Turkcell Iletisim Hizmetleri A.S. (TKC) Q4 2023 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your chorus call operator. Welcome and thank you for joining the Turkcell’s conference call and live webcast to present and discuss the Turkcell’s full year 2023 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Ozlem Yardim, Investor Relations and Corporate Finance Director. Ms. Yardim, you may now proceed.

Thank you, Konstantinos. Hello, everyone. Welcome to Turkcell's 2023 full year earnings call. Today, our CEO, Ali Taha Koc and CFO, Kamil Kalyon will be delivering a brief presentation covering operational and financial results of 2023, which will be followed by a Q&A session. Before we begin, I would like to kindly remind you to review our safe harbor statements available at the end of our presentation. Now I'm handing the meeting over to Mr. Ali Taha.

Thank you, Ozlem. Good afternoon, everybody, and thank you for joining us today. Despite the challenges of 2023, including various uncertainties and economic pressures, we remain committed to our goal of pioneering the digital transformation of Turkiye and generating value. By leveraging our technological capabilities and leading the telecommunication market, we achieved solid results across all fronts. According to the IAS29 applications, we delivered double-digit real revenue growth of 15% driven by dedicated price adjustments over the past two years, which has supported our pool expansion as well. We also prioritized value-generating postpaid and fiber customers, expanding our subscriber base by 799,000 net additions. This top line growth led to significant operational leverage, evidenced by a remarkable 20% increase in EBITDA. Our margin expanded by 1.8 percentage points to 41%, driven by reduced energy prices and lower interconnection expenses. Ultimately, our strong operational performance resulted in a remarkable net profit of TRY12.6 billion, marking an impressive 83% year-on-year rise. Next slide, please. We successfully achieved our guidance in 2023. In a challenging year, we maintained our business strategy, prioritizing agility to effectively respond to evolving market conditions, particularly to address inflationary pressures. Consequently, including Ukraine’s financials, we recorded 75% revenue growth, suppressing our guidance. This strong performance also enabled us to exceed our EBITDA expectations. An accelerated top line performance resulted in a 21% CapEx to sales ratio at year end. Additionally, investments to solar energy and Belarus have been postponed to following year. Next slide, please. Let's take a closer look at our mobile operational performance. Thanks to a focus on postpaid segment, we added 1.6 million postpaid customers in 2023, of which 476,000 came in the last quarter. The prepaid segment shrank by 1.1 million subscribers annually, mainly due to the alternative data solutions. In addition, the rising cost of new line activations and customers preferring postpaid lines to fix their offerings in an inflationary environment also negatively impacted the prepaid site in 2023. Please recall that we also disconnected inactive prepaid lines at year end, which was the main reason for the quarterly acceleration in mobile churn. Compared to the previous year, our portfolio composition has become more valuable. We achieved a three-point increase in post-paid share in the mobile segment, exceeding 71% this year. By historical figures, blended mobile ARPU grew by 85% year-on-year, thanks to the rational price adjustments, upsell efforts, and a rising postpaid subscriber share in the portfolio. In line with inflationary pricing policy, we started the quarter with around 20% adjustment in our mobile prices in October. We will continue this approach and therefore anticipate sustaining real ARPU growth in 2024. Next slide please. In the fixed broadband segment, we adopted a profitability-focused approach in ADSL and cable by prioritizing penetration in the fiber segment. On the fiber front, we are pleased to have registered a further 43,000 net additions in this quarter and 169,000 for the full year of 2023, owing to an expanded footprint and a seamless, pure fiber experience. Furthermore, we are pleased to see strong demand for our TV services. Despite higher price adjustments compared to the data-only packages, we provide this service to 66 out of every 100 households among our residential fiber customers. ARPU continued to widen the spread with inflation, growing by 76% on a yearly basis in historical figures. This growth was driven mainly by two factors, a rise in 12-month contract tariffs which enabled us to reflect price increases more rapidly and a rise in the share of higher speed tariffs from 18% to 30% compared to the previous year. As 86% of new residential fiber customers opted for 12-month contracts in the last quarter, we anticipate