Good day, welcome to the first quarter 2018 results conference call. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Korhan Bilek, Director of Investor Relations and Mergers and Acquisitions. Please go ahead, sir.
Thank you, Tiffany. Hello, everyone. Welcome to Turkcell's first quarter 2018 results call. Today's speakers are our CEO, Mr. Kaan Terzioğlu, and our CFO, Mr. Bülent Aksu. We have a brief presentation, afterwards, we will be taking your questions. Before we start, I would like to remind you to review the disclaimer of our presentation. I hand over to Mr. Terzioğlu.
Thank you very much, Korhan. Good afternoon, good evening, welcome to Turkcell's first quarter 2018 results call. We have had a strong start to 2018 with a record top line of TRY 4.8 billion, up by 17.5% year-over-year. This brings the two-year cumulative growth rate of 48%. EBITDA rose 44.4% to TRY 2 billion. Including new IFRS impacts, the EBITDA margin was up by eight percentage points to 42.5%. Nearly 59% of our mobile customers have used voice data in at least one digital service, 46% of fixed residential subscribers use our TV services. The increasing data usage trend for 4.5G users has continued, reaching 6.1 gigabytes in March. This quarter, we marked a first by testing one gigabits on our 4.5G network, demonstrating its capabilities.
We continue to increase 4.5G compatible smartphones in our network, reaching 16 million with quarterly addition of 1 million new devices. On March 29, the Turkcell General Assembly was held, the decision to distribute TRY 1.9 billion of dividends was approved. The distribution will be done in three installments in June, September, and December. In early April, we successfully issued a new $500 million bond with 5.8% coupon. Since our last issuance in 2015, we have remained the sole Turkish company to have tapped the bond market with a 10-year maturity note. Next slide. I will elaborate more on the financial results of the quarter. We achieved a revenue increase in high teens, reflecting continued growth momentum.
Our two-year cumulative growth, a metric that we use to normalize the impact of 4.5G, reached a new high of 48% in Q1, which trailed at 35%-40% range in 2017. We have also achieved record EBITDA exceeding TRY 2 billion. Operating leverage, as well as reorganization of sales channels and accretive EBITDA by Financell are the main contributors to the organic growth of EBITDA. This quarter, we adopted new IFRS standards into our reporting, which Bülent will elaborate in detail. Prudent receivables management and decreasing churn resulted in higher than initially anticipated IFRS impacts on our Q1 financial results. Considering the impacts on the remaining quarters, we are keeping our 2018 EBITDA margin target at the 37%-40% range. I must highlight that IFRS impacts on our financials are potentially higher than our peers due to our strong operational results and metrics.
Having completed the bulk of 4.5G investments, our operational capital expenditures in Q1 resulted in 11.5 percentage point CapEx to sales ratio with a 1.7 percentage points reduction versus Q1 of the similar period last year. Next slide. Let's elaborate on Turkcell Turkey's operational performance. In the first quarter, we had 37.3 million subscribers in Turkey with 1.6 million yearly net additions. This quarter, we gained 536,000 mobile customers. Of those, 382,000 were prepaid and 155,000 were postpaid. Accordingly, our postpaid subscribers represent now 54% of our total mobile subscriber base. Rising customer appreciation, retention campaigns, and the added value of our digital services portfolio resulted in a mobile churn rate of 4.2%. Our fiber business, which is our focus in the fixed segment, continued to grow with 44,000 net additions. The number of subscribers currently enjoying the TV+ experience rose by 29,000 this quarter.
Mobile blended average revenue per user in Q1 grew by 10.2% to TRY 33.6. Successful execution of our digital services focus strategy, upsell performance, price adjustments, increased share of triple play subscribers, and the larger postpaid subscriber base have all supported the rising ARPU trend. Fixed residential ARPU rose 4.1% year-over-year due to increasing multi-play with TV users. Next slide. Let me provide further details on data and digital services, the main drivers of our strategy and growth. Turkcell Turkey's strong performance is mainly due to demand for data and digital services, boosted the growing demand for 4.5G. Average mobile data usage rose 47% in a year to 4.4 GB per user in Q1. The main driver of this increase is the rising consumption of 4.5G users, which reached 6.1 GB per user in March. 4.5G users consume two times more data than the other users.
