Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) This fall 2023 Earnings Name Transcript March 20, 2024 1:00 PM ET
Firm Members
Ozlem Yardim – IR and Company Finance Director
Ali Taha Koc – CEO
Kamil Kalyon – CFO
Convention Name Members
Cesar Tiron – Financial institution of America Merrill Lynch
Ece Mandaci – UNLU
Cemal Demirtas – Ata Make investments
Gustavo Campos – Jefferies
Nora Nagy – Erste Group Financial institution AG
Operator
Girls and gents, thanks for standing by. I am Konstantinos, your refrain name operator. Welcome and thanks for becoming a member of the Turkcell’s convention name and reside webcast to current and focus on the Turkcell’s full yr 2023 monetary outcomes. All contributors shall be in listen-only mode and the convention is being recorded. The presentation shall be adopted by question-and-answer session. [Operator Instructions] At the moment, I wish to flip the convention over to Ms. Ozlem Yardim, Investor Relations and Company Finance Director. Ms. Yardim, you could now proceed.
Ozlem Yardim
Thanks, Konstantinos. Howdy, everybody. Welcome to Turkcell’s 2023 full yr earnings name. At this time, our CEO, Ali Taha Koc and CFO, Kamil Kalyon shall be delivering a quick presentation masking operational and monetary outcomes of 2023, which shall be adopted by a Q&A session. Earlier than we start, I wish to kindly remind you to overview our protected harbor statements accessible on the finish of our presentation. Now I am handing the assembly over to Mr. Ali Taha.
Ali Taha Koc
Thanks, Ozlem. Good afternoon, everyone, and thanks for becoming a member of us immediately. Regardless of the challenges of 2023, together with numerous uncertainties and financial pressures, we stay dedicated to our purpose of pioneering the digital transformation of Turkiye and producing worth. By leveraging our technological capabilities and main the telecommunication market, we achieved strong outcomes throughout all fronts. In accordance with the IAS29 functions, we delivered double-digit actual income progress of 15% pushed by devoted worth changes over the previous two years, which has supported our pool growth as effectively. We additionally prioritized value-generating postpaid and fiber clients, increasing our subscriber base by 799,000 web additions. This prime line progress led to important operational leverage, evidenced by a exceptional 20% improve in EBITDA. Our margin expanded by 1.8 share factors to 41%, pushed by lowered vitality costs and decrease interconnection bills. In the end, our sturdy operational efficiency resulted in a exceptional web revenue of TRY12.6 billion, marking a formidable 83% year-on-year rise.
Subsequent slide, please. We efficiently achieved our steerage in 2023. In a difficult yr, we maintained our enterprise technique, prioritizing agility to successfully reply to evolving market circumstances, significantly to deal with inflationary pressures. Consequently, together with Ukraine’s financials, we recorded 75% income progress, suppressing our steerage. This sturdy efficiency additionally enabled us to exceed our EBITDA expectations. An accelerated prime line efficiency resulted in a 21% CapEx to gross sales ratio at yr finish. Moreover, investments to photo voltaic vitality and Belarus have been postponed to following yr.
Subsequent slide, please. Let’s take a better take a look at our cell operational efficiency. Because of a deal with postpaid section, we added 1.6 million postpaid clients in 2023, of which 476,000 got here within the final quarter. The pay as you go section shrank by 1.1 million subscribers yearly, primarily because of the different knowledge options. As well as, the rising value of latest line activations and clients preferring postpaid strains to repair their choices in an inflationary surroundings additionally negatively impacted the pay as you go website in 2023. Please recall that we additionally disconnected inactive pay as you go strains at yr finish, which was the primary cause for the quarterly acceleration in cell churn. In comparison with the earlier yr, our portfolio composition has turn into extra priceless. We achieved a three-point improve in post-paid share within the cell section, exceeding 71% this yr. By historic figures, blended cell ARPU grew by 85% year-on-year, due to the rational worth changes, upsell efforts, and a rising postpaid subscriber share within the portfolio. According to inflationary pricing coverage, we began the quarter with round 20% adjustment in our cell costs in October. We’ll proceed this strategy and due to this fact anticipate sustaining actual ARPU progress in 2024.
