In Q319, lifecell revenues in TRY terms rose
26% year-on-year, while its EBITDA increased to TRY184 million with an EBITDA margin of 53.0%.
(2) 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.
(3) Active subscribers are
those who in the past three months made a revenue generating activity.
lifecell’s three-month active subscriber
base increased to 6.9 million during the quarter on the back of attractive offers and strong retention focus. lifecell’s
3-month active ARPU grew 26.0% year-on-year in Q319 mainly driven by increased data consumption of its subscribers. Meanwhile,
lifecell continued upsell efforts and attracted high ARPU generating subscribers by leveraging the quality of its 4.5G and 3G networks
and attractive digital services, which also contributed to the strong ARPU performance.
lifecell continued to expand its 4.5G subscriber
base in Q319. Accordingly, the share of 3-month active 4.5G users in total mobile data users exceeded 45% and led to higher data
consumption. Average data consumption per user grew by 59% year-on-year with the increasing number and rising data consumption
of 4.5G users. During the quarter, lifecell continued its leadership of the Ukrainian market in smartphone penetration, which had
reached 79% as at the end of Q319.
lifecell continued its focus on increasing
the penetration of its digital services within its customer base and enrich its digital product portfolio. In Q319, lifecell launched
its digital authentication service Mobile ID facilitating access to electronic platforms and enabling digital signature for electronic
documents.
(1) BeST, in which we hold
an 80% stake, has operated in Belarus since July 2008.
In Q319, BeST’s revenues in TRY terms
rose by 12.1% year-on-year, which led to an EBITDA margin of 27.2%.
BeST continued to expand 4G coverage, which
translated into increased penetration of services within its customer base. Accordingly, 4G users reached 51% of the 3-month active
subscriber base, which continued to support mobile data consumption and digital services usage. In Q319, the average monthly data
consumption of subscribers rose by 58% year-over-year to 6.9GB. Meanwhile, BeST also continued to expand the penetration of its
digital services, which translated into higher ARPU growth and increased loyalty. Music and TV services have been the main drivers
of digital revenue growth. Subscribers who use at least one digital service comprised 26% of the 3-month active subscriber base.
(2) Kuzey Kıbrıs
Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999.
On December 12, 2018, Turkcell signed a binding
agreement and on April 2, 2019 completed the transfer of its shares in Fintur to Sonera Holding B.V., the majority shareholder
of Fintur. The final value of the transaction was EUR352.9 million. As the conditions precedent required for the share transfer
were completed within Q119, TRY772 million profit generated from the transaction is reflected in the Q119 financial statements.
We booked a provision of TRY60 million in
Q219 for recognition of liability in relation to the Kcell Share Purchase Agreement regarding past Kcell transaction.
Turkcell Group subscribers amounted to approximately
48.5 million as of September 30, 2019. This figure is calculated by taking the number of subscribers of Turkcell Turkey and each
of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the
mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell and lifecell Europe.
(2) Subscribers to more
than one service are counted separately for each service.
(3) The “wholesale
traffic purchase” agreement, signed between Turkcell Europe GmbH operating in Germany and Deutsche Telekom for five years
in 2010, had been modified to reflect the shift in business model to a “marketing partnership”. The new agreement between
Turkcell and a subsidiary of Deutsche Telekom was signed on August 27, 2014. The transfer of Turkcell Europe operations to Deutsche
Telekom’s subsidiary was completed on January 15, 2015. Subscribers are still included in the Turkcell Group Subscriber figure.
Turkcell Europe was rebranded as lifecell Europe on January 15, 2018.
(1) Swap interest income
/ (expense) which was included in fair value gain on derivative financial instruments line in previous quarters has been presented
separately.
The above condensed consolidated interim statement
of financial position should be read in conjunction with the accompanying notes.
The above condensed consolidated interim statement
of financial position should be read in conjunction with the accompanying notes.
The above condensed consolidated interim statement
of profit or loss should be read in conjunction with the accompanying notes.
The above condensed consolidated interim statement
of comprehensive income should be read in conjunction with the accompanying notes.
(*) Included in Reserves in the condensed consolidated interim statement
of financial position.
The above condensed consolidated interim statement
of changes in equity should be read in conjunction with the accompanying notes.
The above condensed consolidated interim statement
of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
Notes to the condensed consolidated interim
financial statements
|
Page
|
1. Reporting entity
|
8
|
2. Basis of preparation
|
8
|
3. Significant accounting policies
|
9
|
4. Segment information
|
12
|
5. Seasonality of operations
|
14
|
6. Finance income and costs
|
15
|
7. Income tax expense
|
15
|
8. Revenue
|
16
|
9. Property, plant and equipment
|
19
|
10. Intangible assets
|
20
|
11. Right of use assets
|
21
|
12. Asset held for sale and discontinued operation
|
22
|
13. Equity
|
23
|
14. Loans and borrowings
|
24
|
15. Derivative financial instruments
|
27
|
16. Financial instruments
|
33
|
17. Guarantees and purchase obligations
|
37
|
18. Commitments and contingencies
|
38
|
19. Related parties
|
40
|
20. Subsidiaries
|
42
|
21. Subsequent events
|
43
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
Turkcell Iletisim
Hizmetleri Anonim Sirketi (the “Company” or “Turkcell”) was incorporated in Turkey on 5 October 1993
and commenced its operations in 1994. The address of the Company’s registered office is Maltepe Aydinevler Mahallesi
Inonu Caddesi No: 20, Kucukyali Ofispark / Istanbul. The Company operates under a 25-year GSM license granted in
and effective from April 1998, a 20-year 3G license granted in and effective from April 2009 and a 13-year 4.5G license
granted in August 2016 and effective from April 2016. The Company’s shares are listed on Borsa Istanbul A.Ş.
(“BIST”) and New York Stock Exchange (“NYSE”).
The condensed consolidated interim financial
statements of the Company as at and for the nine months ended 30 September 2019 comprise the Company and its subsidiaries (together
referred to as the “Group”) and the Group’s interest in an associate.
These condensed consolidated interim financial
statements were approved for issue on 31 October 2019.
The Company’s parent
is Turkcell Holding A.S., which holds 51% of the Company’s shares as of 30 September 2019. The main shareholders of
Turkcell Holding A.S. are TeliaSonera Finland Oyj (Sonera), Cukurova Group and Alfa Telecom Turkey Limited
(“Alfa”) according to the information obtained from public sources.
In order to ensure compliance with
corporate governance principles of the CMB, 3 independent board members were appointed in 2013. Additionally, two board
members were appointed at the General Assembly dated 29 April 2013 as per the resolution of CMB. Also in 2013, 2 members were
chosen from the independent nominees list submitted by Sonera to CMB. On 29 March 2018, in accordance with the shareholder
proposal at the Ordinary General Assembly, 3 new members were elected to serve for 3 years instead of 3 members who are not
among independent members appointed by the CMB. 2 new board members were appointed on 7 and 8 March 2019 in lieu of board
members who had resigned at various dates in 2019. As a result of reappointment of these 2 board members for 3 years in
Ordinary General Assembly Meeting which was held on 12 September 2019, Turkcell’s Board of Directors consists of a
total of 7 non-executive members including 3 independent members as of 30 September 2019.
The Company transfered its total shareholding
in Fintur Holding B.V. (Fintur) to other shareholder of Fintur, Sonera Holding B.V. (“Sonera Holding”). Transfer to
Sonera Holding and the transfer of proceeds completed on 2 April 2019 subsequent to obtainment of regulatory approvals on 29 March
2019. (Note 12).
Other current and non-current assets mainly
consists of business advances, prepaid expenses and advance given for acquisition of property, plant and equipment respectively.
These condensed consolidated interim financial
statements for the nine months ended 30 September 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting.
These condensed consolidated interim financial
statements do not include all the notes of the type
normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with
the annual financial statements for the year ended 30 September 2019 and any public announcements made by the Company during the
interim reporting period.
The accounting policies, presentation and
methods of computation are consistent with those of the previous financial year and corresponding interim reporting period, except
for the adoption of new accounting policies for transactions occurred during the nine months ended 30 September 2019 as set out
in Note 3.
As at 30 September 2019, interest income
and expense on financial assets measured at amortized cost are shown netted of on condensed consolidated interim statement of profit
or loss (Note 6). The Company has presented financials of 30 September 2018 accordingly which amount is TL 119,891. This classification
has no impact on operating profit, profit for the year and cash flow statement.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
2.
|
Basis of preparation (continued)
|
As at 30 September 2018, TL 265,403 has been
classified between net impairment losses on financial and contract assets and administrative and selling and marketing expenses
according to IFRS 9.
As
of 30 September 2018 revenue and cost of revenue from Turkcell Odeme Hizmetleri A.S. (“Turkcell Odeme”) has
been classified under financial services which amounts are respectively TL 135,564 and TL (24,624) and as at 31 December
2018 trade receivables from Turkcell Odeme has been classified under receivables from financial services which amount is
TL 32,012. The Company made the relevant reclassifications in the condensed consolidated interim financial statements as of
30 September 2018 (Notes 4 and 8). This classification has no impact on operating profit, profit for the year and cash
flow statement.
3.
|
Significant accounting policies
|
Foreign
currency hedge of net investments in foreign operations
The Company designates
its foreign currency bank loans to hedge its net investment in a foreign operation. Foreign exchange gain and/or loss resulting
from the subsidiary’s net investment portion of this loan is reclassified to other comprehensive income. Foreign exchange
gain and/or loss resulting from the subsidiary’s net investment portion of this loan reclassified to other comprehensive
income will be transferred to profit and loss in case of disposal of subsidiary. Tax effects of foreign exchange gain and/or loss
resulting from the subsidiary’s net investment portion of this loan is recognized under other comprehensive income as well
(Note 13).
New standards and interpretations
i)
|
Standards, amendments and interpretations effective as at 30 September 2019
|
|
-
|
Amendment to IFRS 9, ‘Financial instruments’; effective from annual periods
beginning on or after 1 January 2019. This amendment confirm two points: (1) that reasonable compensation for prepayments can be
both negative or positive cash flows when considering whether a financial asset solely has cash flows that are principal and interest
and (2) that when a financial liability measured at amortised cost is modified without this resulting in de-recognition, a gain
or loss should be recognised immediately in profit or loss. The gain or loss is calculated as the difference between the original
contractual cash flows and the modified cash flows discounted at the original effective interest rate. This means that the difference
cannot be spread over the remaining life of the instrument which may be a change in practice from IAS 39.
|
|
-
|
Amendment to IAS 28, ‘Investments in associates and joint venture’; effective
from annual periods beginning on or after 1 January 2019. These amendments clarify that companies account for long-term interests
in associate or joint venture to which the equity method is not applied using IFRS 9.
