expense (71.3) (67.1) (5.9%) (320.8) (292.2) (8.9%) Other operating income/(expense) (17.4) 1.9 (110.9%) (49.4) (57.9) 17.2% Financial income 1.5 7.5 400.0% 0.5 29.0 - Financial expense (35.9) (13.9) (61.3%) (100.4) (81.5)(18.8%) Net increase/(decrease) in assets and liabilities 181.2 (29.6)(116.3%) (224.7) (419.7) 86.8% Net cash from operating activities 500.0 282.3 (43.5%) 1,262.6 925.8 (26.7%) Turkcell Superonline TRY million Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg EBITDA 5.4 31.1 475.9% 32.9 81.6 148.0% Other operating income/(expense) 0.2 0.3 50.0% 0.4 0.9 125.0% Finance income (28.1) 1.0 (103.6%) (9.5) 6.6 (169.5%) Finance expense 22.1 (15.0) (167.9%) (18.5) (49.1) 165.4% Net increase/(decrease) in assets and liabilities 26.6 47.5 78.6% (2.6) (40.6) - Net cash from operating activities 26.2 64.8 147.3% 2.7 (0.6) (122.2%) Roun EUROASIA (Astelit) US$ million Quarter Year y/y % y/y % Q410 Q411 chg 2010 2011 chg EBITDA 16.9 24.9 47.3% 64.5 94.2 46.0% Other operating income/(expense) (1.6) 1.9 (218.8%) (1.3) 2.1 (261.5%) Finance income 0.1 0.3 200.0% 0.8 0.7 (12.5%) Finance expense (13.7) (14.8) 8.0% (45.6) (54.2) 18.9% Net increase/(decrease) in assets and liabilities 33.2 13.4 (59.6%) 48.3 26.5 (45.1%) Net cash from operating activities 34.9 25.7 (26.4%) 66.7 69.3 3.9% (*): The Company for December 30, 2010 revised the manner in which it accounts for the impact of changes in foreign exchange rates in its statement of cash flows, and revised its presentation of prior periods, resulting in a change in the allocation of the impact of foreign exchange rate changes among "Operating activities", "Effects of foreign exchange on statement of financial position items" and "Effect of foreign exchange rate changes on cash" in the statement of cash flows. For further information on such changes, please refer to our consolidated financial statements and notes as at and for December 30, 2011, which can be accessed in the investor relations section of our web site (http://www.turkcell.com.tr). 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 2010 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 34.5 million subscribers and a market share of approximately 53% as of December 31, 2011 (Source: Operator's announcements as of December 31). Turkcell is a leading regional player, with market leadership in five of the nine countries in which it operates with its approximately 64.8 million subscribers as of December 31, 2011. The company covers approximately 88% of the Turkish populationthrough its 3G and99.13% through its 2G technology supported network. It has become one of the first among the global operators to have implemented HSDPA+ and achieved a 43.2 Mbps speed using the HSPA multi carrier solution. Turkcell reported a TRY9.4 billion (US$5.6 billion) net revenue with total assets of TRY17.2 billion (US$9.1 billion) as of December 31, 2011.It has been listed on the NYSE and the ISE since July 2000, and is the only NYSE-listed company inTurkey.Read more athttp://www.turkcell.com.tr TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million) Quarter Quarter Quarter12 Months12 Months Ended Ended Ended Ended Ended DecemberSeptember December December December 31, 30, 31, 31, 31, 2010 2011 2011 2010 2011 Consolidated Statement of Operations Data Revenues Communication fees 2,042.6 2,372.6 2,252.8 8,535.3 8,724.7 Commission fees on betting business 15.9 17.8 31.5 46.7 86.5 Monthly fixed fees 31.0 26.0 24.7 113.5 104.5 Simcard sales 6.3 11.5 8.2 34.4 35.3 