Subsequent slide please. Within the fastened broadband section, we adopted a profitability-focused strategy in ADSL and cable by prioritizing penetration within the fiber section. On the fiber entrance, we’re happy to have registered an additional 43,000 web additions on this quarter and 169,000 for the total yr of 2023, owing to an expanded footprint and a seamless, pure fiber expertise. Moreover, we’re happy to see sturdy demand for our TV providers. Regardless of larger worth changes in comparison with the data-only packages, we offer this service to 66 out of each 100 households amongst our residential fiber clients. ARPU continued to widen the unfold with inflation, rising by 76% on a yearly foundation in historic figures. This progress was pushed primarily by two elements, an increase in 12-month contract tariffs which enabled us to replicate worth will increase extra quickly and an increase within the share of upper pace tariffs from 18% to 30% in comparison with the earlier yr. As 86% of latest residential fiber clients opted for 12-month contracts within the final quarter, we anticipate the next share within the coming quarters.
Subsequent slide, please. Let’s focus on our strategic focus areas, starting with digital providers and options. Standalone income from digital providers and options grew 19% year-on-year, pushed primarily by 25% improve in digital OTT service revenues. The paid person base reached $5.6 million, primarily with TV and cloud providers. Our digital enterprise registered strong 23% year-on-year income progress. Beside the efficiency in managed providers, a 50% improve in cloud service revenues and a exceptional 61% actual progress in knowledge heart revenues supported the expansion. Amid elevated demand in areas together with knowledge facilities, cloud options, and knowledge analytics initiatives, we secured a thousand new contracts within the final quarter. Waiting for 2024, whereas TV+ and lifebox will keep their flagship place in digital providers, we are going to prioritize ramping up the capability of information facilities and cloud providers to fulfill the excessive demand in these areas.
Subsequent slide, please. Our techfin corporations continued to ship a powerful efficiency, contributing to the corporate’s prime line progress in 2023. Throughout 2023, Paycell expanded its product portfolio and strengthened its place inside the fintech verticals to higher serve buyer wants. Paycell affords providers from inventory change transactions to purchasing limits by means of Financell, and it’s taking agency steps in direction of main the Turkish fintech ecosystem. Paycell income rose 29% year-on-year, primarily fueled by the success of its direct provider enterprise Pay Later. The energetic person base of Pay Later reached $6 million, marking 19% annual progress, whereas its transaction quantity surged 80% within the final quarter. In the meantime, Financell, our financing firm, continued to steer the sector in small loans catering to the wants of Turkcell clients, additionally enjoying a major position within the enhancing the monetary inclusion in Turkey. Financell’s income grew by 28%, due to the demand for good gadgets and new areas we enter equivalent to purchasing loans, automotive loans, and inexperienced loans. Nonetheless, a major rise in rates of interest within the final quarter resulting in larger funding prices had an opposed affect on Financell’s margins.
Subsequent slide, please. Now our efficiency within the worldwide markets. Ukrainian subsidiaries have been categorized as discontinued operations as of the top of 2023 as a result of introduced gross sales course of. Turkcell worldwide revenues, which now accounts for 3% of group revenues, decreased by 1.8% to TRY2.6 billion. Base revenues rose 20% on a yearly foundation in native forex phrases, primarily pushed by larger knowledge bill revenues. The development in EBITDA margin was supported by decrease interconnection prices and vitality bills as a share of income. Revenues of our Turkish Republic of Northern Cyprus subsidiary elevated 20% year-on-year, fueled by sturdy actual ARPU progress. The introduction of 4.5G providers in September 2023 resulted in a forty five% improve in 4.5G knowledge consumption on a quarterly foundation.
Subsequent slide, please. In our pursuit of constructing the Clever Edge, we are going to deal with three key initiatives in 2024. As Turkiye’s largest knowledge heart operator, we prioritize maintaining Turkiye’s knowledge inside its borders to make sure knowledge safety and confidentiality of non-public data. So far, now we have invested EUR330 million in our knowledge facilities, which at the moment increase a capability of 33 megawatts in 4 new era knowledge facilities. Attributable to excessive demand, we plan so as to add 9.1 megawatt of latest capability this yr. Secondly, Turkcell is leveraging its capabilities in synthetic intelligence and machine studying to boost our enterprise fashions. As an illustration, our shops and the Turkcell cell software have applied AI, supported id verification processes. Moreover, now we have built-in AI into our communication channels for an improved buyer expertise. Final however not least, we stay dedicated to specializing in our state-of-the-art cell and fiber infrastructure. Our aims embrace rising fiber-to-site investments and finishing up GPON modernization for improved effectivity. We’ve additionally signed a cooperation settlement with Lynk, a non-terrestrial community supplier, to offer cell providers through satellite tv for pc in rural areas the place entry to cell networks is restricted. We proceed to take proactive steps to take care of our management place within the applied sciences of 5G and past.
