Tencent Announces 2019 First Quarter Financial Results

Tencent Holdings Limited, a leading provider of Internet value-added services based in China, announced on Wednesday its financial results of 2019’s first quarter.

According to Ma Huateng, Chairman and CEO of Tencent, Tencent sustained “healthy user engagement” across its key platforms and saw notable growth in the number of short videos uploaded and shared by users on QQ and Weixin.

“Our payment, other FinTech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues, and we are consequently disclosing their results in our new FinTech and Business Services segment, demonstrating our success in organically incubating services with long-term growth potential. We believe that we are building solid foundations for future growth in both the Consumer and Industrial Internet domains.”

Key quarter financial highlights include:

Revenues: +16% YoY, non-GAAP profit attributable to equity holders of the Company: +14% YoY

  • Total revenues were RMB85,465 million (USD12,693 million[1]), an increase of 16% over the first quarter of 2018 (“YoY”).
  • Operating profit was RMB36,742 million (USD5,457 million), an increase of 20% YoY. Operating margin increased to 43% from 42% last year.
  • Profit for the period was RMB27,856 million (USD4,137 million), an increase of 16% YoY. Net margin was flat at 33%.
  • Profit attributable to equity holders of the Company for the quarter was RMB27,210 million (USD4,041 million), an increase of 17% YoY.
  • Basic earnings per share were RMB2.877. Diluted earnings per share were RMB2.844.
  • On a non-GAAP[2] basis, which excludes certain non-cash items and certain impact of M&A transactions:
    • Operating profit was RMB28,470 million (USD4,228 million), an increase of 13% YoY. Operating margin decreased to 33% from 34% last year.
    • Profit for the period was RMB21,673 million (USD3,219 million), an increase of 13% YoY. Net margin decreased to 25% from 26% last year.
    • Profit attributable to equity holders of the Company for the period was RMB20,930 million (USD3,108 million), an increase of 14% YoY.
    • Basic earnings per share were RMB2.213. Diluted earnings per share were RMB2.187.

Other Key Financial Information are:

  • Share-based compensation was RMB2,033 million, up 25% YoY.
  • EBITDA was RMB33,566 million, up 15% YoY. Adjusted EBITDA was RMB35,598 million, up 15% YoY.
  • Capital expenditure was RMB4,506 million, down 29% YoY.
  • Free cash flow* was RMB23,933 million, up 72% YoY.
  • As at March 31, 2019, net debt position totalled RMB9,595 million. Fair value of our stakes in listed investee companies (excluding subsidiaries) totalled RMB310,712 million as at March 31, 2019.
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