Call center revenues and other revenues 90.4 99.1 128.3 273.7 419.1 Total revenues 2,186.2 2,527.0 2,445.5 9,003.6 9,370.1 Direct cost of revenues (1,268.6)(1,477.0)(1,791.8)(5,039.2)(5,954.3) Gross profit 917.6 1,050.0 653.7 3,964.4 3,415.8 Administrative expenses (139.3) (94.8) (103.8) (521.9) (410.9) Selling & marketing expenses (426.6) (421.3) (451.6)(1,633.9)(1,684.9) Other Operating Income / (Expense) (25.7) 14.9 (10.4) (74.4) (218.5) Operating profit before financing costs 326.0 548.8 87.9 1,734.2 1,101.5 Finance costs (5.4) (61.0) (111.8) (153.4) (528.3) Finance income 93.1 142.2 139.6 417.4 545.6 Monetary gain/(loss) - - 273.5 - 273.5 Share of profit of equity accounted investees 40.8 59.5 55.0 184.7 227.1 Income before taxes and minority interest 454.5 689.5 444.2 2,182.9 1,619.4 Income tax expense (104.8) (162.3) (118.3) (483.5) (485.0) Income before minority interest 349.7 527.2 325.9 1,699.4 1,134.4 Non-controlling interests 18.4 10.0 5.8 64.9 43.3 Net income 368.1 537.2 331.7 1,764.3 1,177.7 Net income per share 0.17 0.24 0.15 0.80 0.54 Other Financial Data Gross margin 42% 42% 27% 44% 36% EBITDA(*) 649.0 871.3 694.7 2,948.3 2,912.9 Capital expenditures 630.3 401.5 716.2 1,667.5 1,635.8 Consolidated Balance Sheet Data (at period end) Cash and cash equivalents 5,105.1 6,162.9 4,738.4 5,105.1 4,738.4 Total assets 15,142.4 16,645.9 17,186.7 15,142.4 17,186.7 Long term debt 2,175.7 2,231.9 1,997.3 2,175.7 1,997.3 Total debt 2,840.8 3,450.5 3,528.6 2,840.8 3,528.6 Total liabilities 5,505.3 6,120.5 6,360.3 5,505.3 6,360.3 Total shareholders' equity / Net Assets 9,637.1 10,525.4 10,826.4 9,637.1 10,826.4 ** For further details, please refer to our consolidated financial statements and notes as at 31 December 2011 on our web site. TURKCELL ILETISIM HIZMETLERI A.S. CMB SELECTED FINANCIALS (TRY Million) Quarter Quarter Quarter 12 Months 12 Months Ended Ended Ended Ended Ended DecemberSeptember December December December 31, 30, 31, 31, 31, 2010 2011 2011 2010 2011 Consolidated Statement of Operations Data Revenues Communication fees 2,042.6 2,372.6 2,252.8 8,535.3 8,724.7 Commission fees on betting business 15.9 17.8 31.5 46.7 86.5 Monthly fixed fees 31.0 26.0 24.7 113.5 104.5 Simcard sales 6.3 11.5 8.2 34.4 35.3 Call center revenues and other revenues 90.4 99.1 128.3 273.7 419.1 Total revenues 2,186.2 2,527.0 2,445.5 9,003.6 9,370.1 Direct cost of revenues (1,268.8) (1,476.6) (1,790.5) (5,030.2) (5,948.8) Gross profit 917.4 1,050.4 655.0 3,973.4 3,421.3 Administrative expenses (139.3) (94.8) (103.8) (521.9) (410.9) Selling & marketing expenses (426.6) (421.3) (451.6) (1,633.9) (1,684.9) Other Operating Income / (Expense) (24.3) 14.9 (10.4) (74.2) (217.3) Operating profit before financing costs 327.2 549.2 89.2 1,743.4 1,108.2 Finance costs (5.4) (61.0) (111.8) (153.4) (528.3) Finance income 93.1 142.1 139.7 417.4 545.6 Monetary gain/(loss) - - 273.5 - 273.5 Share of profit of equity accounted investees 40.8 59.6 55.0 184.7 227.1 Income before taxes and minority interest 455.7 689.9 445.6 2,192.1 1,626.1 Income tax expense (105.0) (162.4) (118.1) (485.4) (486.1) Income before minority interest 350.7 527.5 327.5 1,706.7 1,140.0 Non-controlling interests 18.4 10.0 5.8 64.9 43.3 Net income 369.1 537.5 333.3 1,771.6 1,183.3 Net income per share 0.17 0.24 0.15 0.80 0.54 Other Financial Data Gross margin 42% 42% 27% 44% 37% EBITDA(*) 649.0 871.3 694.7 2,948.3 2,912.9 Capital expenditures 630.3 401.5 716.2 1,667.5 1,635.8 Consolidated Balance Sheet Data (at