Subsequent slide, please. To conclude my presentation, I wish to finish by sharing our steerage for 2024. Given the macroeconomic dynamics, projecting inflation particularly shall be a difficult process. We intention to maintain you up to date in regards to the steerage every time there’s a change in our inflation assumption. For 2024, we count on excessive single-digit actual income progress, EBITDA margin steerage of round 42%, and we count on a CapEx depth of round 23%.
I’ll now go away the ground to our CFO, Mr. Kamil Kalyon.
Kamil Kalyon
Thanks very a lot, Ali Taha. Now let’s transfer on to our monetary outcomes. Earlier than we proceed, I might like to stipulate the affect of inflationary accounting on our key monetary metrics. Group revenues ramped up by 76% in historic figures, whereas below inflationary accounting, the rise was 15%. Over the previous two years, inflation-adjusted Turkcell Turkiye revenues have outpaced the expansion of Turkcell Group revenues, driving the general progress. An increasing subscriber base and strong ARPU progress, in addition to digital providers, have been the primary drivers of this progress. EBITDA elevated by 83% on historic figures, whereas in response to inflationary accounting, progress was 20%. Other than strong prime line progress, decrease vitality costs, favorable interconnection bills, and a lower in the price of items offered as a share of revenues have been instrumental in driving actual EBITDA growth. Lastly, web earnings progress was 65% on historic figures, whereas by inflation adjusted figures, it rose 82%, due to a powerful EBITDA efficiency.
Subsequent slide, please. In 2023, EBITDA surged 20% to TRY44 billion due to a powerful prime line efficiency. Accordingly, the EBITDA margin expanded 1.8 share factors year-on-year. Regardless of a rise in private bills ensuing from two wage rises all year long, this was greater than offset by declines in the price of items offered, vitality prices, and interconnection bills. The discount in vitality costs through the second and third quarters of 2023 helps the margin. Moreover, the continued decline in MTR positively impacted our profitability, a development anticipated to persist in 2024.
Subsequent slide, please. Now, let’s dive into the web earnings efficiency. Because of a strong operational efficiency, EBITDA has contributed TRY7.3 billion to web earnings. The opposite working earnings and expense merchandise consists of the primary installment of the earthquake donation fee made in October, in addition to a provision quantity for the second installment of the donation, which was already paid in January. The steadiness sheet change as a result of inflationary changes in 2023 had a extra opposed impact in comparison with 2022, with the financial acquire loss merchandise being essentially the most important stress level for web earnings, amounting TRY4 billion. Our Ukraine operation, categorized below discontinued operations because of the ongoing gross sales course of had a optimistic affect of TRY1.1 billion on web earnings all year long 2023.
Subsequent slide, please. Let’s take a better take a look at our CapEx administration. In historic figures, the CapEx to gross sales ratio for 2023 was 20.6% with accelerated income. This yr, we maintained an equal deal with cell and stuck investments. As our CEO said, in alignment with our objectives, our investments in 2024 will primarily goal three areas. One, we are going to improve the fiber to towers, extending them to 41% of towers in Turkiye. This empowers us to advance our core functionality in providing best-in-class 4.5G providers and additional strengthen our place in 5G and future applied sciences. Second, we are going to proceed our investments in photo voltaic renewable vitality to generate electrical energy for sustainable assets and safe value benefit for the approaching years. Lastly, responding to heightened demand, we are going to develop our knowledge heart capability by developing two new modules in Corlu and Ankara, rising capability by 28%. Because of this for 2024, we anticipate higher CapEx depth.
Subsequent slide, please. Now let’s flip our consideration to the steadiness sheet. In 2023, our money place elevated by TRY7.2 billion, majorly supported by FX actions and natural money era. Our gross debt was at TRY84 billion, and we ended the yr with a web debt place of TRY24 billion. Because of sturdy money era, our web leverage decreased to 0.5 occasions. Along with the sturdy money place, now we have dedicated strains of round $120 million equal for the upcoming durations. The vast majority of our money stays denominated in arduous currencies. Excluding FX swaps, 53% of our money is in US {dollars} and 20% in euros.