Out of 31 million customers signed up for 4.5G services, only 16 million today have 4.5G compatible smartphones. This indicates that we still have a potential to double the number of 4.5G users on our network. Tapping into this potential, we have been adding almost 1 million new 4.5G compatible smartphones to our network each quarter, and this quarter we saw the continuation of the same trend. Next slide. Let's look at our performance in monetizing our data and digital services. Total data and digital services revenues grew 16% year-on-year to TRY 2.8 billion in Q1. This growth was fueled by higher mobile data usage, rising smartphone penetration, and a larger customer base. The revenues from digital publishing, TV+, fizy, lifecell, and other digital services have also contributed to this growth. Accordingly, data and digital services revenues, the largest contributor, accounted for 67% of Turkcell Turkey revenues in Q1.
Next slide. In Q1, customers increasingly preferred our services and multi-play ratios continued to rise. 59% of our mobile subscribers use at least one of our digital services, with a 16 percentage point rise from 42% in the first quarter of the same period last year. Rising 14 percentage points year-on-year, 75% of our mobile revenues are from triple play customers. These customers, on average, generate three times the ARPU of a single play customer. On the fixed side, nearly 46% of every 100 fiber residential subscribers have subscribed to our IPTV services. Next slide. Reflecting our 1,440 minutes vision, the number of minutes in a day, aimed at positioning ourselves to meet all communication and digital service demands, we continuously monitor customer engagement levels.
Currently, in addition to 31 minutes of GSM calls on our networks, our customers spend 56 minutes on the TV+ application watching TV, 26 minutes reading Dergilik, which is on our digital media publishing platform, 23 minutes listening to music on our music platform, fizy, and the call time for voiceover IP customers on BiP, our instant messaging platform, is an additional 35 minutes. We aim to introduce new services, as well as increase the time spent on existing services through new features and offers. Next slide. Look at the key KPIs of our services. With 19.3 million downloads to date, BiP has 4.4 million active users as of end of Q1. BiP marked a first for the sector by launching domestic money transfer without the need for a bank account. BiP now also enables international money transfers in 57 countries.
UpCall, which combines an enhanced calling experience with secure phone book, reached 2.7 million downloads. 401,000 customers actively use this service on a daily basis. Our digital publishing application, Dergilik, reached 5.3 million downloads. A monthly average of 7.3 million customers enjoys the benefits it offers. The application now is available in Northern Cyprus and Germany with local content. Over seven million songs are streamed on a daily basis on our music platform, fizy, which has 1.9 million active users. 1.4 million monthly active users on our TV+ application has 2.5 million session logins per day. lifebox, enhanced by face recognition, object, and venue recognition technology, has 1.3 million active users. This is our consumer cloud offering. My Account, our key tool to digitalize our connection with our customers, currently has 19.2 million monthly active users. My Account users have a 33% greater ARPU and less churn.
Search engine Yaani, which enables 1.2 million search per day, has registered 4.3 million downloads to date. Next slide. Let's have a deep dive into lifecell, our data-only offering built on our digital services and mobile data platform. Our digital brand, lifecell, with its unique digital services proposition, has now 468,000 subscribers. Two out of every three postpaid lifecell users are new customers, and we welcome them to our world of enhanced digital experience for the first time through lifecell. A lifecell subscriber generates 1.5 times the ARPU of an average Turkcell subscriber. Digital services data usage of a lifecell subscriber is four times that of a Turkcell subscriber. lifecell users consumed 50% more data than an average 4.5G user, reaching nine gigabytes in March. Next slide. Gaming is an attractive market which we have started to serve with BiP Gaming.