a higher share in the coming quarters. Next slide, please. Let's discuss our strategic focus areas, beginning with digital services and solutions. Standalone revenue from digital services and solutions grew 19% year-on-year, driven primarily by 25% increase in digital OTT service revenues. The paid user base reached $5.6 million, mainly with TV and cloud services. Our digital business registered solid 23% year-on-year revenue growth. Beside the performance in managed services, a 50% increase in cloud service revenues and a remarkable 61% real growth in data center revenues supported the growth. Amid increased demand in areas including data centers, cloud solutions, and data analytics projects, we secured a thousand new contracts in the last quarter. Looking ahead to 2024, while TV+ and lifebox will maintain their flagship position in digital services, we will prioritize ramping up the capacity of data centers and cloud services to meet the high demand in these areas. Next slide, please. Our techfin companies continued to deliver a strong performance, contributing to the company's top line growth in 2023. During 2023, Paycell expanded its product portfolio and strengthened its position within the fintech verticals to better serve customer needs. Paycell offers services from stock exchange transactions to shopping limits through Financell, and it is taking firm steps towards leading the Turkish fintech ecosystem. Paycell revenue rose 29% year-on-year, primarily fueled by the success of its direct carrier business Pay Later. The active user base of Pay Later reached $6 million, marking 19% annual growth, while its transaction volume surged 80% in the last quarter. Meanwhile, Financell, our financing company, continued to lead the sector in small loans catering to the needs of Turkcell customers, also playing a significant role in the improving the financial inclusion in Turkey. Financell’s revenue grew by 28%, thanks to the demand for smart devices and new areas we enter such as shopping loans, car loans, and green loans. However, a significant rise in interest rates in the last quarter leading to higher funding costs had an adverse impact on Financell’s margins. Next slide, please. Now our performance in the international markets. Ukrainian subsidiaries have been classified as discontinued operations as of the end of 2023 due to announced sales process. Turkcell international revenues, which now accounts for 3% of group revenues, decreased by 1.8% to TRY2.6 billion. Base revenues rose 20% on a yearly basis in local currency terms, primarily driven by higher data invoice revenues. The improvement in EBITDA margin was supported by lower interconnection costs and energy expenses as a percentage of revenue. Revenues of our Turkish Republic of Northern Cyprus subsidiary increased 20% year-on-year, fueled by strong real ARPU growth. The introduction of 4.5G services in September 2023 resulted in a 45% increase in 4.5G data consumption on a quarterly basis. Next slide, please. In our pursuit of building the Intelligent Edge, we will focus on three key initiatives in 2024. As Turkiye's largest data center operator, we prioritize keeping Turkiye’s data within its borders to ensure data security and confidentiality of personal information. To date, we have invested EUR330 million in our data centers, which currently boost a capacity of 33 megawatts in four new generation data centers. Due to high demand, we plan to add 9.1 megawatt of new capacity this year. Secondly, Turkcell is leveraging its capabilities in artificial intelligence and machine learning to enhance our business models. For instance, our stores and the Turkcell mobile application have implemented AI, supported identity verification processes. Additionally, we have integrated AI into our communication channels for an improved customer experience. Last but not least, we remain committed to focusing on our state-of-the-art mobile and fiber infrastructure. Our objectives include increasing fiber-to-site investments and carrying out GPON modernization for improved efficiency. We have also signed a cooperation agreement with Lynk, a non-terrestrial network provider, to provide mobile services via satellite in rural areas where access to mobile networks is limited. We continue to take proactive steps to maintain our leadership position in the technologies of 5G and beyond. Next slide, please. To conclude my presentation, I would like to end by sharing our guidance for 2024. Given the macroeconomic dynamics, projecting inflation in particular will be a challenging task. We aim to keep you updated about the guidance whenever there is a change in our inflation assumption. For 2024, we expect high single-digit real revenue growth, EBITDA margin guidance of around 42%, and we expect a CapEx intensity of around 23%. I will now leave the floor to our CFO, Mr. Kamil Kalyon.