Subsequent slide, please. Lastly, let’s look into the administration of the international forex threat for 2023. On the finish of 2023, our steadiness sheet had round $2 billion equal in FX monetary liabilities. Along with the $1.5 billion equal FX denominated monetary belongings, now we have a $0.6 billion efficient hedging portfolio, the overwhelming majority of which consists of future ahead and NDFs. We ended up with an extended FX place of $22 million, which is inside our impartial FX place definition.
This concludes our presentation, and we will now open the road for questions. Thanks.
Query-and-Reply Session
Operator
Girls and gents, at the moment we are going to start the question-and-answer session. [Operator Instructions] The primary query comes from the road of Cesar Tiron with Financial institution of America Merrill Lynch. Please go forward.
Cesar Tiron
Sure, hello. Good night. Congratulations on the numbers and thanks for the decision and the chance to ask questions. I’ve two questions if that is okay. If I take a look at the brand new accounting normal together with inflationary accounting and if I take a look at your steerage, there is a slowdown from what I believe you delivered in 2023, which I believe was 14% or 15% p.c, and your steerage of excessive single digit. Are you able to please clarify why excluding inflation you assume the income progress will decelerate? That is the primary one. The second query, I see a rise once more within the steerage of CapEx depth to promote. Are you able to please clarify it? Is that primarily pushed by the weakening of the forex? After which the third query, should you can please replace us on Ukraine and the sale course of and this litigation which you’ve got disclosed, I believe, one or two weeks in the past? Thanks a lot.
Kamil Kalyon
Thanks very a lot, Cesar, for the query Really as of This fall this yr, in accordance with the usual printed by the capital market e book, it is newly applied for capital market e book laws in Turkey inflation accounting normal. It’s totally new for us and earlier than getting began, I wish to lay some groundwork and spotlight few factors relating to the usual of its results on our financials. Perhaps it could be useful in your aspect. As you could already know, monetary efficiency figures for present yr are adjusted for inflation on a month-to-month foundation with an index which is particular to the associated month. Moreover, the prior yr figures are adjusted with the present yr index to replicate the change in buying energy to be able to make the figures comparable. As a result of contracted nature of [indiscernible] enterprise, the inflationary surroundings initially affected our prime line adversely in 2024 — 2022, however in fiscal yr 2023, with the assistance of sequential worth changes, now we have [indiscernible] quarters. We returned to an actual progress, reaching an actual progress of round 15% improve in our income aspect. Earlier than elaborating additional on the topic for the 2024 steerage, please be reminded that our steerage captures the anticipated impacts of the IAS29 software in addition to our operational expectations for 2024. It is a very technical situation, particularly making an assumption within the inflationary accounting perspective is a bit of bit excessive. Capital market boards of Turkey additionally insist us to make a declaration in regards to the inflation adjusted figures. Subsequently, we wish to be within the protected aspect within the first quarter at this stage in regards to the steerage aspect, particularly from the expansion aspect, however we count on a excessive single digit income progress for 2024, however our intention likely can be taking this quantity to double digits in 2024. Within the CapEx aspect, as a part of our CapEx planning this yr, we are going to proceed to focus extra on our core companies in response to the place we are going to comply with our demand-driven CapEx strategy. We’re increasing the broad area capability of information facilities by including new modules to fulfill rising demand as a result of there’s a massive demand within the knowledge heart providers in Turkey. Subsequently, we wish to hold going to make investments within the knowledge heart aspect. That is the primary situation, which the depth is excessive in 2024. Moreover, now we have renewable vitality funding plans, as you recognize, on the vitality aspect to fulfill our personal electrical energy demand. In 2023, we initiated investments in solar energy plant installations to realize a capability of 300 megawatts inside three years interval. The primary section In 2023, we achieved 54 megawatt capability, and we intention to cowl 65% of our self-usage from our personal premises. Subsequently, we hold occurring making funding in photo voltaic situation in 2024. This can be the second cause for the CapEx depth aspect. All in all, cell and stuck CapEx will take greater than half of the CapEx finances, particularly on this yr additionally with the remaining share to be taken primarily by knowledge heart and renewable vitality investments could be the abstract of the CapEx depth aspect.