This quarter, we took another step with our new platform, Playcell. Our aim is to become the largest gaming platform in Turkey. We have a segmented approach based on age. Playcell, recently launched, is a safe zone for kids up to age of 10. Playcell, with hundreds of games, exceeding 700,000 unique visitors in a very short time. In addition to 1.2 million users of BiP Gaming, this number brings our total gaming customers to 1.9 million in March. Gamecell and Kahve League, the gaming platforms for teenager and adult segments, respectively, are coming soon. Next slide. Looking to our TechFin services. Financell, our consumer finance company, continued its steady growth in Q1 with an 82.7% revenue increase and more than doubling net income year-on-year. Net income increase was mainly due to portfolio growth, insurance services revenue, and increasing net interest margin.
Financell's customer loan portfolio reached TRY 4.4 billion, including the contracted handset receivables of Turkcell. Total receivables from handset financing rose TRY 0.1 billion during the quarter. The TRY 100 million asset-backed securities issued in February helped reduce additional working capital needs. We plan for a further TRY 100 million issuance in Q2, and ultimately a total up to TRY 500 million in 2018. Paycell, our mobile payment services company that offers differentiated payment options, is seeing traction from 5 million customers. Users registered 1.4 million credit cards on Paycell app in Q1. The app itself has seen a doubling of downloads, reaching more than 800,000. We note a quarterly transaction volume of TRY 175 million. Paycell services, already available in the Turkish Republic of Northern Cyprus, will also be introduced in Ukraine. Next slide. This brings us to Turkcell International performance in Q1.
Turkcell International generates 5.9% of our group revenues. Our operations grew by 12.6% year-on-year to TRY 279 million in Q1, with an EBITDA margin of 33.2%. lifecell in Ukraine contributes 60% of our international business. With the rise in mobile data services, lifecell's revenues climbed to 5.1% in TRY terms. EBITDA margin came in at 41.6%. At the 4G tenders in Ukraine, lifecell was awarded a total of 30 megahertz frequency band, for which it already paid nearly $70 million, including the conversion fees. lifecell is the first and only operator to offer 4G services in all 24 oblast city centers in Ukraine. In Belarus, BeST revenues rose 23% with an EBITDA margin of 18.2%. Higher data and digital services usage with 4G-led revenue growth, digital magazine, music, TV+, and gaming services are the key contributors to digital services revenue.
Our Turkish Republic of Northern Cyprus operation, Kuzey Kıbrıs Turkcell, saw 20.2% year-on-year growth with a 32.4% EBITDA margin. In Q1, we added five Northern Cyprus newspapers to our digital publishing application. In Germany, we rebranded Turkcell Europe as lifecell Europe, in line with our global digital experience provider strategy. Through lifecell Europe, we introduced our digital music platform, fizy, digital publishing app, Dergilik, and also personal cloud application, lifebox, to the German market. Next slide. In February, we unveiled our subsidiary, Lifecell Ventures, to a global audience in Barcelona at the GSMA Mobile World Congress. We have positioned Lifecell Ventures as the franchise holder for our digital services for other operators around the world. We aim to act as a digital enabler to other operators.
We have already signed our first agreement with Moldcell in Moldova for lifebox, and we are about to finalize our talks for BiP. Data sovereignty is a rising issue. Our digital services, which are available through Lifecell Ventures, give other operators the capabilities to control and process locally created data in the countries that they belong. We view this as a vital aspect of our digital internationalization strategy. Next page. On March 14, we hosted a Capital Markets Day in Istanbul with the participation of 340 guests, where our executive management team delivered our midterm strategy. Meanwhile, the guests had the opportunity to hear the macroeconomic presentation given by Murat Çetinkaya, the Governor of the Central Bank of Turkey. At the meeting, we announced our upward revised midterm guidance.
