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according to Seker Invest’s calculations.
The cash dividends are planned to be distributed on July 28.
See table above for major dividend payers or Bizim Menkul’s note for a full list. In March, Turk Telekom planned to distribute 50% of its 2019 profit.
In April, Turkish parliament capped dividends at 25% of 2019 profits.
The banks had already been “advised” not to distribute dividends from their 2018 and 2019 profits. Isbank tried its luck last year, but banking watchdog BDDK blocked the move.
In May, some unnamed bank executives complained to Reuters that “years of government pressure to defer dividends and drive Turkey’s stop-start growth have tested the patience of shareholders”.
In April, Fitch Ratings advised that Tupras has a policy of distributing large dividends, “but in light of the weaker results we do not expect the company to pay dividends in 2020 and 2021”.
The cut in Turk Telekom’s dividend payments is another blow to Garanti Bank, Akbank and Isbank as they are trying to rescue their invested money before Turk Telekom’s licence expires.
In 2018, the two banks, together with fellow local lender Isbank (ISBNK), took over a 55% stake in Turk Telekom after the former owner of the stake, Otas – a unit of Dubai-based Oger Telecom – failed to keep up payments on a $4.75bn loan; the situation produced the largest default in Turkish history and the biggest M&A deal in 2018.
Turk Telekom has not distributed dividends for three years. It posted losses in 2016 and 2018 due to lira depreciation and its huge short FX position.
The company decided to reduce its leverage rather than distribute dividends from its 2017 profit.
Turk Telekom swung to TRY2.41bn in net profit for 2019 from a net loss of TRY1.39bn in 2018, thanks to the relatively stable lira. Financial expenses declined to TRY3.53bn last year from TRY6.45bn a year ago due to sizeable FX and hedging gains, but they still regarded as high against previous years.
In May, the company reported a Q1 net income gain of 113% y/y to Turkish lira (TRY) 661mn (€88mn). The company cut its revenue growth forecast to 13% from the previous estimate of 14% while slashing the ebitda forecast to TRY 12.4bn-12.6bn from TRY12.4bn.
Turk Telekom is the main exposure of Borsa Istanbul’s most popular lenders Garanti BBVA (GARAN) and Akbank (AKBNK).
The lenders are aiming to sell their Turk Telekom stake, but they have not yet found a buyer. The main difficulty is the risk that Turk Telekom’s licence won’t be extended by the government beyond 2026, meaning the purchaser would lack time to recoup their investment through dividend payouts.
Turk Telekom is the leading integrated telco in Turkey. It operates the country's largest fixed network and the smallest of its three mobile networks.
59​ TURKEY Country Report​ August 2020 ​ ​www.intellinews.com