Tencent reported higher results for the second quarter, helped by growth across all business lines but particularly Business Services and advertising. Game revenue meanwhile benefitted from international growth following stricter regulation in its home market China.
Revenues for the quarter rose 20 percent from the year before to CNY 138.3 billion (USD 21.4 billion). The EBITDA improved by 10 percent to CNY 44.6 billion, with the adjusted EBITDA going up 15 percent to CNY 50.3 billion. The net profit increased by 29 percent to CNY 42.6 billion, resulting in diluted earnings per share of CNY 4.387.
VAS revenues increased 11 percent to CNY 720 million. Games revenue grew 12 percent CNY 43.0 billion, mainly driven by more revenues from Honour of Kings, PUBG Mobile, Valorant, Clash of Clans and Moonlight Blade Mobile, partially offset by a decrease in revenues from Peacekeeper Elite. Mobile games VAS revenue went up by 13 percent to CNY 40.8 billion, while PC client game revenues rose 1 percent to CNY 11.0 billion.
Social network revenues climbed 9 percent to CNY 29.0 billion, mainly due to growth at digital content services and from in-game virtual item sales. Revenues from online advertising went up by 23 percent to CNY 22.8 billion. Revenues from FinTech and Business Services climbed 40 percent to CNY 41.9 billion.
The number of monthly average users for Weixin and WeChat reached 1.251 billion, up from 1.241 billion at end March and 1.206 billion the year before. Users for QQ meanwhile fell to 590.9 million from 606.4 million and 647.6 million respectively.
Capex slipped 27 percent from the year earlier to CNY 6.9 billion while the free cash flow declined by 39 percent to CNY 17.3 billion. The company’s net debt position at end June amounted to CNY 21 billion.