We now target revenue growth of 14%-16% and an EBITDA margin of 37%-40%, and operational CapEx over sales ratio of 18% towards 16% over the next 3 years. We have also revised our 2018 guidance previously disclosed with our Q4 2017 results. Looking at our Q1 performance, we are confident of meeting our targets. Next slides. On March 29, we held annual general assembly meeting for the year 2017. At this meeting, shareholders approved the distribution of TRY 1.9 billion dividends. This corresponds to 6% dividend yield for 2017. Upon completion of the payments in three installments, we will have distributed 60% of our net income cumulatively since 2010. We are happy to fulfill our dividend policy and our promise to our shareholders. Meanwhile, three representatives of our major shareholder, Turkcell Holding, have been elected to the Turkcell Board of Directors.
We appreciate both of these decisions, and we believe favoring all of our shareholders. I will now leave the floor to our Chief Financial Officer, Bülent. Bülent?
Thank you, Kaan. Good afternoon, and good evening to all parties. Let's take a closer look into the financials. In Q1, group revenues rose 17.5% year-on-year to TRY 4.8 billion. This was mainly from the higher data and business services revenues of Turkcell Turkey, the additional TRY 96 million from consumer Financell company, and the incremental TRY 31 million from Turkcell International. EBITDA rose by 44.4% year-on-year to TRY 2 billion, with a margin of 42.5%. Operating leverage, as well as the reorganization of sales channels and accretive EBITDA by Financell are the main contributors to the organic growth of EBITDA. In addition to the organic growth, IFRS 9, 15, and 16 changes made a positive TRY 323 million contribution to this rise.
The contribution of IFRS changes to our financial is stronger than our peers, and this difference is mainly due to prudent receivables management and decreased churn. Operational performance impact on organic EBITDA, as well as on the IFRS changes, led to a nearly two percentage point margin expansion. This result give us confidence that we will fulfill our target. Next page. In this quarter, net income rose 9.2% to TRY 501 million. The TRY 622 million higher EBITDA was partly offset by a TRY 351 million higher depreciation and amortization expenses, mainly due to IFRS 15 and 16 impacts amounting to TRY 271 million. Net income was also impacted by higher interest expenses related to higher loan amounts compared to last year due to Turkcell Financell, and the TRY 64 million rise in FX losses after the impact of swap contracts. Next page.
Now, I would like to talk about our balance sheet and leverage details. Our group net debt at the end of quarter was TRY 9.4 billion, with a leverage of 1.5 times. Meanwhile, our telco only net debt position was TRY 5 billion, 0.8 times of EBITDA. The TRY 1.5 billion rise in telco net debt was mainly resulting from due payables related to the CapEx payment of Q4 2017, and frequently use fee payment for prepaid subscribers. Next page. Global investor confidence in Turkcell was again affirmed by the outcome of a 10-year EUR bond issuance effort. We are pleased to see our bond was oversubscribed by 2 times, despite investor caution and market volatility. Listed on the Irish Stock Exchange, our $500 million issues had a 5.8% coupon rate.
Since its last issuance in 2015, Turkcell remains the only Turkish company to have tapped the corporate bond market with a 10-year maturity note. This is also the only Turkish issuance in 2018 with investment-grade ratings. Next slide. Let me give you an overall summary of our consolidated cash flow. The major items of the quarter include an EBITDA of TRY 2 billion, capital expenditure of TRY 720 million, of which TRY 530 million was related of Turkcell Turkey. Net interest income of TRY 181 million, net change in borrowings of TRY 691 million. Main items in other cash flow are TRY 1.2 billion decrease in trade payables, TRY 545 million frequency usage fee paid for prepaid customers and other tax payments, and TRY 286 million increase in trade receivables. Next slide. Now, I will go into the management of foreign currency risk.
As a hedging mechanism, we hold 69% of our cash in hard currency. In addition, we use cross currency swap transactions to convert a large portion of our long-term foreign currency debt to fixed rate local currency liabilities. After hedging with swaps, the share of FX debt falls from 79% to 35%. Excluding the $95 million FX position stemming from rent lease obligations related to IFRS 16, we reduce our short FX position from $144 million to $109 million as of Q1, significantly below our comfort zone of $500 million. Next page. As announced earlier, we decided to exit Fintur together with our partner, Telia. We are glad to have completed the sale of both Geocell in Georgia and Azercell in Azerbaijan in this quarter. This transaction had no impact on our financials as our Fintur stake had already been classified as asset for sale.