Thank you very much, Ali Taha. Now let's move on to our financial results. Before we proceed, I'd like to outline the impact of inflationary accounting on our key financial metrics. Group revenues ramped up by 76% in historical figures, while under inflationary accounting, the rise was 15%. Over the past two years, inflation-adjusted Turkcell Turkiye revenues have outpaced the growth of Turkcell Group revenues, driving the overall growth. An expanding subscriber base and robust ARPU growth, as well as digital services, were the main drivers of this growth. EBITDA increased by 83% on historical figures, while according to inflationary accounting, growth was 20%. Apart from robust top line growth, lower energy prices, favorable interconnection expenses, and a decrease in the cost of goods sold as a percentage of revenues have been instrumental in driving real EBITDA expansion. Lastly, net income growth was 65% on historical figures, whereas by inflation adjusted figures, it rose 82%, thanks to a strong EBITDA performance. Next slide, please. In 2023, EBITDA surged 20% to TRY44 billion thanks to a strong top line performance. Accordingly, the EBITDA margin expanded 1.8 percentage points year-on-year. Despite an increase in personal expenses resulting from two wage rises throughout the year, this was more than offset by declines in the cost of goods sold, energy costs, and interconnection expenses. The reduction in energy prices during the second and third quarters of 2023 supports the margin. Additionally, the continued decline in MTR positively impacted our profitability, a trend expected to persist in 2024. Next slide, please. Now, let's dive into the net income performance. Thanks to a robust operational performance, EBITDA has contributed TRY7.3 billion to net income. The other operating income and expense item includes the first installment of the earthquake donation payment made in October, as well as a provision amount for the second installment of the donation, which was already paid in January. The balance sheet change due to inflationary adjustments in 2023 had a more adverse effect compared to 2022, with the monetary gain loss item being the most significant pressure point for net income, amounting TRY4 billion. Our Ukraine operation, classified under discontinued operations due to the ongoing sales process had a positive impact of TRY1.1 billion on net income throughout the year 2023. Next slide, please. Let's take a closer look at our CapEx management. In historical figures, the CapEx to sales ratio for 2023 was 20.6% with accelerated revenue. This year, we maintained an equal focus on mobile and fixed investments. As our CEO stated, in alignment with our goals, our investments in 2024 will primarily target three areas. One, we will increase the fiber to towers, extending them to 41% of towers in Turkiye. This empowers us to advance our core capability in offering best-in-class 4.5G services and further strengthen our position in 5G and future technologies. Second, we will continue our investments in solar renewable energy to generate electricity for sustainable resources and secure cost advantage for the coming years. Lastly, responding to heightened demand, we will expand our data center capacity by constructing two new modules in Corlu and Ankara, increasing capacity by 28%. As a result for 2024, we anticipate greater CapEx intensity. Next slide, please. Now let's turn our attention to the balance sheet. In 2023, our cash position increased by TRY7.2 billion, majorly supported by FX movements and organic cash generation. Our gross debt was at TRY84 billion, and we ended the year with a net debt position of TRY24 billion. Thanks to strong cash generation, our net leverage decreased to 0.5 times. In addition to the strong cash position, we have committed lines of around $120 million equivalent for the upcoming periods. The majority of our cash remains denominated in hard currencies. Excluding FX swaps, 53% of our cash is in US dollars and 20% in euros. Next slide, please. Lastly, let's look into the management of the foreign currency risk for 2023. At the end of 2023, our balance sheet had around $2 billion equivalent in FX financial liabilities. In addition to the $1.5 billion equivalent FX denominated financial assets, we have a $0.6 billion effective hedging portfolio, the vast majority of which consists of future forward and NDFs. We ended up with a long FX position of $22 million, which is within our neutral FX position definition. This concludes our presentation, and we can now open the line for questions. Thank you.

Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Cesar Tiron with Bank of America Merrill Lynch. Please go ahead.

Yes, hi. Good evening. Congratulations on the numbers and thanks for the call and the opportunity to ask questions. I have two questions if that's okay. If I look at the new accounting standard including inflationary accounting and if I look at your guidance, there's a slowdown from what I think you delivered in 2023, which I think was 14% or 15% percent, and your guidance of high single digit. Can you please explain why excluding inflation you think the revenue growth will slow down? That's the first one. The second question, I see an increase again in the guidance of CapEx intensity to sell. Can you please explain it? Is that mainly driven by the weakening of the currency? And then the third question, if you can please update us on Ukraine and the sale process and this litigation which you've disclosed, I think, one or two weeks ago? Thank you so much.

