Tencent sees first-ever annual revenue decline in FY 2022

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Tencent saw its revenue in the fourth quarter of financial year 2022 plateau year over year, logging a 0.5% rise to US$20.8 billion. Meanwhile, its full-year revenue fell by 1%, marking its first-ever decline since the company went public in 2004.

However, after increasing its focus on core businesses and revenue lines such as international games last year, the tech giant expects to benefit from a rebound in China’s economy, “which our users’ activity suggests is now underway,” said chair and CEO Ma Huateng.

Tencent will also invest in AI and cloud computing to help it expand and create new product offerings, he added. Right now, the company is playing catch-up with Baidu’s Ernie, which impressed testers in a demo earlier this month.

In the quarter, revenue from its domestic games fell by 6% to 27.9 billion yuan (US$4.05 billion), while international games revenue grew 5% to US$2.02 billion. This came after Tencent increased its stake in Assassin’s Creed maker Ubisoft and bought a 30% stake in FromSoftware, the company behind the Dark Souls series.

See also: Tencent’s financial health in 5 charts

The Chinese tech titan’s non-IFRS operating profit also jumped 19% to US$5.7 billion in the quarter compared to the same period last year. On the same basis, profit attributable to equity holders was at US$4.3 billion, also a 19% bump year on year.

For the full year, operating profit came in at US$33.8 billion, a 13% decrease from 2021. Profit attributable to equity holders also saw a 16% drop to US$27 billion.

Currency converted from yuan to US dollar: US$1 = 6.88 yuan.