Turk Telekom Net Profit Jumps in Fourth-Quarter

By Yeliz Candemir

ISTANBUL--Turk Telekomunikasyon AS (TTKOM.IS), Turkey's biggest landline operator and Internet-service provider, reported late Thursday a 94% jump in fourth-quarter net profit, citing strong growth in mobile and fixed broadband businesses and lower financial costs.

Net income for the three months to December was 504 million Turkish liras ($206.3 million), below analysts' forecasts of TRY558 million, and nearly doubling the TRY260 million profit posted in the same period last year, the Istanbul-based company said.

The operator is 55%-owned by Saudi Oger Group, with Turkey's Treasury holding a 30% stake and the remaining shares traded publicly.

Turk Telekom's revenue rose 10% from a year earlier to TRY3.5 billion in the fourth quarter, said the company. Net financial expenses were TRY67 million in the fourth quarter, compared with TRY474 million in the same quarter of 2013.

In the full year of 2014, Turk Telekom posted a net profit of TRY2.007 billion, compared with TRY1.303 billion in 2013.

"Turk Telekom's earnings came below market consensus...as a result of negative impact of low margin construction revenue and one-time charges amounting to TRY89 million," said Alper Ozdemir, an analyst at Oyak Securities in Istanbul.

"We rate Turk Telekom at Marketperform, with a positive bias supported by operationally strong fourth-quarter numbers and benefits of integration process and prospective contribution from TV business," said Mr. Ozdemir, with a target price TRY7.9/share.

Turk Telekom shares were trading 1.5% lower at TRY7.1, amid a 0.4% higher overall Istanbul market at 0750 GMT.

Write to Yeliz Candemir at [e-mail]

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