Thank you very much, Cesar, for the question Actually as of Q4 this year, in accordance with the standard published by the capital market book, it's newly implemented for capital market book legislation in Turkey inflation accounting standard. It's very new for us and before getting started, I would like to lay some groundwork and highlight few points regarding the standard of its effects on our financials. Maybe it would be helpful for your side. As you may already know, financial performance figures for current year are adjusted for inflation on a monthly basis with an index which is specific to the related month. Additionally, the prior year figures are adjusted with the current year index to reflect the change in purchasing power in order to make the figures comparable. Due to the contracted nature of [indiscernible] business, the inflationary environment initially affected our top line adversely in 2024 -- 2022, but in fiscal year 2023, with the help of sequential price adjustments, we have [indiscernible] quarters. We returned to a real growth, achieving a real growth of around 15% increase in our revenue side. Before elaborating further on the subject for the 2024 guidance, please be reminded that our guidance captures the expected impacts of the IAS29 application as well as our operational expectations for 2024. It's a very technical issue, especially making an assumption in the inflationary accounting perspective is a little bit high. Capital market boards of Turkey also insist us to make a declaration about the inflation adjusted figures. Therefore, we would like to be in the safe side in the first quarter at this stage about the guidance side, especially from the growth side, but we expect a high single digit revenue growth for 2024, but our aim most probably would be taking this amount to double digits in 2024. In the CapEx side, as part of our CapEx planning this year, we will continue to focus more on our core businesses according to where we will follow our demand-driven CapEx approach. We are expanding the wide space capacity of data centers by adding new modules to meet increasing demand because there is a big demand in the data center services in Turkey. Therefore, we would like to keep going to make investments in the data center side. This is the first issue, which the intensity is high in 2024. Additionally, we have renewable energy investment plans, as you know, on the energy side to meet our own electricity demand. In 2023, we initiated investments in solar power plant installations to achieve a capacity of 300 megawatts within three years period. The first phase In 2023, we achieved 54 megawatt capacity, and we aim to cover 65% of our self-usage from our own premises. Therefore, we keep going on making investment in solar issue in 2024. This may be the second reason for the CapEx intensity side. All in all, mobile and fixed CapEx will take more than half of the CapEx budget, especially in this year also with the remaining share to be taken mainly by data center and renewable energy investments can be the summary of the CapEx intensity side.

With respect to the question addressed to Ukraine, as per our company's Board of Directors decision dated December 20, 2023, a shared transfer agreement was signed on December 29, 2023 for the transfer of all shares along with the rights and debts of our company's subsidiaries operating in Ukraine to NJJ capital, subject to certain conditions determined under relevant agreement. As completion of the transaction depends on fulfillment of certain closing actions, permissions granted by authorities and conditions precedent including removal of temporary injunction over the shares. Meanwhile, our company has been informed through the Ukrainian subsidiary that they have received an official ruling from an Ukrainian court on March 5, 2024, imposing temporary injection by way of applying CSR over the 19.8% of the shares and related corporate rights of Lifestyle LLC and 100% of the shares and related corporate rights of Ukrtower and Paycell LLC within the criminal proceedings related to suspicions involving Fridman. We would like to emphasize that we believe that the aforementioned person has no direct or indirect control or influence over Turkcell and-or Ukrainian subsidiaries. Additionally, it is worth the emphasis that this decision to apply temporary injunction has no any significant impact on the daily operations of these Ukrainian subsidiaries. Our Ukrainian subsidiaries already filed for an appeal in order to remove relevant temporary injunction and dismiss of the ruling to be to the related court submitted on March 7, 2024. With an aim to cancel the [indiscernible] subsidiaries vigorously contest this decision. Our Ukrainian subsidiaries continuously work on completion of conditions, precedent, including this temporary injunction being lifted over Ukrainian subsidiaries' shares for the closing regarding the sale of Ukrainian assets to NJJ Capital. The enterprise value to be taken into account at the closing date for the respective sales transaction is determined as $525 million and the final sale consideration will be subject to adjustments to be made including cash and debt adjustments after the closing.