Ali Taha Koc
With respect to the query addressed to Ukraine, as per our firm’s Board of Administrators determination dated December 20, 2023, a shared switch settlement was signed on December 29, 2023 for the switch of all shares together with the rights and money owed of our firm’s subsidiaries working in Ukraine to NJJ capital, topic to sure circumstances decided below related settlement. As completion of the transaction is dependent upon achievement of sure closing actions, permissions granted by authorities and circumstances precedent together with elimination of non permanent injunction over the shares. In the meantime, our firm has been knowledgeable by means of the Ukrainian subsidiary that they’ve obtained an official ruling from an Ukrainian courtroom on March 5, 2024, imposing non permanent injection by means of making use of CSR over the 19.8% of the shares and associated company rights of Life-style LLC and 100% of the shares and associated company rights of Ukrtower and Paycell LLC inside the felony proceedings associated to suspicions involving Fridman. We wish to emphasize that we imagine that the aforementioned individual has no direct or oblique management or affect over Turkcell and-or Ukrainian subsidiaries. Moreover, it’s well worth the emphasis that this determination to use non permanent injunction has no any important affect on the day by day operations of those Ukrainian subsidiaries. Our Ukrainian subsidiaries already filed for an enchantment to be able to take away related non permanent injunction and dismiss of the ruling to be to the associated courtroom submitted on March 7, 2024. With an intention to cancel the [indiscernible] subsidiaries vigorously contest this determination. Our Ukrainian subsidiaries repeatedly work on completion of circumstances, precedent, together with this non permanent injunction being lifted over Ukrainian subsidiaries’ shares for the closing relating to the sale of Ukrainian belongings to NJJ Capital. The enterprise worth to be taken under consideration on the deadline for the respective gross sales transaction is decided as $525 million and the ultimate sale consideration shall be topic to changes to be made together with money and debt changes after the closing.
Cesar Tiron
Very clear.
Ali Taha Koc
Okay.
Operator
The subsequent query is from the land of Mandaci, Ece with UNLU Securities. Please go forward.
Ece Mandaci
Hello, congratulations on the sturdy outcomes. I’ve a few questions. One is about your EBITDA steerage for 2024. It seems such as you’re anticipating possibly some double-digit progress in your EBITDA in actual phrases. What’s the primary cause for that? I perceive that you will make worth changes and there shall be actual income progress, however may there be any potentialities in value saving possibly? Are you able to present extra particulars about that? And secondly, I am seeing that you’ve recorded deferred tax earnings. You additionally had final yr, is that this because of the revaluation of a few of it and can this be persevering with in 2024 as effectively? And thirdly, I see that you simply expensed some donation expense within the fourth quarter, however money move clever, this fee shall be executed within the first quarter. Is that proper? Thanks.
Kamil Kalyon
Sure, Ece. Ranging from the third query, sure, the donation is paid on January 2024, the second installment relating to the donation fee. And our EBITDA margin forecast for 2024, as you recognize, it is a very powerful surroundings in 2024 additionally for Turkey. Our full yr EBITDA margin was round 41% in 2023, which is 1.8 pp above of final yr. Nonetheless, this yr we count on a flattish margin at round 42% as a result of inflationary value pressures will proceed and the price of vitality costs shall be one of the vital necessary elements that may have an effect on our EBITDA margin. As you recognize, in 2023, the vitality prices are sponsored by the federal government aspect. Subsequently, it actually affected our EBITDA excessive margin in 2023. Nonetheless, our sturdy actual prime line progress help by our sequential worth changes. Subsequently, as you recognize, we’re all repeatedly promising our buyers to make the inflationary pricing. We proceed to do it in 2023. And likely in 2024, this inflationary sequential worth adjustment will proceed and we might intention the identical EBITDA margins in 2024. The primary query is about…
Ece Mandaci
Deferred tax earnings. Is that persevering with in 2024 as effectively and the explanation for that, should you can clarify.
Kamil Kalyon
Usually, after the inflationary adjustment aspect we is not going to make any revelation for the fastened belongings aspect within the native aspect. Subsequently it could not — there wouldn’t be any, likely can be a revelation after the inflationary accounting aspect. Subsequently now we have some tax results in 2023 coming from the donation aspect. In 2024, we don’t count on any donation-related deferred tax or [indiscernible] foundation impact in 2024 within the deferred tax aspect.