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
3.
|
Significant in accounting policies (continued)
|
New standards and interpretations
(continued)
i)
|
Standards, amendments and interpretations effective as at 30 September 2019 (continued)
|
|
-
|
IFRIC 23, ‘Uncertainty over income tax treatments’; effective from annual periods
beginning on or after 1 January 2019. This IFRIC clarifies how the recognition and measurement requirements of IAS 12 ‘Income taxes’, are applied where there is uncertainty over income tax treatments. The IFRS IC had clarified
previously that IAS 12, not IAS 37 ‘Provisions, contingent liabilities and contingent assets’, applies to accounting
for uncertain income tax treatments. IFRIC 23 explains how to recognise and measure deferred and current income tax assets and
liabilities where there is uncertainty over a tax treatment. An uncertain tax treatment is any tax treatment applied by an entity
where there is uncertainty over whether that treatment will be accepted by the tax authority. For example, a decision to claim
a deduction for a specific expense or not to include a specific item of income in a tax return is an uncertain tax treatment if
its acceptability is uncertain under tax law. IFRIC 23 applies to all aspects of income tax accounting where there is an uncertainty
regarding the treatment of an item, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits
and tax rates.
|
|
-
|
Annual improvements 2015-2017; effective from annual periods beginning on or after 1 January 2019. These amendments include minor changes to:
|
|
·
|
IFRS 3, ‘Business combinations’, – a company remeasures its previously held interest
in a joint operation when it obtains control of the business.
|
|
·
|
IFRS 11, ‘Joint arrangements’, – a company does not remeasure its previously
held interest in a joint operation when it obtains joint control of the business.
|
|
·
|
IAS 12, ‘Income taxes’ – a company accounts for all income tax consequences of
dividend payments in the same way.
|
|
·
|
IAS 23, ‘Borrowing costs’ – a company treats as part of general borrowings any
borrowing originally made to develop an asset when the asset is ready for its intended use or sale.
|
|
-
|
Amendments to IAS 19, ‘Employee benefits’ on plan amendment, curtailment or settlement’;
effective from annual periods beginning on or after 1 January 2019. These amendments require an entity to:
|
|
·
|
Use updated assumptions to determine current service cost and net interest for the reminder of
the period after a plan amendment, curtailment or settlement and
|
|
·
|
Recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any
reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
3.
|
Significant in accounting policies (continued)
|
New standards and interpretations (continued)
ii)
|
Standards, amendments and interpretations that are issued but not effective as at 30 September 2019:
|
|
-
|
Amendments to IAS 1 and IAS 8 on the definition of material; effective from Annual periods
beginning on or after 1 January 2020. These amendments to IAS 1, ‘Presentation of financial statements’, and IAS 8,
‘Accounting policies, changes in accounting estimates and errors’, and consequential amendments to other IFRSs:
|
|
·
|
Use a consistent definition of materiality throughout IFRSs and the Conceptual Framework for Financial
Reporting
|
|
·
|
Clarify the explanation of the definition of material and
|
|
·
|
Incorporate some of the guidance in IAS 1 about immaterial information.
|
|
-
|
Amendments to IFRS 3 - definition of a business; effective from Annual periods beginning
on or after 1 January 2020. This amendment revises the definition of a business. According to feedback received by the IASB, application
of the current guidance is commonly thought to be too complex, and it results in too many transactions qualifying as business combinations.
|
|
-
|
Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest
rate benchmark reform; effective from Annual periods beginning on or after 1 January
2020. These amendments provide certain reliefs in connection with interest rate benchmark reform. The reliefs relate to hedge accounting
and have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness
should continue to be recorded in the income statement. Given the pervasive nature of hedges involving IBOR-based contracts, the
reliefs will affect companies in all industries.
|
|
-
|
IFRS 17, ‘Insurance contracts’; effective from annual periods beginning on
or after 1 January 2021. This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for
insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and
investment contracts with discretionary participation features.
|
The Company does not expected material impact
of new standards and interpretations on Company’s accounting policies.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
4. Segment
information
In accordance with its integrated communication
and technology services strategy, Group has reportable segments which are Turkcell Turkey, Turkcell International and Other. While
some of these strategic segments offer the same types of services, they are managed separately because they operate in different
geographical locations and are affected by different economic conditions.
Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker function
is carried out by the Board of Directors, however Board of Directors may transfer the authorities, other than recognized by the
law, to the General Manager and other directors.
Turkcell Turkey reportable segment includes
the operations of Turkcell, Turkcell Superonline Iletisim Hizmetleri A.S. (“Turkcell Superonline”), Turkcell Satis
ve Dijital Is Servisleri Hizmetleri A.S. (“Turkcell Satis”), group call center operations of Global Bilgi Pazarlama
Danismanlık ve Cagri Servisi Hizmetleri A.S. (“Turkcell Global Bilgi”), Turktell Bilisim Servisleri A.S. (“Turktell”),
Turkcell Teknoloji Arastirma ve Gelistirme A.S. (“Turkcell Teknoloji”), Kule Hizmet ve Isletmecilik A.S. (“Global
Tower”), Rehberlik Hizmetleri Servisi A.S. (“Rehberlik”) and Turkcell Gayrimenkul Hizmetleri A.S. (“Turkcell
Gayrimenkul”).
Turkcell International reportable segment
includes the operations of Kibris Mobile Telekomunikasyon Limited Sirketi (“Kibris Telekom”), East Asian Consortium
B.V. (“Eastasia”), Lifecell LLC (“lifecell”), Lifecell Ventures Coöperatief U.A (“Lifecell Ventures”),
Beltel Telekomunikasyon Hizmetleri A.S. (“Beltel”), CJSC Belarusian Telecommunications Network (“Belarusian Telecom”),
LLC UkrTower (“UkrTower”), LLC Global Bilgi (“Global LLC”), Turkcell Europe GmbH (“Turkcell Europe”),
Lifetech LLC (“Lifetech”), Beltower LLC (“Beltower”) and Lifecell Digital Limited (“Lificell Digital”).
The operations of these legal entities aggregated into one reportable segment as the nature of services are similar and most of
them share similar economic characteristics.
Other reportable segment mainly comprises
the information and entertainment services in Turkey and Azerbaijan, non-group call center operations of Turkcell Global Bilgi,
Turkcell Finansman A.Ş.(“ Turkcell Finansman”), Turkcell Odeme, Turkcell Özel Finansman A.Ş. (“TÖFAŞ”),
Turkcell Enerji Cozumleri ve Elektrik Satıs Ticaret A.S (“Turkcell Enerji”) Paycell LLC (“Paycell”),
Turkcell Sigorta Aracılık Hizmetleri A.Ş (“Turkcell Sigorta”), Türkiye’nin Otomobili Girişim
Grubu Sanayi ve Ticaret A.Ş.(“Türkiye’nin Otomobili”) and Sofra Kurumsal ve Ödüllendirme
Hizmetleri A.Ş.(“Sofra”).
As of 30 September 2018 in the condensed
consolidated interim financial statements, Turkcell Odeme had been reported under Turkcell Turkey segments because of its revenue
and operational structure. As of 30 September 2019 in the condensed consolidated interim financial statements, the company is classified in other segment
due to the fact that a significant portion of revenue consists of non-group and consumer financing services. The Company has presented
financials of 30 September 2018 accordingly in the condensed consolidated interim financial statements (Note 4 and 8). This classification
has no impact on operating profit, profit for the year and cash flow statement.
The Board primarily uses adjusted EBITDA
to assess the performance of the operating segments. Adjusted EBITDA definition includes revenue, cost of revenue excluding depreciation
and amortization, selling and marketing expenses and administrative expenses.
Adjusted EBITDA is not a financial measure
defined by IFRS as a measurement of financial performance and may not be comparable to other similarly-titled indicators used by
other companies. Reconciliation of Adjusted EBITDA to the consolidated profit for the year is included in the accompanying notes.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
4. Segment
information (continued)
|
|
Nine months ended 30 September
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
All other segments
|
|
Intersegment Eliminations
|
|
Consolidated
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue
|
|
|
15,746,474
|
|
|
|
13,345,112
|
|
|
|
1,441,831
|
|
|
|
1,035,121
|
|
|
|
1,691,970
|
|
|
|
1,541,481
|
|
|
|
(426,919
|
)
|
|
|
(255,558
|
)
|
|
|
18,453,356
|
|
|
|
15,666,156
|
|
Inter-segment revenue
|
|
|
(58,043
|
)
|
|
|
(32,741
|
)
|
|
|
(67,679
|
)
|
|
|
(50,732
|
)
|
|
|
(301,197
|
)
|
|
|
(172,085
|
)
|
|
|
426,919
|
|
|
|
255,558
|
|
|
|
—
|
|
|
|
—
|
|
Revenue from external customers
|
|
|
15,688,431
|
|
|
|
13,312,371
|
|
|
|
1,374,152
|
|
|
|
984,389
|
|
|
|
1,390,773
|
|
|
|
1,369,396
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,453,356
|
|
|
|
15,666,156
|
|
Adjusted EBITDA
|
|
|
6,429,552
|
|
|
|
5,632,870
|
|
|
|
660,112
|
|
|
|
365,715
|
|
|
|
604,232
|
|
|
|
568,856
|
|
|
|
(21,288
|
)
|
|
|
(18,434
|
)
|
|
|
7,672,608
|
|
|
|
6,549,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended 30 September
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
All other segments
|
|
Intersegment Eliminations
|
|
Consolidated
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue
|
|
|
5,652,357
|
|
|
|
4,907,453
|
|
|
|
525,017
|
|
|
|
424,178
|
|
|
|
562,825
|
|
|
|
567,313
|
|
|
|
(153,342
|
)
|
|
|
(99,704
|
)
|
|
|
6,586,857
|
|
|
|
5,799,240
|
|
Inter-segment revenue
|
|
|
(21,742
|
)
|
|
|
(11,706
|
)
|
|
|
(24,853
|
)
|
|
|
(20,526
|
)
|
|
|
(106,747
|
)
|
|
|
(67,472
|
)
|
|
|
153,342
|
|
|
|
99,704
|
|
|
|
—
|
|
|
|
—
|
|
Revenue from external customers
|
|
|
5,630,615
|
|
|
|
4,895,747
|
|
|
|
500,164
|
|
|
|
403,652
|
|
|
|
456,078
|
|
|
|
499,841
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,586,857
|
|
|
|
5,799,240
|
|
Adjusted EBITDA
|
|
|
2,391,613
|
|
|
|
2,047,690
|
|
|
|
236,396
|
|
|
|
150,535
|
|
|
|
213,800
|
|
|
|
203,174
|
|
|
|
(3,129
|
)
|
|
|
(8,626
|
)
|
|
|
2,838,680
|
|
|
|
2,392,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
4. Segment
information (continued)
|
|
Nine
months ended
|
|
Three
months ended
|
|
|
30
September 2019
|
|
30
September 2018
|
|
30
September 2019
|
|
30
September 2018
|
|
|
|
|
|
|
|
|
|
Profit
for the period
|
|
|
2,523,048
|
|
|
|
1,235,730
|
|
|
|
799,364
|
|
|
|
281,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss)
from discontinued operations
|
|
|
(772,436
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
from continuing operations
|
|
|
1,750,612
|
|
|
|
1,235,730
|
|
|
|
799,364
|
|
|
|
281,256
|
|
Income tax expense
|
|
|
551,935
|
|
|
|
456,748
|
|
|
|
229,200
|
|
|
|
144,376
|
|
Finance income
|
|
|
(252,574
|
)
|
|
|
(3,038,121
|
)
|
|
|
82,163
|
|
|
|
(2,113,173
|
)
|
Finance costs
|
|
|
1,765,918
|
|
|
|
4,706,620
|
|
|
|
439,083
|
|
|
|
2,981,846
|
|
Other income
|
|
|
(77,929
|
)
|
|
|
(65,922
|
)
|
|
|
(14,308
|
)
|
|
|
(21,962
|
)
|
Other expenses
|
|
|
296,354
|
|
|
|
252,541
|
|
|
|
107,074
|
|
|
|
144,916
|
|
Depreciation and amortization
|
|
|
3,641,670
|
|
|
|
3,001,003
|
|
|
|
1,197,744
|
|
|
|
975,106
|
|
Share of loss of equity
accounted investees
|
|
|
(3,378
|
)
|
|
|
408
|
|
|
|
(1,640
|
)
|
|
|
408
|
|
Consolidated
adjusted EBITDA
|
|
|
7,672,608
|
|
|
|
6,549,007
|
|
|
|
2,838,680
|
|
|
|
2,392,773
|
|
5.
|
Seasonality of operations
|
The Turkish mobile communications market is
affected by seasonal peaks and troughs. Historically, the effects of seasonality on mobile communications usage had positively
influenced the Company’s results in the second and third quarters of the fiscal year and negatively influenced the results
in the first and fourth quarters of the fiscal year. Recently, however, due to changing market dynamics, such as the Information
Technologies and Communications Authority (“ICTA”)’s
intervention in tariffs and increasing competition in the Turkish telecommunications market, the effects of seasonality on the
Company’s subscribers’ mobile communications usage has decreased. National and religious holidays in Turkey also affect
the Company’s operational results.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
6.
