Tencent Holdings announced its first quarterly revenue drop on Wednesday, hampered by a Chinese government crackdown, Covid-19 lockdowns and a weakening economy that has impacted ad marketing.
The company said on Wednesday that revenue fell 3% to 134 billion yuan ($19.78 billion) in the three months ended June 30, from 138.3 billion yuan a year earlier.
“During the second quarter, we actively exited non-core businesses, reduced our marketing spend and lowered operating expenses,” said Ma Huateng, Tencent’s chief executive.
Net income attributable to shareholders fell 56% to 18.6 billion yuan, below analysts’ estimate of 25 billion yuan.
The company has lost nearly 60% of its market value since hitting highs in February 2021, amid Beijing’s regulatory crackdown to curb the influence of big internet companies.
However, the $373 billion company remained China’s most valuable.
Online gaming revenue, Tencent’s biggest profit driver, declined both domestically and abroad, down 1% each.
Tencent has yet to receive a new gaming license from Chinese regulators after temporarily halting approvals.
The company’s social networking services saw a 1% increase in revenue as WeChat made more from video.
Tencent reported 18.6 billion yuan in ad revenue in the second quarter, down 18% as advertisers remain cautious with their budgets, but it wasn’t as bad as some analysts had predicted, according to Shawn Yang, managing director at Blue. Lotus Capital Advisor.
Fintech and business services revenue growth slowed to 1% at 42.2 billion yuan due to the impact of lockdowns on business activities.
Source: CNN Brasil