Meanwhile, we are seeing continuous progress in the efforts for the sale of the remaining two operations, with interest received from several parties. We will keep the investor community informed on related developments. This is the end of our presentation. We are ready to take your questions.
Thank you. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question. We'll take our first question from Ivan Kim with VTB Capital.
Yeah, good afternoon. Two questions from my side, please. Firstly, your ARPU, both, let's say blended ARPU, if we look at that, or postpaid ARPU in Turkey, have accelerated growth-wise in the first quarter of 2018 compared to the last quarter of 2017. I was just wondering what has been driving that. Secondly, a question on your trade payables reduction, which was TRY 1.2 billion negative effect on your cash flow. I think you mentioned most of it is related to CapEx from fourth quarter 2017, but I was just wondering how seasonal it is, how much of it is CapEx related, and what should we expect sort of on a normalized basis from trade payables. Thank you.
Ivan, thank you very much. With regard to your first question, ARPU side, I'll take it, and then I'll ask Bülent to answer on the second one. On the ARPU side, there are multiple factors to it, but the most important one is our inflationary pricing strategy and price corrections to our products. More importantly, the percentage of triple play customers are increasing, the percentage and number of 4.5G customers are increasing, and we are getting new lifecell customers at higher ARPU levels. All these things contribute to the growth of ARPU, which is, as we have always committed, above the inflation rate in Turkey. If you look to our fixed ARPU rates, you will see slightly less increase. One of the reasons for that, while on the mobile front, the changes in the taxation of special communication tax has been neutral.
On the fixed side, there is a direct increase of 2.5 percentage points in taxation from 5% to 7.5%, which actually reduces our ARPU increase in the fixed side to single digits. On the 1.2 billion.
Yeah, TRY 1.2 billion decrease in trade payables, as you said, that's directly related with the CapEx payments of the last quarter 2017. This is a seasonal factor. In the first quarter, our trade payables declined by TRY 0.7 billion in 2017 to increase later on. It is directly related with the seasonal movements in trade payables.
Yeah, I mean, it was less, right? It's almost two times less than the first quarter 2017. I appreciate the CapEx was probably a bit higher in fourth quarter 2017 versus fourth quarter 2016. Let's say, apart from the vendor payments, there is nothing else in this number, yeah?
Yeah. As you mentioned that in the last quarter of 2017, the total CapEx of the group was higher than the previous quarter, and almost 88 percentage points. The first quarter of 2018, there is a higher decrease in the trade payables. We believe that this will be normalized in the coming terms. Regarding the CapEx side, as we mentioned in our guidance, it will be around 18%-16% in this year.
Okay. Thank you.
Regarding your second question, there is nothing else in this side, vendor payments. This is purely related with the CapEx side, the vendor payments to them.
Thank you, Ivan.
As a reminder, that is star one for any questions. We'll pause for a moment to allow everyone the opportunity to signal. We'll go next to Vyacheslav Degtyarev with Goldman Sachs.
Yes, thanks for the call. Actually it seems like the share of data and digital revenues have stabilized. What are the reasons for the data and digital growth deceleration, in your view, and how we should be looking at the growth of the segment in the medium term? Do you think that this 67% share is stable? Also secondly, on your guidance for the full year, it seems like you're running well ahead of the full year guidance on both revenues and margins. Do you somehow expect any substantial deceleration in second quarter or second half of the year? Thank you.
Slava, thank you very much. With regard to the data and digital services growth rate and the percentage of that as it contributes in the total sales, which is almost close to 70. Let me highlight one thing. I refer to our 2-year cumulative growth rate of the top line as 48%. If you look to the 2-year cumulative data and digital services growth rate, it is 126%. Actually we are very comfortable with the level of the growth and the momentum. If I look to the future and when I look to that 95% of our investments are about data, 97% of the customer's consumptions, if you look, is the data. I expect the percentage of data and digital services in terms of contribution to our sales to grow from the current levels of 67% as we move into the next 3 years.
