Turk Telekom Net Profit Tumbles in First Quarter

   By Yeliz Candemir 
 

ISTANBUL--Turk Telekomunikasyon AS (TTKOM.IS), Turkey's biggest landline operator and Internet-service provider, reported Wednesday a 93% fall in first-quarter net profit, citing foreign currency losses due to the deprecation of the lira against the dollar.

Net income for the three months to March was 27 million Turkish lira ($10.05 million), below analysts' forecasts of TRY59 million and a drop from the TRY384 million profit posted in the same period last year, the company said.

The Istanbul-based 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 7.5% from a year earlier to TRY3.4 billion in the first quarter, the company said. Net financial expenses were TRY737 million in the first quarter, compared with TRY246 million in the same quarter of 2014.

"Currency pressure on bottom-line was very significant... However, operating performance is better than expectations supported by significant margin expansion in mobile subsidiary, Avea," said Oyak Securities in Istanbul.

The lira has slumped 15% against the dollar since the start of the year, due to a broader emerging markets selloff on rate increase expectations from U.S. Federal Reserve, Turkey's slowing economic growth and political uncertainty ahead of parliamentary elections in June.

Turk Telekom shares were trading 0.4% higher at TRY6.98, amid a 0.14% higher overall Istanbul market at 0635 GMT.

Write to Yeliz Candemir at [e-mail]

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