Very clear.

Okay.

The next question is from the land of Mandaci, Ece with UNLU Securities. Please go ahead.

Hi, congratulations on the strong results. I have a couple of questions. One is about your EBITDA guidance for 2024. It looks like you're expecting maybe some double-digit growth in your EBITDA in real terms. What's the main reason for that? I understand that you are going to make price adjustments and there will be real revenue growth, but could there be any possibilities in cost saving maybe? Can you provide more details about that? And secondly, I'm seeing that you have recorded deferred tax income. You also had last year, is this due to the revaluation of some of it and will this be continuing in 2024 as well? And thirdly, I see that you expensed some donation expense in the fourth quarter, but cash flow wise, this payment will be done in the first quarter. Is that right? Thank you.

Yes, Ece. Starting from the third question, yes, the donation is paid on January 2024, the second installment regarding the donation payment. And our EBITDA margin forecast for 2024, as you know, it's a very tough environment in 2024 also for Turkey. Our full year EBITDA margin was around 41% in 2023, which is 1.8 pp above of last year. However, this year we expect a flattish margin at around 42% because inflationary cost pressures will continue and the cost of energy prices will be one of the most important factors that will affect our EBITDA margin. As you know, in 2023, the energy costs are subsidized by the government side. Therefore, it really affected our EBITDA high margin in 2023. However, our strong real top line growth support by our sequential price adjustments. Therefore, as you know, we are all continuously promising our investors to make the inflationary pricing. We continue to do it in 2023. And most probably in 2024, this inflationary sequential price adjustment will continue and we would aim the same EBITDA margins in 2024. The first question is about…

Deferred tax income. Is that continuing in 2024 as well and the reason for that, if you can explain.

Normally, after the inflationary adjustment side we will not make any revelation for the fixed assets side in the local side. Therefore it would not -- there would not be any, most probably would be a revelation after the inflationary accounting side. Therefore we have some tax effects in 2023 coming from the donation side. In 2024, we do not expect any donation-related deferred tax or [indiscernible] basis effect in 2024 in the deferred tax side.

Just to follow up on your EBITDA margin guide, do you consider any more increase in minimum wage in the second half or increase in personal expenses in the second half of the year?

No. Our macro model does not include a second increase in the minimum wage income. We will see after the -- we will wait the elections and after the election, we will be closely following the policies of the economical side. But our assumption does not bring a second minimum wage increase in July. And nominal EBITDA growth in 2024 will be around 10%, Ece.

Thank you very much.

You're welcome.

The next question comes from the line of Demirtas, Cemal with Ata Invest. Please go ahead.

Thank you very much. Congratulations for good results. My first question is about this continued operation. You shared some historical figures, including Ukraine. Could you tell us the bottom line net income number for full year 2023, including Ukraine in 2023? That's my question. I can see the -- I can calculate the revenue and EBITDA but I cannot calculate the recircle number for discontinued sites at the net income level. That's my first question. And maybe if you give more digits about the revenue growth, it is so good to you, so that we can compare. I think it will be helpful. And the other question is about your guidance. I understand that for the -- when you make the calculation based on the IFRS 29 figures, you're saying that you will have, let's say, 8%, 9% real growth plus inflation 37% year-over-year. I think that's the assumption we are making, if I didn't understand it wrong. That's my second question. And the third question, how do you see the Ukraine operations to act up? You put it in discontinuity, as it was a profitable one, maybe going forward, it will change. But can you give us some -- the timeline? And the last is not a question, but just criticism I'm making to all the blue chips companies in Turkey. To be honest, I would expect higher disclosure, transparency related to inflation accounting because it's really hard to understand. And most of the companies put several numbers as you did. But I know some good examples like the [indiscernible], they made whole -- the comparison, which was very much helpful. Just a quick, it's a criticism because I keep [indiscernible] of our I always show it as a very good standard but in my humble opinion that's the basic thing. I didn't like any company in Turkey, most of the blue chip companies. They give limited figures, but I look for the transparency. I would expect much, much higher. Thank you. Thank you very much.