Of course now the data and digital services are becoming the dominant contributor to the overall sales. The differentiation of the average growth and the growth of the data and digital services will ultimately converge to each other. I would like to highlight the 2-year cumulative data and digital services growth of 126% from where it was. This is actually a level that we feel quite happy with. Now looking to our current performance, which is 17.5%, our guidance for the next 3 years on midterm and for this year was in between actually 14 to 17. This is actually we consider in line with our expectations, and we are sticking to our original guidance as indicated.
Okay, thank you. With regard to margins, are you also on track? Basically, I think some slight deceleration in the next 9 months.
Of course, this is the impact of IFRS changes 9, 15, and 16. If you look to these changes, actually these are giving, I think, more clarity and transparency into the midterm to long-term liabilities of corporations. I actually like the fact that they are reflected in this way now in the balance sheet. Also it is a reflection of customer retention capabilities of companies. You have certain type of hidden assets and hidden liabilities now reflect better in the financials in the company. Frankly speaking, the improvement of our churn rates and also the efficiency of our debt management and risk management in terms of receivables have contributed slightly higher than we expected, but we still stick to our 37%-40% margins for the next three years. We are not changing that as of this time.
Okay, thank you.
Thank you.
We'll take a follow-up question from Ivan Kim with VTB Capital.
Yes, just maybe a couple more questions, please. If I look at the active users of some of your applications such as fizy, Dergilik, for example, there is some even small reduction quarter-on-quarter if I compare it to fourth quarter of 2017 in terms of active users. I was just wondering why is that? Is it due to seasonality or you are seeing some sort of flattening out of growth there? Secondly, on the Geocell and Azercell sale proceeds, I just wanted to make sure that those have not been upstreamed to Turkcell level yet, right? They have been sort of received at the holding level where you sold it. Thank you.
Yes. Starting with your second question, you are right. These are still part of the Fintur balance sheet and results. They have not been upstreamed to us yet. We expect that to happen after all the assets are sold and finalized. Hopefully this will happen during this fiscal year. Looking to our active numbers, actually, I think last quarter we reported as 7 million active users, monthly active users on Dergilik which is now 7.3 million. This was actually impacted by the Q4 end of year campaigns. We do not see actually a slowdown, but we see a steady growth. If you think about 1 million additional smartphones added to our network, 300,000 new active subscribers actually is something that we are comfortable with.
We hope also with the launch of Dergilik in other markets, including Ukraine, Cyprus, and Germany, this will increase the initial pickup rates in those countries as well.
Yeah. It can be. If we look at other things, for example, for fizy, there is a small reduction. There is 0.1 million subscriber active customer reduction in the numbers. Is it, you think, just seasonal? Is it something temporary or?
Mostly it is the impact of campaigns, especially for TV.
Yeah.
At the year-end, we had made a couple of campaigns to increase the trial period. Those are the impacts of actually those campaigns that we see on a seasonal manner.
Got you. Okay. Thank you.
Thank you.
We'll go next to John Kim with Deutsche Bank.
Good evening, everyone. If I can take you back to page 10 of the presentation on the applications. Can you give us a sense on either active user base or downloads that come from app users that are not Turkcell customers? Thank you.
Of course, for each one of these applications, the ratio of non-Turkcell customers can differ, but it is somewhere in the region of 15%-35%, depending on the nature of the application. Actually, all our applications are all access, and all the features are available to other operators' customers as well. There are some limitations on UpCall, where some enhanced feature set with regard to caller identification is only available for Turkcell customers due to our IMS systems. Of course, My Account, which is our self-service application, doesn't have any non-Turkcell customers.
Do you notice a meaningful difference between Turkcell and non-Turkcell customers in terms of adoption, retention, conversion rates?
We naturally have larger abilities to promote our applications to our own customer base, but we are also very happy to see that especially our newly launched Yaani has been also greatly appreciated by non-Turkcell customers. Same thing is true for fizy and Dergilik, and also BiP.
