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Tencent Posts Worst Quarterly Profit Drop Since Listing

By Clarence Leong

 

Tencent Holdings Ltd. said Wednesday that its second-quarter net profit fell 56% as weakness in its gaming and advertising segments weighed on revenue.

The Chinese social-media and videogame giant posted a 18.62 billion yuan ($2.74 billion) net profit for the quarter ended June compared with CNY42.59 billion a year earlier, it said in a filing. That represents Tencent’s worst quarterly profit drop since listing in Hong Kong in 2004, surpassing the first quarter’s 51% net-profit decline.

Revenue came in at CNY134.03 billion, down 3% from a year earlier. Contribution from its videogaming business in China slipped 1% to CNY31.8 billion, which it attributed to “transitional issues, including relatively fewer big game releases, lower user spending” and minor-protection measures.

Its online-advertising segment revenue fell 18%, which Tencent said reflected “notable weakness in the Internet services, education and finance sectors, especially in April and May.”

Its fintech-and-business services segment eked out a 1% revenue gain to CNY42.2 billion, as the Covid-19 resurgence weighed on commercial-payment activities in April and May, Tencent said.

The company said it will focus on enhancing the efficiency of its businesses and on new revenue initiatives.

 

Write to Clarence Leong at clarence.leong@wsj.com

 

(END) Dow Jones Newswires

August 17, 2022 05:17 ET (09:17 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.

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