Cemal, starting from your first question, the [discontinued] (ph) operations amount is TRY1.9 billion in the net income side. Regarding the revenue growth, in real terms, our revenue grew by 15% to TRY107 billion in 2023. Due to contracted nature of our business, the lagging impact of our sequential price adjustments became more visible starting from half of 2022 and it continued in 2023. Therefore, the price adjustments are the main motive regarding the revenue growth in the historical figures. Regarding your third question, inflation -- our year-end inflation expectations are around 37%, and the average rate, our expectation is around 52% for the 2024. Normally, it's really hard to, how can I say, it's really hard to finalize the inflationary accounting principles or calculations for such a big company in a short term. It's really hard for us. Therefore, we would like to be in a safe mode in this regarding the especially real growth issue. Your expectation is a little bit correct. We say that it's a high single digit, but as I said before, our aim would be arriving or reaching the double digit growth in 2024. Regarding your criticism, I would like to make some information about this issue, especially Capital Markets Board. Last week we had a telephone conversation, verbal conversation with Capital Markets Board, and they are very keen or they have very strict applications or prohibitions not to declare the amounts or the, for example, figures before the inflation adjustment. Therefore, we prepared our presentation regarding the -- by taking into this account. Therefore, if you need further information about any kind of figures regarding before inflation or after inflation, our team will be very happy to help you. Regarding the Ukraine question, would you like to say anything?

So we are expecting the legal procedures to continue and then I cannot, we cannot give a deadline but we will expect it's going to be over in this year. But again, it is just a jurisdiction system. So we don't know how long it's going to take, but we are doing our best to make it as quick as possible.

Thank you. Regarding my first question, I understand that the historical figures, including Ukraine, you mentioned around TRY1.9 billion, right?

Yes.

But when I look at your financial statement, and it's the numbers we see for the inflation accounting standards. But I see TRY1.97 billion, the net income, related to cash flow, Ukraine. But I am asking the historical figures, which might be lower than this number, because these numbers are all carried through the year-end. So in order to -- and my reasoning is to compare with our full year numbers, nothing more than that. So it should be lower than TRY1.9 billion. So I just wanted to reiterate my question. Thank you.

Cemal, maybe we can provide the detailed information about this calculation after the call to you.

Okay, thank you. Thank you very much. It was very helpful and congratulations for the…

Because our figures are after inflation adjustment side and the discontinued operations. One figure we added, the historical values we will be giving it after the call.

Okay, thank you. Thank you very much.

The next question is from a line of [indiscernible] with Barclays. Please go ahead.

Hi, good evening. Thank you very much for the presentation and thank you for taking my question. I have just one quick question. Do you have any plans for the upcoming 2025 euro bond maturity and could you maybe share those with us? Thank you.

Yes, we have some plans because I think 2025 and 2026 would be a lot of -- there will be a lot of movements in this year, for example, we are expecting this 5G issue, and we have some -- the maturity of our euro bonds are expiring. Therefore, as I mentioned, we have around $1.7 billion dollar equivalent cash in our hands, and we have $120 million committed [life] (ph). That is very sufficient for us, for example, for the two years -- maintaining our debt service for two years period. But this year, most probably, we are thinking to make some regarding the adequate case for this in order to recover this issue, we are diligently exploring a range of competitive and rational alternatives for the reissues of 2025 loan this year. This might be Sukuk or also again a conventional Eurobond site.

Sorry, could you please repeat what is the size of the committed lines?

The committed line is $120 million.

Okay, thank you.

You're welcome.

The next question comes from the line of Campos, Gustavo with Jefferies. Please go ahead.

Hello, thank you very much for the presentation. Congratulations on the results. Just wanted to, if you could provide some color on the -- your working capital flows as of this fourth quarter of 2023, unadjusted tools from like the inflation, that would be very helpful. Thank you.

Yes, thank you very much for the question. We expect our loan portfolio to increase around TRY8 billion as of 2024 year-end. Accordingly, we might continue to see some pressure on the working capital side, yet we have the flexibility to adjust our management in other working capital items. Therefore, our maximizing or minimizing to using the working capital process is still ongoing. We take the relevant records about this issue.