Okay. Thanks. Helpful.
Thank you.
As a reminder, that is star 1 for questions. We'll pause for another moment. We'll go next to Vera Sutedja with Erste Bank.
Good evening, everybody. Thank you for taking my question. I have just one question related to your translation loss, TRY 494 million. Could you please elaborate a bit, as I thought that your short position actually gets smaller, but the FX loss seems to get bigger. Would you mind to elaborate what drives this? Is there certain contracts causing a one-off in there or anything else that we have to take care about? Thank you.
Bülent, can you take that?
Regarding translation losses, first of all, due to the fair value of the swap contracts, there is a loss because of the volatility in the market condition. The other main part is related with the swap transaction interest expenses because of the increasing interest expenses and accrued interest costs in our swap contracts. Actually, as I mentioned, that this is directly related with our swap contracts and due to the volatility in the market conditions.
You mean the interest swap contract?
The swap contracts, because of our cross-currency swap transactions.
Okay.
Korhan, I think Murat from HSBC has a question on the web. Am I right?
Yes.
Let's take that one as well.
Very impressive growth, even in IFRS-adjusted terms. My question is regarding why this strong operating growth is not reflected on net earnings. You do not share detailed P&L items in quarter of the financials. As financial expenses changed from TRY 100 million to TRY 300 million. Can you give us more detail about the financials?
Bülent, please explain. I can only tell that the corporate tax has been moving up from 20% to 22%, but remaining, maybe you can give more color.
Yes. As you mentioned that the first reason related with the decrease in the net income side related with the increase of the corporate tax from 20% to 22%, and the other one is related with the fair value of the swap contracts due to the volatility in TLUSD, stemming from our cross-currency swap transactions and the contracts. The main part came from this contract.
As a reminder, that is star one for any questions over the phone lines. We'll go next to Hervé Drouet with HSBC.
Yes. Good afternoon. Yeah, questions back as well, back to the FX and the FX impact, I'm sorry, to try to get a bit more information on that. I was wondering, those swap contracts you have, can you disclose which corridor, basically, those swap are effective in term of FX? If you can give us a band where you believe you have a relatively hedging. Is it over a certain corridor band on the FX side?
Thank you very much, Hervé. Bülent will give you the information.
Regarding euro and Turkish lira up to TRY 9.5, and euro dollar and Turkish lira up to TRY 6.80, we have a upper band. Higher the upper band, we have a sharing mechanism between the bank and the hedging party. There is no lower band in our contract regarding the swap contract.
Right. Okay. I'm trying to get is what we saw in Q1, because compared with what I was expecting, especially on the FX, is a bit significantly higher compared with what I've seen before. I was wondering, did you have to re-enter into a new type of contract that may explain it? I'm trying to find out where, from my estimation on FX, I could be a bit out of band compared with what you reported. I was wondering, have you changed a bit the way the contract has been set up in Q1?
No, we have no any plan to change our contract set up. We believe that this protects our position. There is no any planning for the new leverage or borrowings for the end of this year. We are not planning to make a new swap contracts for additional leverage or additional borrowings from the market. The last one is our bond issue. We received the proceed. We have enough cash to refinance the upcoming loan repayments. We have no any plan to additional leverage.
Okay. In terms of your consolidated cash you received, you disclosed basically how in U.S. dollar and in euro, at the moment, the consolidated cash is. If there are new proceeds to come, let's say, from Financell, in which currency that will be held?
Some of them will be in euros and some of them in U.S. dollar, at that stage, it's not possible to disclose these details.
Okay. All right. Thank you.
It will be hard currency.
It will be hard currency. Okay.
Thank you, Hervé.
Thank you.
As a reminder, that is star one for questions. We'll pause for a moment. With no further questions, I would like to
So it looks like-
Please go ahead.
I think we have the questions. Thank you very much, everyone, for joining us on this call, and looking forward to seeing you at the next quarterly call. Thanks.
This will conclude today's call. Thank you for your participation. You may now disconnect.