|
Finance income and costs
|
|
|
Nine months ended
|
|
Three months ended
|
|
|
30 September 2019
|
|
30 September 2018
|
|
30 September 2019
|
|
30 September 2018
|
Fair value gains on derivative financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
instruments and interest (*)
|
|
|
—
|
|
|
|
1,565,246
|
|
|
|
225,134
|
|
|
|
782,928
|
|
Cash flow hedges - reclassified to profit
or loss (*)
|
|
|
—
|
|
|
|
1,209,994
|
|
|
|
(377,484
|
)
|
|
|
1,209,994
|
|
Interest income on bank deposits
|
|
|
244,645
|
|
|
|
261,688
|
|
|
|
69,216
|
|
|
|
119,194
|
|
Other
|
|
|
7,929
|
|
|
|
1,193
|
|
|
|
971
|
|
|
|
1,057
|
|
Finance income
|
|
|
252,574
|
|
|
|
3,038,121
|
|
|
|
(82,163
|
)
|
|
|
2,113,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange losses
|
|
|
(607,235
|
)
|
|
|
(4,165,147
|
)
|
|
|
214,371
|
|
|
|
(2,710,524
|
)
|
Fair value losses on derivative financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
instruments and interest (*)
|
|
|
(519,462
|
)
|
|
|
—
|
|
|
|
(519,462
|
)
|
|
|
—
|
|
Cash flow hedges - reclassified to profit
or loss (*)
|
|
|
124,808
|
|
|
|
—
|
|
|
|
124,808
|
|
|
|
—
|
|
Interest expenses for financial liabilities
measured at amortized cost
|
|
|
(747,149
|
)
|
|
|
(483,350
|
)
|
|
|
(254,903
|
)
|
|
|
(239,780
|
)
|
Other
|
|
|
(16,880
|
)
|
|
|
(58,123
|
)
|
|
|
(3,897
|
)
|
|
|
(31,542
|
)
|
Finance costs
|
|
|
(1,765,918
|
)
|
|
|
(4,706,620
|
)
|
|
|
(439,083
|
)
|
|
|
(2,981,846
|
)
|
Net finance costs
|
|
|
(1,513,344
|
)
|
|
|
(1,668,499
|
)
|
|
|
(521,246
|
)
|
|
|
(868,673
|
)
|
(*)Interest expense/income and
fair value and interest of derivative financial instruments are shown netted off on condensed consolidated interim statement of
profit or loss.
Effective tax rates for
the nine and three months ended 30 September 2019 and 2018 are 18%, 22% and 27%, 34% respectively. The decrease in the effective
tax rate is mainly due to the gains arising from the sale of the shares of Fintur are exempt from the corporate tax in accordance
with the Article 10/13-h of the Law no. 7143.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
8. Revenue
|
|
Nine months ended 30 September
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
Other
|
|
Intersegment eliminations
|
|
Consolidated
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunication services
|
|
|
14,040,963
|
|
|
|
12,251,290
|
|
|
|
1,288,222
|
|
|
|
910,596
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(41,473
|
)
|
|
|
(51,966
|
)
|
|
|
15,287,712
|
|
|
|
13,109,920
|
|
Equipment revenues
|
|
|
1,569,062
|
|
|
|
919,577
|
|
|
|
80,090
|
|
|
|
72,860
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,649,152
|
|
|
|
992,437
|
|
Revenue from financial services
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
863,483
|
|
|
|
831,012
|
|
|
|
(686
|
)
|
|
|
(978
|
)
|
|
|
862,797
|
|
|
|
830,034
|
|
Call center revenues
|
|
|
16,055
|
|
|
|
9,319
|
|
|
|
11,641
|
|
|
|
7,318
|
|
|
|
215,280
|
|
|
|
165,261
|
|
|
|
(25,033
|
)
|
|
|
(14,469
|
)
|
|
|
217,943
|
|
|
|
167,429
|
|
Commission fees on betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
132,300
|
|
|
|
142,829
|
|
|
|
—
|
|
|
|
—
|
|
|
|
132,300
|
|
|
|
142,829
|
|
Revenue from betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
186,243
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
186,243
|
|
Other
|
|
|
120,394
|
|
|
|
164,926
|
|
|
|
61,878
|
|
|
|
44,347
|
|
|
|
480,907
|
|
|
|
216,136
|
|
|
|
(359,727
|
)
|
|
|
(188,145
|
)
|
|
|
303,452
|
|
|
|
237,264
|
|
Total
|
|
|
15,746,474
|
|
|
|
13,345,112
|
|
|
|
1,441,831
|
|
|
|
1,035,121
|
|
|
|
1,691,970
|
|
|
|
1,541,481
|
|
|
|
(426,919)
|
|
|
|
(255,558)
|
|
|
|
18,453,356
|
|
|
|
15,666,156
|
|
|
|
Three months ended 30 September
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
Other
|
|
Intersegment eliminations
|
|
Consolidated
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunication services
|
|
|
5,128,536
|
|
|
|
4,461,288
|
|
|
|
465,475
|
|
|
|
375,053
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,675
|
)
|
|
|
(19,679
|
)
|
|
|
5,578,336
|
|
|
|
4,816,662
|
|
Equipment revenues
|
|
|
469,602
|
|
|
|
418,590
|
|
|
|
32,172
|
|
|
|
29,426
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
501,774
|
|
|
|
448,016
|
|
Revenue from financial services
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
276,371
|
|
|
|
306,917
|
|
|
|
(185
|
)
|
|
|
(335
|
)
|
|
|
276,186
|
|
|
|
306,582
|
|
Call center revenues
|
|
|
5,527
|
|
|
|
3,158
|
|
|
|
4,074
|
|
|
|
2,922
|
|
|
|
87,473
|
|
|
|
48,240
|
|
|
|
(9,109
|
)
|
|
|
(5,359
|
)
|
|
|
87,965
|
|
|
|
48,961
|
|
Commission fees on betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,271
|
|
|
|
46,181
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,271
|
|
|
|
46,181
|
|
Revenue from betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
79,621
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
79,621
|
|
Other
|
|
|
48,692
|
|
|
|
24,417
|
|
|
|
23,296
|
|
|
|
16,777
|
|
|
|
172,710
|
|
|
|
86,354
|
|
|
|
(128,373
|
)
|
|
|
(74,331
|
)
|
|
|
116,325
|
|
|
|
53,217
|
|
Total
|
|
|
5,652,357
|
|
|
|
4,907,453
|
|
|
|
525,017
|
|
|
|
424,178
|
|
|
|
562,825
|
|
|
|
567,313
|
|
|
|
(153,342)
|
|
|
|
(99,704)
|
|
|
|
6,586,857
|
|
|
|
5,799,240
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
|
|
30 September 2019
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
Other
|
|
Intersegment eliminations
|
|
Consolidated
|
Telecommunication Services
|
|
|
14,040,963
|
|
|
|
1,288,222
|
|
|
|
—
|
|
|
|
(41,473
|
)
|
|
|
15,287,712
|
|
At a point in time
|
|
|
134,437
|
|
|
|
887
|
|
|
|
—
|
|
|
|
—
|
|
|
|
135,324
|
|
Over time
|
|
|
13,906,526
|
|
|
|
1,287,335
|
|
|
|
—
|
|
|
|
(41,473
|
)
|
|
|
15,152,388
|
|
Equipment Related
|
|
|
1,569,062
|
|
|
|
80,090
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,649,152
|
|
At a point in time
|
|
|
1,505,008
|
|
|
|
72,204
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,577,212
|
|
Over time
|
|
|
64,054
|
|
|
|
7,886
|
|
|
|
—
|
|
|
|
—
|
|
|
|
71,940
|
|
Revenue from financial operations
|
|
|
—
|
|
|
|
—
|
|
|
|
863,483
|
|
|
|
(686
|
)
|
|
|
862,797
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
150,403
|
|
|
|
(686
|
)
|
|
|
149,717
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
713,080
|
|
|
|
—
|
|
|
|
713,080
|
|
Call Center
|
|
|
16,055
|
|
|
|
11,641
|
|
|
|
215,280
|
|
|
|
(25,033
|
)
|
|
|
217,943
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
16,055
|
|
|
|
11,641
|
|
|
|
215,280
|
|
|
|
(25,033
|
)
|
|
|
217,943
|
|
Commission fees on betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
132,300
|
|
|
|
—
|
|
|
|
132,300
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
132,300
|
|
|
|
—
|
|
|
|
132,300
|
|
Revenue from betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
All other segments
|
|
|
120,394
|
|
|
|
61,878
|
|
|
|
480,907
|
|
|
|
(359,727
|
)
|
|
|
303,452
|
|
At a point in time
|
|
|
60,213
|
|
|
|
11,407
|
|
|
|
454
|
|
|
|
(374
|
)
|
|
|
71,700
|
|
Over time
|
|
|
60,181
|
|
|
|
50,471
|
|
|
|
480,453
|
|
|
|
(359,353
|
)
|
|
|
231,752
|
|
Total
|
|
|
15,746,474
|
|
|
|
1,441,831
|
|
|
|
1,691,970
|
|
|
|
(426,919
|
)
|
|
|
18,453,356
|
|
At a point in time
|
|
|
1,699,658
|
|
|
|
84,498
|
|
|
|
150,857
|
|
|
|
(1,060
|
)
|
|
|
1,933,953
|
|
Over time
|
|
|
14,046,816
|
|
|
|
1,357,333
|
|
|
|
1,541,113
|
|
|
|
(425,859
|
)
|
|
|
16,519,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
|
|
30 September 2018
|
|
|
Turkcell Turkey
|
|
Turkcell International
|
|
Other
|
|
Intersegment eliminations
|
|
Consolidated
|
Telecommunication Services
|
|
|
12,251,290
|
|
|
|
910,596
|
|
|
|
—
|
|
|
|
(51,966
|
)
|
|
|
13,109,920
|
|
At a point in time
|
|
|
233,905
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,409
|
)
|
|
|
226,496
|
|
Over time
|
|
|
12,017,385
|
|
|
|
910,596
|
|
|
|
—
|
|
|
|
(44,557
|
)
|
|
|
12,883,424
|
|
Equipment Related
|
|
|
919,577
|
|
|
|
72,860
|
|
|
|
—
|
|
|
|
—
|
|
|
|
992,437
|
|
At a point in time
|
|
|
800,214
|
|
|
|
72,860
|
|
|
|
—
|
|
|
|
—
|
|
|
|
873,074
|
|
Over time
|
|
|
119,363
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
119,363
|
|
Revenue from financial operations
|
|
|
—
|
|
|
|
—
|
|
|
|
831,012
|
|
|
|
(978
|
)
|
|
|
830,034
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
171,238
|
|
|
|
(978
|
)
|
|
|
170,260
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
659,774
|
|
|
|
—
|
|
|
|
659,774
|
|
Call Center
|
|
|
9,319
|
|
|
|
7,318
|
|
|
|
165,261
|
|
|
|
(14,469
|
)
|
|
|
167,429
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
9,319
|
|
|
|
7,318
|
|
|
|
165,261
|
|
|
|
(14,469
|
)
|
|
|
167,429
|
|
Commission fees on betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
142,829
|
|
|
|
—
|
|
|
|
142,829
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
142,829
|
|
|
|
—
|
|
|
|
142,829
|
|
Revenue from betting business
|
|
|
—
|
|
|
|
—
|
|
|
|
186,243
|
|
|
|
—
|
|
|
|
186,243
|
|
At a point in time
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over time
|
|
|
—
|
|
|
|
—
|
|
|
|
186,243
|
|
|
|
—
|
|
|
|
186,243
|
|
All other segments
|
|
|
164,926
|
|
|
|
44,347
|
|
|
|
216,136
|
|
|
|
(188,145
|
)
|
|
|
237,264
|
|
At a point in time
|
|
|
128,992
|
|
|
|
4,161
|
|
|
|
5,182
|
|
|
|
—
|
|
|
|
138,335
|
|
Over time
|
|
|
35,934
|
|
|
|
40,186
|
|
|
|
210,954
|
|
|
|
(188,145
|
)
|
|
|
98,929
|
|
Total
|
|
|
13,345,112
|
|
|
|
1,035,121
|
|
|
|
1,541,481
|
|
|
|
(255,558
|
)
|
|
|
15,666,156
|
|
At a point in time
|
|
|
1,163,111
|
|
|
|
77,021
|
|
|
|
176,420
|
|
|
|
(8,387
|
)
|
|
|
1,408,165
|
|
Over time
|
|
|
12,182,001
|
|
|
|
958,100
|
|
|
|
1,365,061
|
|
|
|
(247,171
|
)
|
|
|
14,257,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
9. Property,
plant and equipment
Cost
|
|
Balance as at 1 January 2019
|
|
Additions
|
|
Disposals
|
|
Transfers
|
|
Impairment expenses/ (reversals)
|
|
Effects of movements in exchange rates
|
|
Balance as at
30 September 2019
|
Network infrastructure (All operational)
|
|
|
19,132,278
|
|
|
|
381,779
|
|
|
|
(400,843
|
)
|
|
|
1,135,953
|
|
|
|
—
|
|
|
|
729,316
|
|
|
20,978,483
|
Land and buildings
|
|
|
929,901
|
|
|
|
16,394
|
|
|
|
—
|
|
|
|
227,938
|
|
|
|
—
|
|
|
|
5,865
|
|
|
1,180,098
|
Equipment, fixtures and fittings
|
|
|
803,500
|
|
|
|
72,622
|
|
|
|
(30,585
|
)
|
|
|
(1,269
|
)
|
|
|
—
|
|
|
|
9,715
|
|
|
853,983
|
Motor vehicles
|
|
|
40,106
|
|
|
|
—
|
|
|
|
(46
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
804
|
|
|
40,864
|
Leasehold improvements
|
|
|
327,492
|
|
|
|
2,973
|
|
|
|
(7
|
)
|
|
|
2
|
|
|
|
—
|
|
|
|
1,937
|
|
|
332,397
|
Construction in progress
|
|
|
512,087
|
|
|
|
1,562,104
|
|
|
|
(1,058
|
)
|
|
|
(1,369,227
|
)
|
|
|
(1,236
|
)
|
|
|
15,830
|
|
|
718,500
|
Total
|
|
|
21,745,364
|
|
|
|
2,035,872
|
|
|
|
(432,539
|
)
|
|
|
(6,603
|
)
|
|
|
(1,236
|
)
|
|
|
763,467
|
|
|
24,104,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network infrastructure (All operational)
|
|
|
9,446,217
|
|
|
|
1,451,343
|
|
|
|
(382,289
|
)
|
|
|
31,167
|
|
|
|
12,759
|
|
|
|
449,683
|
|
|
11,008,880
|
Land and buildings
|
|
|
239,088
|
|
|
|
24,593
|
|
|
|
—
|
|
|
|
(19,192
|
)
|
|
|
—
|
|
|
|
5,021
|
|
|
249,510
|
Equipment, fixtures and fittings
|
|
|
633,507
|
|
|
|
64,046
|
|
|
|
(26,998
|
)
|
|
|
(11,810
|
)
|
|
|
—
|
|
|
|
7,793
|
|
|
666,538
|
Motor vehicles
|
|
|
34,230
|
|
|
|
2,134
|
|
|
|
(46
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
732
|
|
|
37,050
|
Leasehold improvements
|
|
|
276,006
|
|
|
|
22,863
|
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,142
|
|
|
300,004
|
Total
|
|
|
10,629,048
|
|
|
|
1,564,979
|
|
|
|
(409,340
|
)
|
|
|
165
|
|
|
|
12,759
|
|
|
|
464,371
|
|
|
12,261,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
11,116,316
|
|
|
|
470,893
|
|
|
|
(23,199
|
)
|
|
|
(6,768
|
)
|
|
|
(13,995
|
)
|
|
|
299,096
|
|
|
11,842,343
|
Depreciation expense for the
nine and three months ended 30 September 2019 amounting to TL 1,578,974 and 544,335 including impairment losses are recognized
in cost of revenues.