period end) Cash and cash equivalents 5,105.1 6,162.9 4,738.4 5,105.1 4,738.4 Total assets 15,096.0 16,604.8 17,147.0 15,096.0 17,147.0 Long term debt 2,175.7 2,231.9 1,997.3 2,175.7 1,997.3 Total debt 2,840.8 3,452.0 3,528.6 2,840.8 3,528.6 Total liabilities 5,497.4 6,113.9 6,353.5 5,497.4 6,353.5 Total shareholders' equity / Net Assets 9,598.6 10,491.0 10,793.5 9,598.6 10,793.5 ** For further details, please refer to our consolidated financial statements and notes as at 31 December 2011 on our web site. TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (US$ MILLION) Quarter Quarter Quarter 12 Months 12 Months Ended Ended Ended Ended Ended DecemberSeptember December December December 31, 30, 31, 31, 31, 2010 2011 2011 2010 2011 Consolidated Statement of Operations Data Revenues Communication fees 1,388.9 1,382.4 1,231.6 5,670.2 5,225.4 Commission fees on betting business 10.8 10.3 17.3 31.2 51.4 Monthly fixed fees 21.1 15.2 13.6 75.4 63.0 Simcard sales 4.3 6.7 4.5 22.9 21.2 Call center revenues and other revenues 61.5 57.7 69.0 182.4 248.7 Total revenues 1,486.6 1,472.3 1,336.0 5,982.1 5,609.7 Direct cost of revenues (861.9) (858.8) (960.8) (3,349.0) (3,528.9) Gross profit 624.7 613.5 375.2 2,633.1 2,080.8 Administrative expenses (95.2) (55.2) (56.1) (347.3) (246.5) Selling & marketing expenses (289.5) (245.7) (246.7) (1,085.8) (1,010.6) Other Operating Income / (Expense) (17.4) 7.0 4.8 (49.5) (128.7) Operating profit before financing costs 222.6 319.6 77.2 1,150.5 695.0 Finance costs (4.5) (34.0) (28.6) (102.6) (289.7) Finance income 63.0 82.0 82.2 277.1 330.3 Monetary gain/(loss) 144.8 144.8 Share of profit of equity accounted investees 27.8 35.0 30.3 122.8 136.9 Income before taxes and minority interest 308.9 402.6 305.9 1,447.8 1,017.3 Income tax expense (71.3) (94.8) (67.1) (320.8) (292.2) Income before minority interest 237.6 307.8 238.8 1,127.0 725.1 Non-controlling interests 12.4 5.8 3.2 43.2 26.6 Net income 250.0 313.6 242.0 1,170.2 751.7 Net income per share 0.11 0.14 0.11 0.53 0.34 Other Financial Data Gross margin 42% 42% 28% 44% 37% EBITDA(*) 441.9 507.6 383.5 1,957.4 1,748.1 Capital expenditures 363.9 180.0 367.7 1,078.6 866.0 Consolidated Balance Sheet Data (at period end) Cash and cash equivalents 3,302.2 3,339.8 2,508.5 3,302.2 2,508.5 Total assets 9,794.6 9,020.7 9,098.8 9,794.6 9,098.8 Long term debt 1,407.3 1,209.5 1,057.4 1,407.3 1,057.4 Total debt 1,837.5 1,869.9 1,868.1 1,837.5 1,868.1 Total liabilities 3,561.0 3,316.8 3,367.2 3,561.0 3,367.2 Total equity 6,233.6 5,703.9 5,731.6 6,233.6 5,731.6 * Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 14-15. ** For further details, please refer to our consolidated financial statements and notes as at 31 December 2011 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 SOURCE Turkcell |
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| 18. Turkey steel output up 17% in 2011 |
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| February 23, 2012 Asia Pulse reports that Turkey's steel production was up 17 per cent year-on-year in 2011. According to figures of World Steel Association, Turkey was the country that raised its crude steel production the most among top 15 steel producers in the world. Turkey produced 34.1 million tons of steel in 2011 and came the eighth in the world following Germany. The country was the tenth in the list a year ago. Turkey aims at producing 38 million tons of steel with a 11 per cent rise in 2012. |
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