Ece Mandaci
Simply to comply with up in your EBITDA margin information, do you take into account any extra improve in minimal wage within the second half or improve in private bills within the second half of the yr?
Kamil Kalyon
No. Our macro mannequin doesn’t embrace a second improve within the minimal wage earnings. We’ll see after the — we are going to wait the elections and after the election, we shall be intently following the insurance policies of the economical aspect. However our assumption doesn’t convey a second minimal wage improve in July. And nominal EBITDA progress in 2024 shall be round 10%, Ece.
Ece Mandaci
Thanks very a lot.
Kamil Kalyon
You are welcome.
Operator
The subsequent query comes from the road of Demirtas, Cemal with Ata Make investments. Please go forward.
Cemal Demirtas
Thanks very a lot. Congratulations for good outcomes. My first query is about this continued operation. You shared some historic figures, together with Ukraine. May you inform us the underside line web earnings quantity for full yr 2023, together with Ukraine in 2023? That is my query. I can see the — I can calculate the income and EBITDA however I can’t calculate the recircle quantity for discontinued websites on the web earnings degree. That is my first query. And possibly should you give extra digits in regards to the income progress, it’s so good to you, in order that we will evaluate. I believe it is going to be useful. And the opposite query is about your steerage. I perceive that for the — once you make the calculation primarily based on the IFRS 29 figures, you are saying that you’ll have, for example, 8%, 9% actual progress plus inflation 37% year-over-year. I believe that is the idea we’re making, if I did not perceive it unsuitable. That is my second query. And the third query, how do you see the Ukraine operations to behave up? You place it in discontinuity, because it was a worthwhile one, possibly going ahead, it should change. However are you able to give us some — the timeline? And the final is just not a query, however simply criticism I am making to all of the blue chips corporations in Turkey. To be trustworthy, I’d count on larger disclosure, transparency associated to inflation accounting as a result of it is actually arduous to grasp. And a lot of the corporations put a number of numbers as you probably did. However I do know some good examples just like the [indiscernible], they made entire — the comparability, which was very a lot useful. Only a fast, it is a criticism as a result of I hold [indiscernible] of our I at all times present it as an excellent normal however in my humble opinion that is the fundamental factor. I did not like several firm in Turkey, a lot of the blue chip corporations. They offer restricted figures, however I search for the transparency. I’d count on a lot, a lot larger. Thanks. Thanks very a lot.
Kamil Kalyon
Cemal, beginning out of your first query, the [discontinued] (ph) operations quantity is TRY1.9 billion within the web earnings aspect. Concerning the income progress, in actual phrases, our income grew by 15% to TRY107 billion in 2023. Attributable to contracted nature of our enterprise, the lagging affect of our sequential worth changes turned extra seen ranging from half of 2022 and it continued in 2023. Subsequently, the worth changes are the primary motive relating to the income progress within the historic figures. Concerning your third query, inflation — our year-end inflation expectations are round 37%, and the common fee, our expectation is round 52% for the 2024. Usually, it is actually arduous to, how can I say, it is actually arduous to finalize the inflationary accounting ideas or calculations for such a giant firm in a brief time period. It is actually arduous for us. Subsequently, we wish to be in a protected mode on this relating to the particularly actual progress situation. Your expectation is a bit of bit appropriate. We are saying that it is a excessive single digit, however as I mentioned earlier than, our intention can be arriving or reaching the double digit progress in 2024. Concerning your criticism, I wish to make some details about this situation, particularly Capital Markets Board. Final week we had a phone dialog, verbal dialog with Capital Markets Board, and they’re very eager or they’ve very strict functions or prohibitions to not declare the quantities or the, for instance, figures earlier than the inflation adjustment. Subsequently, we ready our presentation relating to the — by taking into this account. Subsequently, should you want additional details about any type of figures relating to earlier than inflation or after inflation, our workforce shall be very glad that will help you. Concerning the Ukraine query, would you wish to say something?
Ali Taha Koc
So we expect the authorized procedures to proceed after which I can’t, we can’t give a deadline however we are going to count on it’ll be over on this yr. However once more, it’s only a jurisdiction system. So we do not understand how lengthy it’ll take, however we’re doing our greatest to make it as fast as attainable.