Okay, sounds good. Thank you very much.

[Operator Instructions] The next question comes from the line of [Singh, Madhi] (ph) with HSBC. Please go ahead.

Yes, hi, thanks. This is [indiscernible] from HSBC. I just have a couple of questions. Firstly, on the results itself, just wondering if you could share the revenue and EBITDA net income numbers as well as the growth year-on-year for the fourth quarter. Because I think the results here are for full year and given that the previous quarter results and all are not reliable, so it will be helpful to cover the...

It's for Q4 results.

Sorry?

Sorry, I couldn't -- just a second.

The numbers in the table are all for full year. It will be good to have at least some idea about the Q4 as well. So growth and…

We have only full year inflationary adjustment figures we have. We do not have for only for Q4 results are not available right now.

Okay, all right. Any idea by when we can get those numbers? Because you know, I'm just trying to understand the recent trends, because, when you do the inflation adjustment on historical basis, the trends kind of do not make any sense after that. So it will be good to have some sense about the recent trends. And then the second question is, is there any plan to distribute dividend for the year? And if so, by then we can know about that?

As you know, the dividend proposal is first made by the Board of Directors and then voted by the shareholders at the general assembly. No proposal has been made by the Board of Directors for this year yet. As you may recall from last year, our Board of Directors dividend proposal was announced together with the General Assembly announcement. So you should follow the General Assembly announcement. Therefore, I do not want to speculate on the potential proposal of the Board of Directors regarding the dividends.

Great. And then finally on the guidance for next year, the high single digit revenue growth target as well as the 42% margin you have talked about, given that you are assuming 37% inflation rate there, if the inflation rate is much higher than this, do you think these guidance will still hold or you would have to tweak them? Because what I'm not sure about is the underlying adjustments you have to make given the hyperinflationary accounting, what multipliers and index you use basically. So any idea there, any sensitivity is there would be helpful.

Normally, as I said, under the -- we made this guidance for 2024 under the assumption that the year-end inflation rate will be 28%, 38%, and 37%, and the average rate will be around 50%. If the inflation keeps going on, for example, if this exists, our inflationary pricing mechanism will be in place. Therefore, we make some revise in the guidance side in the coming periods. But currently, we determine this guidance under the scope of our macroeconomic expectations.

Okay, so it is fair to assume that if inflation goes up, your real revenue growth will probably also improve somewhat?

Yes, you're right. Absolutely.

Okay. Thank you.

Inflation pricing, it means. For your first question, my colleagues also informed me that, again, we do not have any work on the Q4 results for the inflationary side. We have full year.

Okay. Okay. Thank you.

You're welcome.

[Operator Instructions] The next question comes from the line of Nagy, Nora with Erste Group Bank AG. Please go ahead.

Hi, good evening. Thanks for the presentation. Just a follow-up question from my side, please. If inflation will be higher than you assume for 2024, isn't it the case that the real growth will be lower than what you are now guiding for 2024?

I thought I explained in the previous one, if the inflation rate will be higher than we expect, it means that the inflationary environment is still keep going. It means that we will make -- we will keep on going the inflationary pricing side. Therefore, we do not expect at this stage, for example, if this is the case, we do not expect a lower growth rate.

Yeah, but I would assume that that takes time for the output to catch up to inflation, so that the real growth would be negatively impacted if inflation will be higher than you assume?

But the momentum -- we have a momentum about this issue, and still we have an inflation problem in Turkey. As you may assume, for example, our year-end, for example, inflation rate is 37%, but the average is 50%. It means that inflationary environment still keep going until the end of half one. Therefore, our inflationary adjustment or inflationary pricing mechanism or policy will continue with all the year, for example. Therefore, we do not expect, for example, [a lack] (ph) about this issue, because we get the momentum about this issue. We have started making sequential price adjustments starting from the half two of 2022.

Thank you.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Turkcell management for any closing comments. Thank you.

Thank you very much for the call and thank you very much for the questions. So hopefully we're going to have a better and a greater year into 2024 and hope to see you and talk to you in the next quarterly update.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling. Have a pleasant evening.