The impaired network infrastructure mainly consists
of damaged or technologically inadequate mobile and fixed line infrastructure investments.
Impairment losses on property, plant and
equipment for the nine and three months ended 30 September 2019 amounting to TL 13,995 and 5,249 are included in depreciation
expense.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
Cost
|
|
Balance at 1 January 2019
|
|
Additions
|
|
Disposals
|
|
Transfers
|
|
Effects of movements in exchange rates
|
|
Balance at
30 September 2019
|
Telecommunication licenses
|
|
|
8,722,998
|
|
|
|
6,357
|
|
|
|
(14,214
|
)
|
|
|
27,107
|
|
|
|
284,244
|
|
|
|
9,026,492
|
|
Computer software
|
|
|
8,539,038
|
|
|
|
887,852
|
|
|
|
(17,370
|
)
|
|
|
53,887
|
|
|
|
80,530
|
|
|
|
9,543,937
|
|
Transmission line software
|
|
|
73,139
|
|
|
|
639
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
73,778
|
|
Central betting system operating right
|
|
|
11,981
|
|
|
|
445
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,426
|
|
Indefeasible right of usage
|
|
|
117,618
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
117,618
|
|
Brand name
|
|
|
7,040
|
|
|
|
365
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,405
|
|
Customer base
|
|
|
15,512
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,512
|
|
Goodwill
|
|
|
32,834
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,834
|
|
Subscriber acquisition cost
|
|
|
2,034,053
|
|
|
|
846,968
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,153
|
|
|
|
2,897,174
|
|
Other
|
|
|
50,005
|
|
|
|
43,911
|
|
|
|
(59
|
)
|
|
|
(8,486
|
)
|
|
|
1,957
|
|
|
|
87,328
|
|
Construction in progress
|
|
|
18,007
|
|
|
|
52,864
|
|
|
|
—
|
|
|
|
(65,905
|
)
|
|
|
5,784
|
|
|
|
10,750
|
|
Total
|
|
|
19,622,225
|
|
|
|
1,839,401
|
|
|
|
(31,643
|
)
|
|
|
6,603
|
|
|
|
388,668
|
|
|
|
21,825,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunication licenses
|
|
|
2,948,235
|
|
|
|
467,548
|
|
|
|
(14,214
|
)
|
|
|
—
|
|
|
|
63,148
|
|
|
|
3,464,717
|
|
Computer software
|
|
|
5,481,895
|
|
|
|
540,741
|
|
|
|
(13,285
|
)
|
|
|
7,228
|
|
|
|
52,146
|
|
|
|
6,068,725
|
|
Transmission line software
|
|
|
67,017
|
|
|
|
3,448
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
70,465
|
|
Central betting system operating right
|
|
|
12,074
|
|
|
|
226
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,300
|
|
Indefeasible right of usage
|
|
|
31,855
|
|
|
|
6,424
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
38,279
|
|
Brand name
|
|
|
7,040
|
|
|
|
11
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,051
|
|
Customer base
|
|
|
12,211
|
|
|
|
328
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,539
|
|
Subscriber acquisition cost
|
|
|
974,200
|
|
|
|
349,049
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,295
|
|
|
|
1,334,544
|
|
Other
|
|
|
37,526
|
|
|
|
19,956
|
|
|
|
(59
|
)
|
|
|
(7,393
|
)
|
|
|
1,339
|
|
|
|
51,369
|
|
Total
|
|
|
9,572,053
|
|
|
|
1,387,731
|
|
|
|
(27,558
|
)
|
|
|
(165
|
)
|
|
|
127,928
|
|
|
|
11,059,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
10,050,172
|
|
|
|
451,670
|
|
|
|
(4,085
|
)
|
|
|
6,768
|
|
|
|
260,740
|
|
|
|
10,765,265
|
|
Amortization expense on intangible
assets other than goodwill for the nine and three months ended 30 September 2019 amounting to TL 1,387,731 and 457,695 including
impairment losses are recognized in cost of revenues.
There is no impairment losses
on intangible assets recognized for the nine months ended 30 September 2019.
Computer software includes internally generated capitalized software
development costs that meet the definition of an intangible asset. The amount of internally generated computer software is TL141,978
and TL 60,888 respectively, for the nine months and three months ended 30 September 2019.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
Closing balances
of right of use assets as of 1 January and 30 September 2019 and depreciation and amortization expenses for the period ended 30
September 2019 is stated as below:
|
|
Site Rent
|
|
Building
|
|
Network equipment
|
|
Right of way
|
|
License
|
|
Other
|
|
Total
|
Balance at 1 January 2019
|
|
|
1,021,638
|
|
|
|
135,158
|
|
|
|
50,538
|
|
|
|
8,643
|
|
|
|
323,742
|
|
|
|
109,883
|
|
|
|
1,649,602
|
|
Depreciation and amortization charge for the year
|
|
|
(372,378
|
)
|
|
|
(41,216
|
)
|
|
|
(116,371
|
)
|
|
|
(3,806
|
)
|
|
|
(33,670
|
)
|
|
|
(106,771
|
)
|
|
|
(674,212
|
)
|
Balance at 30 September 2019
|
|
|
1,045,090
|
|
|
|
103,573
|
|
|
|
107,504
|
|
|
|
16,849
|
|
|
|
368,728
|
|
|
|
166,155
|
|
|
|
1,807,899
|
|
As
at 30 September 2019, additions to right of use assets amount to TL 920,799 and interest expense for the nine and three months
ended 30 September on lease liabilities is TL 212,147 and TL 77,455.
Depreciation
expense for the nine and three months ended 30 September 2019 amounting to TL 674,212 and 195,462 are recognized in cost of revenues.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
12.
|
Asset held for sale and discontinued operations
|
In 2016,
the Group has committed to plan to exit from Fintur operations in relevant jurisdictions and initiated an active program to
locate a buyer for its associate. In this regard, Fintur has been classified as held for sale and reported as discontinued
operation starting from 1 October 2016.
Equity accounting
for Fintur ceased starting from 1 October 2016, and in accordance with IFRS 5, Fintur has been measured at the lower of carrying
amount and fair value less costs to sell.
The
delay during 2018 in the sales process was caused by events and circumstances beyond the Company’s control.
Fintur,
has transferred its total shareholding in Azertel Telekomunikasyon Yatırım Dış Ticaret A.Ş. (“Azertel”)
to Azerbaijan International Telecom LLC (“Azintelecom”) at the price of EUR 221,687 on 5 March 2018. The signing of definitive agreement, the transfer of shares to Azintelecom and the transfer of proceeds
to Fintur were completed simultaneously.
Fintur has completed the transfer of
all its shares in Geocell LLC to Silknet JSC on 20 March 2018, a joint stock company organized under the laws of Georgia, for a total consideration of USD 153,000 upon receiving
the necessary regulatory approvals.
Fintur, has transferred its total shareholding
in Kcell JSC to Kazakhtelecom JSC (“Kazakhtelecom”), established in Kazakhstan, a fixed line operator controlled by
the government of the Republic of Kazakhstan through sovereign wealth fund Samruk-Kazyna for a total consideration of USD 302,571.
The definitive agreement has been signed on 12 December 2018. The transfer of shares to Kazakhtelecom and the transfer of proceeds
to Fintur were completed simultaneously on 21 December 2018.
The Company has signed the
definitive agreement on 12 December 2018 to transfer its total shareholding in Fintur to other shareholder of Fintur, Sonera
Holding B.V. (“Sonera Holding”). Transfer to Sonera Holding and the transfer of proceeds completed on 2 April
2019 subsequent to obtainment of regulatory approvals on 29 March 2019. The final value of the transaction is realized as TL
2,229,595 (EUR 352,851). The share transfer have been completed within the nine months period ended 30 September 2019,
gain on sale of the associate, amounting to TL 772,436 has been recognized under profit from discounting operations in the
condensed consolidated interim financial statements.
Reconciliation
of Fintur sales for the period ended 30 September 2019 is stated as below:
|
|
30
September 2019
|
Consideration received or receivable:
|
|
|
|
|
Cash
|
|
|
2,229,595
|
|
Total
disposal consideration
|
|
|
2,229,595
|
|
Carrying amount of net
assets sold
|
|
|
(1,825,292
|
)
|
Gain
on sale before income tax and reclassification of foreign currency translation reserve
|
|
|
404,303
|
|
Reclassification of foreign currency translation
reserve
|
|
|
368,133
|
|
Income tax expense on
gain
|
|
|
—
|
|
Gain
on sale after income tax
|
|
|
772,436
|
|
Subsequent to recognition of Fintur disposal
for the nine months period ended 30 September 2019, Turkcell has recognized compensation expense, which has been paid on 23 July
2019 according to Kcell Share Purchase Agreement amounting to TL 59,224 (USD 10,448).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
Dividends
Turkcell:
On 12 September 2019, the Company’s
General Assembly has approved a dividend distribution for the year ended 31
December 2018 amounting to TL 1,010,000; this represents a gross
cash dividend of full TL 0.45909 per share. The dividend will be paid on 31 October 2019 to the shareholders.