Cemal Demirtas
Thanks. Concerning my first query, I perceive that the historic figures, together with Ukraine, you talked about round TRY1.9 billion, proper?
Kamil Kalyon
Sure.
Cemal Demirtas
However once I take a look at your monetary assertion, and it is the numbers we see for the inflation accounting requirements. However I see TRY1.97 billion, the web earnings, associated to money move, Ukraine. However I’m asking the historic figures, which may be decrease than this quantity, as a result of these numbers are all carried by means of the year-end. So to be able to — and my reasoning is to match with our full yr numbers, nothing greater than that. So it must be decrease than TRY1.9 billion. So I simply needed to reiterate my query. Thanks.
Kamil Kalyon
Cemal, possibly we will present the detailed details about this calculation after the decision to you.
Cemal Demirtas
Okay, thanks. Thanks very a lot. It was very useful and congratulations for the…
Kamil Kalyon
As a result of our figures are after inflation adjustment aspect and the discontinued operations. One determine we added, the historic values we shall be giving it after the decision.
Cemal Demirtas
Okay, thanks. Thanks very a lot.
Operator
The subsequent query is from a line of [indiscernible] with Barclays. Please go forward.
Unidentified Analyst
Hello, good night. Thanks very a lot for the presentation and thanks for taking my query. I’ve only one fast query. Do you might have any plans for the upcoming 2025 euro bond maturity and will you possibly share these with us? Thanks.
Kamil Kalyon
Sure, now we have some plans as a result of I believe 2025 and 2026 can be a whole lot of — there shall be a whole lot of actions on this yr, for instance, we expect this 5G situation, and now we have some — the maturity of our euro bonds are expiring. Subsequently, as I discussed, now we have round $1.7 billion greenback equal money in our palms, and now we have $120 million dedicated [life] (ph). That may be very ample for us, for instance, for the 2 years — sustaining our debt service for 2 years interval. However this yr, likely, we’re pondering to make some relating to the sufficient case for this to be able to get better this situation, we’re diligently exploring a variety of aggressive and rational alternate options for the reissues of 2025 mortgage this yr. This may be Sukuk or additionally once more a standard Eurobond website.
Unidentified Analyst
Sorry, may you please repeat what’s the dimension of the dedicated strains?
Kamil Kalyon
The dedicated line is $120 million.
Unidentified Analyst
Okay, thanks.
Kamil Kalyon
You are welcome.
Operator
The subsequent query comes from the road of Campos, Gustavo with Jefferies. Please go forward.
Gustavo Campos
Howdy, thanks very a lot for the presentation. Congratulations on the outcomes. Simply needed to, should you may present some coloration on the — your working capital flows as of this fourth quarter of 2023, unadjusted instruments from just like the inflation, that might be very useful. Thanks.
Kamil Kalyon
Sure, thanks very a lot for the query. We count on our mortgage portfolio to extend round TRY8 billion as of 2024 year-end. Accordingly, we’d proceed to see some stress on the working capital aspect, but now we have the pliability to regulate our administration in different working capital objects. Subsequently, our maximizing or minimizing to utilizing the working capital course of continues to be ongoing. We take the related information about this situation.
Gustavo Campos
Okay, sounds good. Thanks very a lot.
Operator
[Operator Instructions] The subsequent query comes from the road of [Singh, Madhi] (ph) with HSBC. Please go forward.
Unidentified Analyst
Sure, hello, thanks. That is [indiscernible] from HSBC. I simply have a few questions. Firstly, on the outcomes itself, simply questioning should you may share the income and EBITDA web earnings numbers in addition to the expansion year-on-year for the fourth quarter. As a result of I believe the outcomes listed here are for full yr and provided that the earlier quarter outcomes and all aren’t dependable, so it is going to be useful to cowl the…
Kamil Kalyon
It is for This fall outcomes.
Unidentified Analyst
Sorry?
Kamil Kalyon
Sorry, I could not — only a second.
Unidentified Analyst
The numbers within the desk are all for full yr. It will likely be good to have not less than some thought in regards to the This fall as effectively. So progress and…
Kamil Kalyon
We’ve solely full yr inflationary adjustment figures now we have. We shouldn’t have for just for This fall outcomes aren’t accessible proper now.