Azerinteltek:
According to the two resolution of
the General Assembly Meeting of Azerinteltek within 2018, shareholders decided to pay dividend amounting to AZN 5,959 (TL 13,103)
from the profit realized for the last quarter of 2017 dividend payment was made in 2018. The share purchase agreement of Azerinteltek
was signed on 15 November 2018 and the transfer of proceeds to Inteltek was completed on 27 December 2018. Group have lost the
control over the subsidiary unconditionally on 27 December 2018 with transfer of money. The transfer of shares to Baltech was completed
subsequently on 11 January 2019.
Inteltek:
According to the resolution
of the Ordinary General Assembly Meeting of Inteltek dated 15 March 2019, the shareholders resolved to pay a dividend amount equal
to TL 232,875 out of profits for the year ended 31 December 2018 and a dividend out legal reserves amount equal to TL 9,742. The
aggregate amount of dividends has been paid on April 2019.
According to Board of Directors Resolution
of Inteltek dated 16 October 2019 the advanced dividend payment has been made in 17 October 2019 amounting to TL 35,220 for the
first six months of 2019 profit.
Net investment hedges
in a foreign operation:
Turkcell, designated some portion
of its EUR denominated bank loans as hedging instrument in order to hedge the foreign currency risk arising from the translation
of net assets of some of its subsidiaries operating in Europe from EUR to TL. Net foreign exchange losses after tax accounted for
under “gains/ (losses) on hedges of net investments in foreign operations” in the statement of other comprehensive
income of 2019 amounted to TL 10,779 (2018: None).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
14. Loans
and borrowings
|
|
30
September
2019
|
|
31
December
2018
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Unsecured bank
loans
|
|
|
6,590,932
|
|
|
|
7,244,992
|
|
Secured bank loans
|
|
|
1,072
|
|
|
|
1,862
|
|
Lease liabilities
|
|
|
1,069,012
|
|
|
|
1,026,955
|
|
Debt
securities issued
|
|
|
5,242,895
|
|
|
|
4,845,827
|
|
|
|
|
12,903,911
|
|
|
|
13,119,636
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Unsecured bank loans
|
|
|
6,901,105
|
|
|
|
6,281,855
|
|
Secured bank loans
|
|
|
1,847
|
|
|
|
2,318
|
|
Lease liabilities
|
|
|
474,970
|
|
|
|
387,001
|
|
Debt
securities issued
|
|
|
393,339
|
|
|
|
364,735
|
|
|
|
|
7,771,261
|
|
|
|
7,035,909
|
|
As at 30 September
2019, the Company has utilized, USD 225,000 (equivalent to TL 1,273,298 as at 30 September 2019) and EUR 35,000 comparatively, under loan agreement signed with China Development Bank (CDB).
The annual interest rates of the USD
and EUR denominated loans utilized as part of the EUR 750,000 loan agreement between the Company and China Development Bank (CDB),
which were LIBOR + 2.22% and EURIBOR + 2.20%, have been revised as LIBOR + 2.17% and EURIBOR + 2.15%, respectively. The updated
rates are effective as of 10 April 2019. There have been no changes to the maturity or the repayment terms of the loan.
The Company
signed a loan agreement of USD 150,000 with J.P.Morgan Chase Bank N.A., London Branch and AB Svensk Exportkredit within the framework
of the insurance of the Swedish Export Credit Agency (EKN). The availability period of the loan is until April 2021, to be utilized
in three equal tranches each with a maturity of 10 years. The total annual cost of the loan is LIBOR+2.1% for the first tranche
and fixed 5.4% for the second and third tranches. As at 30 September 2019, the Company has utilized USD 50,000 under this agreement.
The Company
signed a loan agreement of EUR 50,000 with BNP Paribas Fortis SA/NV for general corporate purposes. The respective loan has a maturity
of 3 years and 1 week and its annual cost of funding is in Euribor+2.05% - 1.85% range. Cost of funding can potentially decline
to Euribor+1.85% subject to meeting sustainability based environmental objectives set as part of the loan agreement. These objectives
include recycling of electronic waste, use of solar energy for electricity consumption and reducing paper consumption through increased
use of Dergilik application. As of 30 September 2019 the Company has utilized EUR 50,000 under this agreement.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
14. Loans
and borrowings (continued)
Within the
scope of buy-back decisions on 27 July 2016 and 30 January 2017, the Company purchased their debt securities issued with a total
nominal value of USD 10,000 as at 30 September 2019.
In the year 2019, the Company has taken CMB
approval on issuance of management agreement based lease certificates in accordance with capital markets legislation in the domestic
market, in Turkish Lira terms, at an amount of up to TL 500,000, on various dates and at various amounts without public offering,
as private placement and/or to be sold to institutional investors. As at 14 June 2019, the company has issued management agreement
based lease certificates through Halk Yatırım amounting TL 75,000 with the maturity of 8 October 2019.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
14.
|
Loans and borrowings (continued)
|
Terms and conditions of outstanding
loans are as follows:
|
|
|
|
|
30
September 2019
|
|
31
December 2018
|
|
Currency
|
|
Interest
rate
type
|
|
Nominal
interest rate
|
|
Payment
period
|
|
Carrying
amount
|
|
Nominal
interest
Rate
|
|
Payment
period
|
|
Carrying
amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured
bank loans
|
USD
|
|
Floating
|
|
Libor+1.5%-Libor+2.2%
|
|
2020-2028
|
|
4,904,251
|
|
Libor+2.0%-Libor+4.1%
|
|
2019-2026
|
|
4,589,157
|
Unsecured
bank loans
|
EUR
|
|
Floating
|
|
Euribor+1.2%-Euribor+2.2%
|
|
2019-2026
|
|
6,167,304
|
|
Euribor+1.2%-Euribor+3.4%
|
|
2019-2026
|
|
6,975,890
|
Unsecured
bank loans
|
TL
|
|
Fixed
|
|
13.3%-14.9%
|
|
2019
|
|
905,677
|
|
12.6%-25.0%
|
|
2019
|
|
873,914
|
Unsecured
bank loans
|
UAH
|
|
Fixed
|
|
16.3%-19.5%
|
|
2019
|
|
1,063,351
|
|
21.5%-22.5%
|
|
2019
|
|
894,511
|
Unsecured
bank loans
|
RMB
|
|
Fixed
|
|
5.5%
|
|
2026
|
|
203,507
|
|
5.5%
|
|
2019-2026
|
|
193,375
|
Unsecured
bank loans
|
EUR
|
|
Fixed
|
|
1.0%
|
|
2019
|
|
247,948
|
|
-
|
|
-
|
|
-
|
Secured
bank loans (*)
|
BYN
|
|
Fixed
|
|
11.5%
|
|
2020
|
|
2,918
|
|
12.0%-16.0%
|
|
2019-2020
|
|
4,180
|
Debt
securities issued
|
USD
|
|
Fixed
|
|
5.8%
|
|
2025-2028
|
|
5,555,988
|
|
5.8%
|
|
2019-2028
|
|
5,135,565
|
Debt
securities issued
|
TL
|
|
Fixed
|
|
23.7%
|
|
2019
|
|
80,246
|
|
24.5%
|
|
2019
|
|
74,997
|
Lease
liabilities
|
EUR
|
|
Fixed
|
|
1.0%-6.75%
|
|
2019-2031
|
|
160,408
|
|
1.0%-7.9%
|
|
2019-2031
|
|
194,645
|
Lease
liabilities
|
TL
|
|
Fixed
|
|
15.0%-45.0%
|
|
2019-2064
|
|
783,458
|
|
16.1%-45.0%
|
|
2019-2048
|
|
719,718
|
Lease
liabilities
|
USD
|
|
Fixed
|
|
4.0%-10.5%
|
|
2019-2052
|
|
18,427
|
|
3.9%-10.8%
|
|
2019-2027
|
|
40,351
|
Lease
liabilities
|
UAH
|
|
Fixed
|
|
16.1%-24.0%
|
|
2019-2068
|
|
486,262
|
|
16.6%-24.0%
|
|
2019-2067
|
|
418,390
|
Lease
liabilities
|
BYN
|
|
Fixed
|
|
13.0%-15.0%
|
|
2019-2024
|
|
95,427
|
|
12.0%-15.0%
|
|
2019-2028
|
|
40,852
|
|
|
|
|
|
|
|
|
|
20,675,172
|
|
|
|
|
|
20,155,545
|
(*) Belarusian Telecom pledged its certain property, plant and equipment
to secure these bank loans, Also, these bank loans are secured by the Government of the Republic of Belarus.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments
|
Fair value of derivative financial instruments
at 30 September 2019 and 31 December 2018 are attributable to the following:
|
|
30 September 2019
|
|
31 December 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
Liabilities
|
|
|
|
Assets
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for trading
|
|
|
414,159
|
|
|
|
116,279
|
|
|
|
709,617
|
|
|
|
131,097
|
|
Derivatives used for hedging
|
|
|
608,366
|
|
|
|
—
|
|
|
|
730,924
|
|
|
|
—
|
|
Total
|
|
|
1,022,525
|
|
|
|
116,279
|
|
|
|
1,440,541
|
|
|
|
131,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 September 2019, total held for trading
derivative financial assets also include net accrued interest expense of TL 165,940 (31 December 2018: TL 84,479) and total held
for trading derivative financial liabilities include net accrued interest expense of TL 41,058 (31 December 2018: TL 34,168).
Derivatives used for hedging
Participating cross currency swap
and cross currency swap contracts
The notional amount and the fair value
of participating cross currency swap and cross currency swap contracts for hedging purposes at 30 September 2019 are as follows:
As at 30 September 2019
|
|
|
Sell
|
|
Buy
|
|
|
Currency
|
Notional amount
|
Currency
|
Notional amount
|
Fair Value
|
Maturity
|
|
|
|
|
|
|
|
Participating cross currency swap contracts
|
|
|
|
TL
|
1,960,140
|
|
EUR
|
466,700
|
168,033
|
23 October 2025
|
TL
|
275,850
|
|
EUR
|
60,000
|
9,628
|
22 April 2026
|
TL
|
217,500
|
|
USD
|
75,000
|
142,985
|
16 September 2020
|
TL
|
146,750
|
|
USD
|
50,000
|
93,348
|
16 September 2020
|
TL
|
97,000
|
|
USD
|
25,000
|
38,696
|
16 September 2020
|
TL
|
193,250
|
|
USD
|
50,000
|
78,124
|
16 September 2020
|
TL
|
263,500
|
|
USD
|
50,000
|
8,165
|
22 April 2026
|
TL
|
91,700
|
|
USD
|
20,000
|
23,247
|
22 April 2026
|
Cross currency swap contracts
|
|
|
|
TL
|
123,878
|
|
RMB
|
202,600
|
46,140
|
22 April 2026
|
Derivatives used for hedge accounting financial assets
|
608,366
|
|
EUR 526,700 participating cross currency
swap contracts includes TL 685,019 guarantees after CSA agreement (31 December 2018: TL 690,146).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments (continued)
|
Held for trading
Currency swap, cross currency swap,
interest swap and participating cross currency swap contracts (continued)
The notional amount and the fair value
of currency swap, interest swap, participating cross currency swap and cross currency swap contracts for trading purposes at 30
September 2019 are as follows:
As at 30 September 2019
|
|
|
Sell
|
|
Buy
|
|
|
Currency
|
Notional amount
|
|
Currency
|
Notional amount
|
Fair Value
|
Maturity
|
|
|
|
|
|
|
|
Cross currency swap contracts
|
|
|
|
TL
|
242,873
|
|
USD
|
70,500
|
162,709
|
16 September 2020
|
TL
|
269,451
|
|
USD
|
70,500
|
132,685
|
22 December 2019
|
TL
|
97,997
|
|
EUR
|
21,500
|
35,478
|
19 December 2020
|
TL
|
84,224
|
|
EUR
|
15,040
|
3,840
|
23 September 2021
|
|
|
|
|
|
|
|
Participating cross currency swap contracts
|
|
|
|
TL
|
185,100
|
|
EUR
|
30,000
|
3,232
|
22 April 2026
|
TL
|
183,300
|
|
EUR
|
30,000
|
14,550
|
22 April 2026
|
TL
|
244,000
|
|
EUR
|
40,000
|
115
|
22 April 2026
|
TL
|
280,600
|
|
USD
|
50,000
|
6,073
|
22 April 2026
|
TL
|
116,080
|
|
USD
|
20,000
|
1,009
|
22 April 2026
|
TL
|
144,688
|
|
USD
|
25,000
|
1,816
|
22 April 2026
|
TL
|
199,325
|
|
USD
|
35,000
|
5,812
|
22 April 2026
|
Interest swap contracts
|
|
|
|
USD
|
164,850
|
|
USD
|
165,210
|
157
|
30 October 2019
|
USD
|
192,325
|
|
USD
|
192,729
|
170
|
30 October 2019
|
USD
|
109,340
|
|
USD
|
109,348
|
-
|
2 October 2019
|
USD
|
95,117
|
|
USD
|
95,214
|
22
|
15 October 2019
|
USD
|
49,199
|
|
USD
|
49,248
|
7
|
15 October 2019
|
EUR
|
94,000
|
|
USD
|
104,434
|
11,437
|
1 October 2019
|
EUR
|
85,000
|
|
USD
|
93,483
|
3,699
|
1 October 2019
|
EUR
|
50,000
|
|
USD
|
54,975
|
2,091
|
1 October 2019
|
EUR
|
98,000
|
|
USD
|
107,761
|
4,140
|
1 October 2019
|
EUR
|
87,000
|
|
USD
|
95,670
|
3,692
|
1 October 2019
|
EUR
|
100,000
|
|
USD
|
110,020
|
4,469
|
1 October 2019
|
EUR
|
50,000
|
|
USD
|
54,980
|
2,062
|
1 October 2019
|
EUR
|
175,000
|
|
USD
|
192,448
|
7,210
|
2 October 2019
|
EUR
|
45,000
|
|
USD
|
49,500
|
1,948
|
1 October 2019
|
EUR
|
150,000
|
|
USD
|
164,850
|
5,721
|
1 October 2019
|
|
|
|
|
Total Held for trading derivative financial assets
|
414,144
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments (continued)
|
Held for trading (continued)
Currency swap, cross currency swap,
interest swap and participating cross currency swap contracts (continued)
As at 30 September 2019
|
|
|
Sell
|
|
Buy
|
|
|
Currency
|
Notional amount
|
|
Currency
|
Notional amount
|
Fair Value
|
Maturity
|
|
|
|
|
|
|
|
Cross currency swap contracts
|
|
|
|
TL
|
38,374
|
|
RMB
|
48,489
|
(470)
|
22 April 2026
|
TL
|
95,040
|
|
EUR
|
14,400
|
(18,902)
|
23 September 2021
|
TL
|
130,488
|
|
USD
|
24,000
|
(9,969)
|
20 March 2023
|
TL
|
6,231
|
|
EUR
|
1,000
|
(141)
|
19 December 2019
|
TL
|
141,408
|
|
USD
|
24,000
|
(8,542)
|
19 December 2019
|
TL
|
264,200
|
|
EUR
|
40,000
|
(18,454)
|
04 November 2019
|
|
|
|
|
|
|
|
Interest swap contracts
|
|
|
|
USD
|
100,000
|
|
USD
|
100,000
|
(11,441)
|
22 April 2026
|
USD
|
50,000
|
|
USD
|
50,000
|
(4,902)
|
22 April 2026
|
USD
|
40,000
|
|
USD
|
40,000
|
(2,366)
|
22 April 2026
|
USD
|
35,000
|
|
USD
|
35,000
|
(2,075)
|
22 April 2026
|
|
|
|
|
|
|
|
Participating cross currency swap contracts
|
|
|
|
TL
|
116,280
|
|
EUR
|
18,000
|
(3,560)
|
16 September 2020
|
TL
|
174,150
|
|
USD
|
30,000
|
(9,677)
|
22 April 2026
|
TL
|
261,000
|
|
USD
|
45,000
|
(6,347)
|
15 June 2020
|
TL
|
113,400
|
|
USD
|
20,000
|
(18,264)
|
22 April 2026
|
|
|
|
|
|
|
|
Total Held for trading derivative financial liabilities
|
(115,110)
|
|
|
|
|
|
|
|
|
|
Currency forward contracts
The notional amount and the fair value
of currency forward contracts for trading purposes at
30 September 2019 are as follows:
Buy
|
|
|
|
Currency
|
Notional amount
|
|
Fair Value
|
Maturity
|
USD
|
1,500
|
|
15
|
1 October 2019
|
Total Held for trading derivative financial assets
|
15
|
|
Buy
|
|
|
|
|
Currency
|
Notional amount
|
|
Fair Value
|
Maturity
|
|
USD
|
695
|
|
(354)
|
31 October2019
|
|
USD
|
654
|
|
(354)
|
30 November 2019
|
|
USD
|
795
|
|
(461)
|
31 December 2019
|
|
Total Held for trading derivative financial liabilities
|
(1,169)
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments (continued)
|
Fair value of derivative instruments and
risk management
This section explains the judgements
and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value in
the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group
has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each
level is as follows:
• Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other
than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level
3 inputs are unobservable inputs for the asset or liability.
|
Fair values
|
|
|
|
30
September 2019
|
|
31
December 2018
|
|
Fair Value
hierarchy
|
|
Valuation Techniques
|
|
|
|
|
|
|
|
|
a)Participating cross currency swap contracts (*)
|
556,985
|
|
653,142
|
|
Level 3
|
|
Pricing models based on discounted cash Present value of the estimated future cash flows based on unobservable yield curves and end period FX rates
|
-Held for trading
|
(5,241)
|
|
(24,199)
|
|
|
|
|
-Derivatives used for hedging
|
562,226
|
|
677,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b)Cross
currency swap, FX swap, Interest swap and option contracts
|
350,415
|
|
656,302
|
|
Level 2
|
|
Present value of the estimated future cash flows based on observable yield curves and end period FX rates
|
-Held for trading
|
304,275
|
|
602,719
|
|
|
|
|
-Derivatives used for hedging
|
46,140
|
|
53,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c)Currency forward contracts
|
(1,154)
|
|
-
|
|
Level 2
|
|
Forward exchange rates at the balance sheet date
|
-Held for trading
|
(1,154)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)Since bid-ask spread is unobservable input;
in valuation of participating cross currency swap contracts, prices in bid- ask price range which were considered the most appropriate
were used instead of mid prices. If mid prices were used in the valuation the fair value of participating cross currency swap contracts
would have been TL 106,465 lower as at 30 September 2019 (31 December 2018: TL 123,995).
There were no transfers between fair value
hierarchy levels during the year.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments (continued)
|
Fair value of derivative instruments and
risk management (continued)
The following table presents the
Group’s financial assets and financial liabilities measured and recognised at fair value at 30 September 2019 and 31 December 2018 on a hedge accounting basis:
Currency
|
|
Nominal
Value
|
|
Maturity
Date
|
|
30
September
2019
|
|
31 December
2018
|
|
Fair Value
hierarchy
|
|
Hedge
Ratio
|
Participating cross currency swap contracts
|
|
|
|
|
|
|
|
|
EUR Contracts
|
|
466,700
|
|
23 October 2025
|
|
168,033
|
|
208,462
|
|
Level 3
|
|
1:1
|
EUR Contracts
|
|
60,000
|
|
22 April 2026
|
|
9,628
|
|
64,670
|
|
Level 3
|
|
1:1
|
USD Contracts
|
|
200,000
|
|
16 September 2020
|
|
353,153
|
|
394,975
|
|
Level 3
|
|
1:1
|
USD Contracts
|
|
20,000
|
|
22 April 2026
|
|
23,247
|
|
9,234
|
|
Level 3
|
|
1:1
|
USD Contracts
|
|
50,000
|
|
22 April 2026
|
|
8,165
|
|
-
|
|
Level 3
|
|
1:1
|
Cross currency swap contracts
|
|
|
|
|
|
|
|
|
CNY Contracts
|
|
202,600
|
|
22 April 2026
|
|
46,140
|
|
53,583
|
|
Level 2
|
|
1:1
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
15.
|
Derivative financial instruments (continued)
|
Fair value of derivative instruments and
risk management (continued)
Movements in the participating cross currency
swap contracts for the years ended 30 September 2019 is stated below:
|
|
30 September 2019
|
Opening balance
|
|
|
653,142
|
|
Cash flow effect
|
|
|
(221,867
|
)
|
Total gain/loss:
|
|
|
|
|
Gains recognized in profit or loss
|
|
|
125,710
|
|
Closing balance
|
|
|
556,985
|
|
Net off / Offset
The Company signed a Credit Support Annex
(CSA) against default risk of the parties in respect of a EUR 466,700 participating cross currency swap transaction executed on
15 July 2016 and restructured respectively on 26 May 2017 and 9 August 2018. Additionally, in the 25 June 2019, The Company signed
a new CSA to EUR 60,000 participating cross currency swap transaction. As per the CSA, the swap’s current (mark-to-market)
value will be determined on the 10th and 24th calendar day of each calendar month and if the mark-to-market value is positive and
exceeds a certain threshold, the bank will be posting cash collateral to the Company which will be equal to an amount exceeding
the threshold (i.e. if the mark-to-market value is negative, the Company would be required to post collateral to the bank by an
amount exceeding the threshold).
With respect
to the valuations on a bi-weekly basis, a transfer will take place between the parties only if the mark-to-market value changes
by at least EUR 1,000. Following the execution of CSA, the bank transferred EUR 205,129 as collateral to the Company (30 September
2019: TL 1,268,436) which was the amount exceeding the threshold (EUR 10,000) and the Company transferred EUR 94,349 as collateral
to the bank (30 September 2019: TL 583,416) which was the amount exceeding the threshold (EUR 10,000). The Company clarified this with the derivative assets included in the statement
of financial position because it has the legal right to offset the collateral amount TL 685,019 that it recognizes under the borrowings
and intends to pay according to the net fair value. This amount was netted from the borrowings and deducted from the derivative
instruments in the balance sheet. As of 30 September 2019, if this transaction was not conducted, derivative financial instruments
assets would have been TL 1,541,604 and current borrowings would have been TL 8,456,280.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
16.
|
Financial instruments
|
Impairment
losses
Movements in the provision for impairment
of trade receivables and due from related parties are as follows:
|
|
30
September 2019
Contract
Asset
|
|
30
September 2019
Other Asset
|
Opening balance
|
|
|
7,370
|
|
|
|
730,069
|
|
Provision for impairment recognized during
the year
|
|
|
1,315
|
|
|
|
221,850
|
|
Amounts collected
|
|
|
—
|
|
|
|
(92,873
|
)
|
Receivables written off during the year as
uncollectible
|
|
|
—
|
|
|
|
(96,119
|
)
|
Transfer
|
|
|
(3,785
|
)
|
|
|
3,785
|
|
Exchange differences
|
|
|
—
|
|
|
|
6,812
|
|
Closing balance
|
|
|
4,900
|
|
|
|
773,524
|
|
Movements in the provision for impairment
of receivables from financial services are as follows:
|
|
30
September
2019
|
Opening balance
|
|
|
201,015
|
|
Provision for impairment recognized during
the year
|
|
|
181,810
|
|
Amounts collected
|
|
|
(94,585
|
)
|
Receivables written off
during the year as uncollectible
|
|
|
(79,545
|
)
|
Closing balance
|
|
|
208,695
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
16.