Unidentified Analyst
Okay, all proper. Any thought by once we can get these numbers? As a result of you recognize, I am simply attempting to grasp the current tendencies, as a result of, once you do the inflation adjustment on historic foundation, the tendencies type of don’t make any sense after that. So it is going to be good to have some sense in regards to the current tendencies. After which the second query is, is there any plan to distribute dividend for the yr? And in that case, by then we will find out about that?
Ali Taha Koc
As you recognize, the dividend proposal is first made by the Board of Administrators after which voted by the shareholders on the normal meeting. No proposal has been made by the Board of Administrators for this yr but. As you could recall from final yr, our Board of Administrators dividend proposal was introduced along with the Normal Meeting announcement. So you must comply with the Normal Meeting announcement. Subsequently, I don’t need to speculate on the potential proposal of the Board of Administrators relating to the dividends.
Unidentified Analyst
Nice. After which lastly on the steerage for subsequent yr, the excessive single digit income progress goal in addition to the 42% margin you might have talked about, given that you’re assuming 37% inflation fee there, if the inflation fee is far larger than this, do you assume these steerage will nonetheless maintain or you would need to tweak them? As a result of what I am unsure about is the underlying changes you need to make given the hyperinflationary accounting, what multipliers and index you utilize principally. So any thought there, any sensitivity is there can be useful.
Kamil Kalyon
Usually, as I mentioned, below the — we made this steerage for 2024 below the idea that the year-end inflation fee shall be 28%, 38%, and 37%, and the common fee shall be round 50%. If the inflation retains occurring, for instance, if this exists, our inflationary pricing mechanism shall be in place. Subsequently, we make some revise within the steerage aspect within the coming durations. However at the moment, we decide this steerage below the scope of our macroeconomic expectations.
Unidentified Analyst
Okay, so it’s honest to imagine that if inflation goes up, your actual income progress will most likely additionally enhance considerably?
Kamil Kalyon
Sure, you are proper. Completely.
Unidentified Analyst
Okay. Thanks.
Kamil Kalyon
Inflation pricing, it means. To your first query, my colleagues additionally knowledgeable me that, once more, we shouldn’t have any work on the This fall outcomes for the inflationary aspect. We’ve full yr.
Unidentified Analyst
Okay. Okay. Thanks.
Kamil Kalyon
You are welcome.
Operator
[Operator Instructions] The subsequent query comes from the road of Nagy, Nora with Erste Group Financial institution AG. Please go forward.
Nora Nagy
Hello, good night. Thanks for the presentation. Only a follow-up query from my aspect, please. If inflation shall be larger than you assume for 2024, is not it the case that the actual progress shall be decrease than what you are actually guiding for 2024?
Kamil Kalyon
I assumed I defined within the earlier one, if the inflation fee shall be larger than we count on, it signifies that the inflationary surroundings continues to be hold going. It means that we are going to make — we are going to carry on going the inflationary pricing aspect. Subsequently, we don’t count on at this stage, for instance, if that is so, we don’t count on a decrease progress fee.
Nora Nagy
Yeah, however I’d assume that that takes time for the output to catch as much as inflation, in order that the actual progress can be negatively impacted if inflation shall be larger than you assume?
Kamil Kalyon
However the momentum — now we have a momentum about this situation, and nonetheless now we have an inflation drawback in Turkey. As you could assume, for instance, our year-end, for instance, inflation fee is 37%, however the common is 50%. It signifies that inflationary surroundings nonetheless hold going till the top of half one. Subsequently, our inflationary adjustment or inflationary pricing mechanism or coverage will proceed with all of the yr, for instance. Subsequently, we don’t count on, for instance, [a lack] (ph) about this situation, as a result of we get the momentum about this situation. We’ve began making sequential worth changes ranging from the half two of 2022.
Nora Nagy
Thanks.
Operator
Girls and gents, there aren’t any additional questions at the moment. I’ll now flip the convention over to Turkcell administration for any closing feedback. Thanks.
Ali Taha Koc
Thanks very a lot for the decision and thanks very a lot for the questions. So hopefully we’ll have a greater and a higher yr into 2024 and hope to see you and discuss to you within the subsequent quarterly replace.
Operator
Girls and gents, the convention has now concluded, and you could disconnect your phone. Thanks for calling. Have a nice night.