|
Financial instruments (continued)
|
Foreign
exchange risk
The Group’s exposure to foreign
exchange risk at the end of the reporting period, based on notional amounts, was as follows:
|
|
30 September 2019
|
|
|
USD
|
|
EUR
|
|
RMB
|
Foreign currency denominated assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current assets
|
|
|
307
|
|
|
|
11
|
|
|
|
—
|
|
Financial asset at fair value through other comprehensive income
|
|
|
1,343
|
|
|
|
30,587
|
|
|
|
—
|
|
Due from related parties-current
|
|
|
641
|
|
|
|
45
|
|
|
|
—
|
|
Trade receivables and contract assets
|
|
|
22,213
|
|
|
|
44,643
|
|
|
|
—
|
|
Other current assets
|
|
|
13,046
|
|
|
|
8,916
|
|
|
|
—
|
|
Cash and cash equivalents
|
|
|
300,016
|
|
|
|
1,218,326
|
|
|
|
—
|
|
|
|
|
337,566
|
|
|
|
1,302,528
|
|
|
|
—
|
|
Foreign currency denominated liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings-non current
|
|
|
(450,776
|
)
|
|
|
(626,339
|
)
|
|
|
(211,356
|
)
|
Debt securities issued-non- current
|
|
|
(926,454
|
)
|
|
|
—
|
|
|
|
—
|
|
Lease obligations-non-current
|
|
|
(2,375
|
)
|
|
|
(20,123
|
)
|
|
|
—
|
|
Other non-current liabilities
|
|
|
(76,131
|
)
|
|
|
—
|
|
|
|
—
|
|
Loans and borrowings-current
|
|
|
(415,836
|
)
|
|
|
(513,929
|
)
|
|
|
(46,337
|
)
|
Debt securities issued-current
|
|
|
(55,326
|
)
|
|
|
—
|
|
|
|
—
|
|
Lease obligations-current
|
|
|
(881
|
)
|
|
|
(5,783
|
)
|
|
|
—
|
|
Trade and other payables-current
|
|
|
(123,243
|
)
|
|
|
(25,429
|
)
|
|
|
(22,929
|
)
|
Due to related parties
|
|
|
(875
|
)
|
|
|
(99
|
)
|
|
|
—
|
|
|
|
|
(2,051,897
|
)
|
|
|
(1,191,702
|
)
|
|
|
(280,622
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans defined as hedgeing instruments (*)
|
|
|
—
|
|
|
|
120,512
|
|
|
|
—
|
|
Exposure related to derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
Participating cross currency swap and FX swap contracts
|
|
|
1,762,486
|
|
|
|
(197,360
|
)
|
|
|
251,089
|
|
Net exposure
|
|
|
48,155
|
|
|
|
33,978
|
|
|
|
(29,533
|
)
|
(*) Turkcell, main partner
of the Group, designated EUR 120,512 of bank loan, as hedging instruments in order to hedge the foreign currency risk arising
from the translation of net assets of the subsidiaries operating in Europe from EUR to Turkish Lira. Foreign exchange gains/losses
of the related loans are recognised under equity as “gains/(losses) on net investment hedges” in order to offset the
foreign exchange gains/(losses) arising from the translation of the net assets of investments in foreign operations to Turkish
Lira.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
16.
|
Financial instruments (continued)
|
Foreign
exchange risk (continued)
|
|
31 December 2018
|
|
|
USD
|
|
EUR
|
|
RMB
|
Foreign currency denominated assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current assets
|
|
|
222
|
|
|
|
11
|
|
|
|
—
|
|
Financial asset at fair value through other comprehensive income
|
|
|
—
|
|
|
|
7,043
|
|
|
|
—
|
|
Due from related parties-current
|
|
|
1,965
|
|
|
|
223
|
|
|
|
—
|
|
Trade receivables and contract assets
|
|
|
15,786
|
|
|
|
52,140
|
|
|
|
—
|
|
Other current assets
|
|
|
70,710
|
|
|
|
18,977
|
|
|
|
—
|
|
Cash and cash equivalents
|
|
|
786,322
|
|
|
|
384,800
|
|
|
|
—
|
|
|
|
|
875,005
|
|
|
|
463,194
|
|
|
|
—
|
|
Foreign currency denominated liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings-non current
|
|
|
(481,438
|
)
|
|
|
(748,142
|
)
|
|
|
(224,519
|
)
|
Debt securities issued-non- current
|
|
|
(921,102
|
)
|
|
|
—
|
|
|
|
—
|
|
Lease obligations-non-current
|
|
|
(4,719
|
)
|
|
|
(24,068
|
)
|
|
|
—
|
|
Other non-current liabilities
|
|
|
(68,107
|
)
|
|
|
—
|
|
|
|
—
|
|
Loans and borrowings-current
|
|
|
(390,876
|
)
|
|
|
(523,595
|
)
|
|
|
(29,244
|
)
|
Debt securities issued-current
|
|
|
(55,074
|
)
|
|
|
—
|
|
|
|
—
|
|
Lease obligations-current
|
|
|
(2,951
|
)
|
|
|
(8,223
|
)
|
|
|
—
|
|
Trade and other payables-current
|
|
|
(233,805
|
)
|
|
|
(32,946
|
)
|
|
|
(70,553
|
)
|
Due to related parties
|
|
|
(686
|
)
|
|
|
(52
|
)
|
|
|
—
|
|
|
|
|
(2,158,758
|
)
|
|
|
(1,337,026
|
)
|
|
|
(324,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure related to derivative instruments
|
|
|
1,082,036
|
|
|
|
811,167
|
|
|
|
202,600
|
|
Net exposure
|
|
|
(201,717
|
)
|
|
|
(62,665
|
)
|
|
|
(121,716
|
)
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
16.
|
Financial instruments (continued)
|
Exposure to currency risk (continued)
Sensitivity analysis
The basis for the sensitivity analysis
to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is
composed of all assets and liabilities denominated in foreign currencies, the analysis excludes net foreign currency investments.
10% strengthening/weakening of the
TL, UAH and BYN against the following currencies at 30 September 2019 and 31 December 2018 would have increased/ (decreased) profit
or loss before by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain
constant.
Sensitivity analysis
|
30 September 2019
|
|
Profit/(Loss)
|
Equity
|
|
Appreciation of foreign currency
|
Depreciation of foreign currency
|
Appreciation of foreign currency
|
Depreciation of foreign currency
|
|
1- USD net asset/liability
|
27,251
|
(27,251)
|
-
|
-
|
2- Hedged portion of USD risk (-)
|
-
|
-
|
(5,723)
|
5,723
|
3- USD net effect (1+2)
|
27,251
|
(27,251)
|
(5,723)
|
5,723
|
|
4- EUR net asset/liability
|
21,010
|
(21,010)
|
-
|
-
|
5- Hedged portion of EUR risk (-)
|
-
|
-
|
(32,553)
|
32,553
|
6- EUR net effect (4+5)
|
21,010
|
(21,010)
|
(32,553)
|
32,553
|
|
7- Other foreign currency net asset/liability
(RMB)
|
(2,332)
|
2,332
|
-
|
-
|
8- Hedged portion of other foreign currency risk (-) (RMB)
|
-
|
-
|
(697)
|
697
|
9- Other foreign currency net effect (7+8)
|
(2,332)
|
2,332
|
(697)
|
697
|
Total (3+6+9)
|
45,929
|
(45,929)
|
(38,973)
|
38,973
|
Sensitivity analysis
|
31 December 2018
|
|
Profit/(Loss)
|
Equity
|
|
Appreciation of foreign currency
|
Depreciation of foreign currency
|
Appreciation of foreign currency
|
Depreciation of foreign currency
|
|
1- USD net asset/liability
|
(106,121)
|
106,121
|
-
|
-
|
2- Hedged portion of USD risk (-)
|
-
|
-
|
(9,596)
|
9,596
|
3- USD net effect (1+2)
|
(106,121)
|
106,121
|
(9,596)
|
9,596
|
|
4- EUR net asset/liability
|
(37,775)
|
37,775
|
-
|
-
|
5- Hedged portion of EUR risk (-)
|
-
|
-
|
(23,613)
|
23,613
|
6- EUR net effect (4+5)
|
(37,775)
|
37,775
|
(23,613)
|
23,613
|
|
7- Other foreign currency net asset/liability (RMB)
|
(9,275)
|
9,275
|
-
|
-
|
8- Hedged portion of other foreign currency risk (-) (RMB)
|
-
|
-
|
364
|
(364)
|
9- Other foreign currency net effect (7+8)
|
(9,275)
|
9,275
|
364
|
(364)
|
Total (3+6+9)
|
(153,171)
|
153,171
|
(32,845)
|
32,845
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
16.
|
Financial instruments (continued)
|
Fair values
Valuation inputs and relationships to fair
value
The following
table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurement
of contingent consideration,
|
|
Fair value at
|
|
|
|
Inputs
|
|
|
|
|
30 September
2019
|
|
31 December 2018
|
|
Unobservable
Inputs
|
|
30 September
2019
|
31 December
2018
|
|
Relationship of unobservable inputs to fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration
|
|
430,835
|
|
358,304
|
|
Risk-adjusted discount rate
|
|
8.1%
|
9.5%
|
|
A change in the discount rate by 100 bps would increase/decrease FV by TL (13,669) and TL 14,250 respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected settlement date
|
|
first quarter of 2023
|
first quarter of 2023
|
|
If expected settlement date changes by 1 year FV would increase/decrease by TL (32,368) and TL 34,898 respectively.
|
Changes in the
consideration payable in relation to acquisition of Belarusian Telecom for the years ended 30 September 2019 is stated below:
|
|
2019
|
|
Opening balance
|
|
358,304
|
|
Gains recognized in profit or loss
|
|
72,531
|
|
Closing balance
|
|
430,835
|
|
17. Guarantees and purchase
obligations
At 30 September 2019, outstanding
purchase commitments with respect to property, plant and equipment, inventory, advertising and sponsorship amount to TL 1,333,289
(31 December 2018: TL 1,353,789). Payments for these commitments will be made within 5 years.
The Group is contingently liable
in respect of letters of guarantee obtained from banks and given to public institutions and private entities, and financial guarantees
provided to subsidiaries amounting to TL 5,092,593 at 30 September 2019 (31 December 2018: TL 6,530,374).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
18. Commitments and contingencies
18.1
|
Disputes on Special Communication Tax and Value Added Tax
|
|
a)
|
Disputes on SCT for the year 2011
|
Large Tax Payers Office levied Special
Communication Tax (SCT) and tax penalty on the Company as a result of the Tax Investigation for the year 2011. The Company filed
lawsuits for the cancellation of the notification regarding the aforementioned SCT assessment. The court partially accepted and
partially rejected the cases and the parties appealed the decisions regarding the parts against them. The cases are pending at
the appeal stage. The Large Tax Payers Office has collected TL 80,355 calculated for the parts against the Company for the assessment
of the SCT for the year 2011 by offsetting the receivables of the Company from Public Administrations. While the cases are pending
before the court of appeal the Company filed application for the restructuring as per the Law no. 6736. Tax Office rejected the
application. The Company also filed a case for the cancellation of aforementioned rejection act of the Tax Office. The hearing
was held on 9 April, 2019 in this case and it is expected that the court will grant a decision.
|
b)
|
Disputes on SCT and VAT for the years 2015 and 2016
|
Turkish telecom sector players
including Turkcell has been subjected to a limited tax audit with respect from VAT and SCT for 2015 and 2016. At the end of the
tax audit process for the Company no issues to be criticized were identified for 2015. However, some of bundle offers and some
services offered by the Company are subjected to criticism by tax authority for 2016.
As of 30 September 2019, respectively
tax claims arising from SCT and VAT amounting to TL 134,537 and TL 113,367 including the principal and penalty amounts have been
notified to the Company. Administrative process has been initiated in accordance with the relevant legislation while reserving
right to take legal action.
|
c)
|
Disputes on SCT for the year 2015,2016 and 2017
|
Large Tax Payers Office levied
Special Communication Tax (SCT) and tax penalty on the Company amounting to TL 85,125 in
total, of which SCT amounting to TL 34,050 and penalty amounting to TL 51,075 based on the claim stated on Tax Investigation Reports prepared for the year 2015, that the Company should pay
Special Communication Tax over the prepaid card sales made by the distributors. Administrative
process has been initiated in accordance with the relevant legislation while reserving right to take legal action.
Tax investigation closing
minute has been signed for the year 2016 and waiting for tax investigation report. The tax investigation with respect to same transaction
for the year 2017 still ongoing.
Based on the management opinion,
an outflow of resources embodying economic benefits is deemed unlikely on aforementioned transactions, thus, no provision is recognized
in the condensed consolidated interim financial statements as at and for the period ended 30 September 2019 (31 December 2018:
None).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
18. Commitments and contingencies
(continued)
18.2
|
Disputes regarding the Law on the Protection of Competition
|
The investigation initiated by the Competition
Board with respect to the practices of the Company regarding the distributors and their dealers in the distribution network. With
this decision The Competition Board rejected the claims that Turkcell determined the resale price. But with the same decision,
The Competition Board decided to apply administrative fine on the Company amounting to TL 91,942, on the ground that Turkcell forced
its sub dealers to actual exclusivity. The Company filed a lawsuit for the stay of execution and cancellation of the aforementioned
Board decisions regarding the parts against itself. The Court rejected the case. The Company appealed the decision with the request
of the stay of the execution. The appeal process is ongoing.
Three private companies filed
a lawsuits against the Company in relation with this case claiming in total of TL 112,084 together with up to 3 times of the loss
amount to be determined by the court for its material damages by reserving its rights for surpluses allegedly. Among these cases,
in the case filed for the compensation of total TL 110,484 material damages together with compensation amounting to 3 times of
the damage and interest, the court decided to reject the case in favor of the Company, at the hearing on 12 June 2019. The reasoned
decision was notified to the Company. The plaintiff appealed the case before Regional Administrative Court. The Company replied
plaintiff’s appeal request in due time. The appeal process, before Regional Administrative Court, is pending. The other cases
are still ongoing.
On the other hand, a lawsuit was filed by a
third party, for the cancellation of the part of the aforementioned Competition Board decision, regarding the rejection of the
claims that Turkcell determined the resale price. The Council of State cancelled this part of the aforementioned Competition Board
decision. Therewith Competition Board launched a new investigation. As a result of the new investigation The Competition Board
decided to apply administrative fine amounting to TL 91,942 on the Company. The reasoned decision was received to the Company on
12 June 2019. The Company made an application to the Competition Authority for withdrawal of this decision. The Competition Authority
implicitly rejected this application. The Company filed a lawsuit against the decision and related administrative acts.
Based on the management
opinion, the probability of an outflow of resources embodying economic benefits is uncertain, thus, no provision is recognized
in the condensed consolidated interim financial statements as at and for the period ended 30 September 2019 (31 December 2018:
None).
18.3
|
Ministry of Trade Administrative Fine
|
Ministry of Trade prepared a report upon the
investigation initiated against the Company on subscriber agreements, distance contracts, value added services and commitment campaigns
including device procurement for the year 2015. The Company filed a lawsuit for the stay of execution and cancellation of the Notice
of Administrative Fine imposed by Istanbul Governorship Directorate of Commerce based to the aforementioned report of the Ministry,
amounting to TL 138,173 and the Decision of Administrative Fine of Istanbul Governorship Directorate of Commerce. The Court rejected
the stay of execution request of the Company. The Company objected to the decision, objection was rejected. The hearing was held
on 17 September, 2019. The Court accepted the case in favor of the Company and cancelled the administrative fine. The decision
is not finalized and it is possible to appeal the decision before the Regional Administrative Court.
Based on the management opinion, the probability
of an outflow of resources embodying economic benefits is uncertain, thus, no provision is recognized in the condensed consolidated
interim financial statements as at and for the period ended 30 September 2019 (31 December 2018: None).
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
18. Commitments and contingencies
(continued)
18.4
|
Other ongoing lawsuits and tax investigations
|
In addition following tax and treasury
share investigations have started in the Company: (i) for 2017 fiscal year with regard to SCT, (ii) 2018 fiscal year with regard
to SCT, Corporate Income Tax and Value Added Tax, (iii) treasury share investigation with regard to April-May-June 2019 period.
JSC Kazakhtelecom initiated arbitration
proceedings against the Company related to its acquisition of JSC Kcell shares, which was subsidiary of the Fintur. The arbitration
proceeding is in a very early stage and no monetary claim has yet been presented.
Based on the management opinion,
an outflow of resources embodying economic benefits for the cases above mentioned is deemed to be less than probable, thus,
no provision is recognized in the condensed consolidated interim financial statements as at and for the period ended 30
September 2019 (31 December 2018: None).
Due to probability of an outflow of
resources embodying economic benefits with regards to notification of Information and Communication Technologies Authority for
wireless fee related to 2018 fiscal year; based on management opinion in accordance with the relevant legislation while reserving
right to take legal action, totally TL 127,755 for 2018 and 2019 fiscal years, provision was recognized in the condensed consolidated
interim financial statements as at and for the period ended 30 September 2019.
Transactions with
key management personnel
Key management personnel comprise of
the Group’s members of the Board of Directors and chief officers.
There are no loans to key management personnel as of 30 September
2019 and 2018.
The Group provide additional benefits
to key management personnel and contribution to retirement plans based on a pre-determined ratio of compensation.
|
|
Nine months ended
|
|
Three months ended
|
|
|
30 September 2019
|
|
30 September 2018
|
|
30 September 2019
|
|
30 September 2018
|
|
|
|
|
|
|
|
|
|
Short-term benefits (*)
|
|
|
61,190
|
|
|
|
70,965
|
|
|
|
19,550
|
|
|
|
34,687
|
|
Termination benefits
|
|
|
56,702
|
|
|
|
91
|
|
|
|
4,549
|
|
|
|
41
|
|
Long-term benefits
|
|
|
423
|
|
|
|
491
|
|
|
|
163
|
|
|
|
231
|
|
|
|
|
118,315
|
|
|
|
71,547
|
|
|
|
24,262
|
|
|
|
34,959
|
|
(*) Includes share-based payment.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
19.
|
Related parties (continued)
|
Transactions with related parties
The following transactions occurred
with related parties:
|
|
|
|
|
Nine months ended
|
|
Three months ended
|
Revenues from related parties
|
|
30 September 2019
|
|
30 September 2018
|
|
30 September 2019
|
|
30 September 2018
|
Sales to Sonera Holding B.V
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from sales of discontinued operations (note 12)
|
|
|
772,436
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
Sales to Kyivstar GSM JSC (“Kyivstar”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
42,942
|
|
|
|
37,859
|
|
|
|
15,892
|
|
|
|
16,898
|
|
Sales to VimpelCom (BVI) Ltd. (“Vimpelcom”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
8,157
|
|
|
|
5,075
|
|
|
|
1,966
|
|
|
|
2,455
|
|
Sales to Telia Sonera International Carrier AB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(“Telia Sonera”) Telecommunications services
|
|
|
7,703
|
|
|
|
7,941
|
|
|
|
2,768
|
|
|
|
1,986
|
|
Sales to other related parties
|
|
|
5,499
|
|
|
|
17,751
|
|
|
|
3,070
|
|
|
|
7,865
|
|
|
|
|
836,737
|
|
|
|
68,626
|
|
|
|
23,696
|
|
|
|
29,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
Three months ended
|
Related party expenses
|
|
30 September 2019
|
|
30 September 2018
|
|
30 September 2019
|
|
30 September 2018
|
Charges from Kyivstar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
64,392
|
|
|
|
53,986
|
|
|
|
24,182
|
|
|
|
22,800
|
|
Charges from Telia Sonera
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
6,223
|
|
|
|
6,047
|
|
|
|
3,355
|
|
|
|
—
|
|
Charges from Vimpelcom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
1,778
|
|
|
|
2,751
|
|
|
|
550
|
|
|
|
959
|
|
Charges from Wind Telecomunicazioni S.P.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
|
377
|
|
|
|
3,787
|
|
|
|
103
|
|
|
|
1,583
|
|
Charges from other related parties
|
|
|
3,668
|
|
|
|
9,047
|
|
|
|
1,601
|
|
|
|
2,854
|
|
|
|
|
76,438
|
|
|
|
75,618
|
|
|
|
29,791
|
|
|
|
28,196
|
|
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
The Group’s ultimate parent
company is Turkcell Holding, Subsidiaries, associates and a joint venture of the Company as at 30 September 2019 and
31 December 2018 are as follows:
|
|
|
Effective Ownership Interest
|
Subsidiaries
|
Country of
|
|
30 September
|
31 December
|
Name
|
Incorporation
|
Business
|
2019 (%)
|
2018 (%)
|
Kibris Telekom
|
Turkish Republic of Northern Cyprus
|
Telecommunications
|
100
|
100
|
Turkcell Global Bilgi
|
Turkey
|
Customer relations and human resources management
|
100
|
100
|
Turktell
|
Turkey
|
Information technology, value
added GSM services and entertainment investments
|
100
|
100
|
Turkcell Superonline
|
Turkey
|
Telecommunications, television services and content services
|
100
|
100
|
Turkcell Satis
|
Turkey
|
Sales, delivery and digital sales services
|
100
|
100
|
Eastasia
|
Netherlands
|
Telecommunications investments
|
100
|
100
|
Turkcell Teknoloji
|
Turkey
|
Research and development
|
100
|
100
|
Global Tower
|
Turkey
|
Telecommunications infrastructure
business
|
100
|
100
|
Rehberlik
|
Turkey
|
Directory Assistance
|
100
|
100
|
Lifecell Ventures
|
Netherlands
|
Telecommunications investments
|
100
|
100
|
Beltel
|
Turkey
|
Telecommunications investments
|
100
|
100
|
Turkcell Gayrimenkul
|
Turkey
|
Property investments
|
100
|
100
|
Global LLC
|
Ukraine
|
Customer relations management
|
100
|
100
|
UkrTower
|
Ukraine
|
Telecommunications infrastructure
business
|
100
|
100
|
Turkcell Europe
|
Germany
|
Telecommunications
|
100
|
100
|
Turkcell Odeme
|
Turkey
|
Payment services and e-money
|
100
|
100
|
lifecell
|
Ukraine
|
Telecommunications
|
100
|
100
|
Turkcell Finansman
|
Turkey
|
Consumer financing services
|
100
|
100
|
Beltower
|
Republic of Belarus
|
Telecommunications Infrastructure business
|
100
|
100
|
Turkcell Enerji
|
Turkey
|
Electricity energy trade and wholesale and retail electricity sales
|
100
|
100
|
Paycell
|
Ukraine
|
Consumer financing services, payment services and e-money
|
100
|
100
|
Lifecell Digital
|
Turkish Republic of
Northern Cyprus
|
Telecommunications
|
100
|
100
|
TÖFAŞ
|
Turkey
|
Interest free consumer financing services
|
100
|
100
|
Turkcell Sigorta
|
Turkey
|
Insurance agency activities
|
100
|
100
|
Yaani Digital BV (*)
|
Netherlands
|
Internet search engine and browser services
|
100
|
-
|
Belarusian Telecom
|
Republic of Belarus
|
Telecommunications
|
80
|
80
|
Lifetech
|
Republic of Belarus
|
Information technology, programming and technical support
|
80
|
80
|
Inteltek
|
Turkey
|
Information and Entertainment Services
|
55
|
55
|
|
|
|
Effective Ownership Interest
|
Associates
|
Country of
|
|
30 September
|
31 December
|
Name
|
Incorporation
|
Business
|
2019 (%)
|
2018 (%)
|
Fintur
|
Netherlands
|
Telecommunications investments
|
-
|
41
|
Türkiye’nin Otomobili
|
Turkey
|
Electric passenger car development, production and trading activities
|
19
|
19
|
|
|
|
Effective Ownership Interest
|
Joint Venture
|
Country of
|
|
30 September
|
31 December
|
Name
|
Incorporation
|
Business
|
2019 (%)
|
2018 (%)
|
Sofra
|
Turkey
|
Meal coupons and cards
|
33
|
33
|
|
|
|
|
|
(*) On 13 May 2019, Turkcell signed a share
purchase agreement to acquire 100% of the shares of Yaani Digital BV (formerly “NTENT Netherlands BV”). The transfer
of legal shares was completed on 14 May 2019. The acquisition date on which all identifiable assets acquired and liabilities assumed
is expected to be realized in 2020. As of 30 September 2019, USD 8,850 of the aggregate consideration of USD 19,150 was paid. The
outstanding payments are expected to be completed by the end of 2020, depending on the seller’s fulfillment of its obligations
under the share purchase agreement.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at and for the nine months
ended 30 September 2019
(All
amounts disclosed in the condensed consolidated interim financial statements and notes have been rounded off to the nearest thousand
currency units and are expressed in Turkish Liras unless otherwise stated.)
None.