Chinese internet giant Tencent inched back into profitability in Q3, but revenue continued to slide with declines in advertising, domestic games and social networks offsetting gains in overseas games and fintech services.
In a statement, chairman and CEO Pony Ma explained Tencent achieved year-on-year growth after four quarters of decline, a result of introducing in-feed adverts in video accounts, breakthroughs in international game releases, and executing cost efficiency initiatives which refocused the company on core activities and controlled costs.
Net profit was up 1 per cent year-on-year to CNY39.9 billion ($5.6 billion) as investment gains were down 9 per cent to CNY20.9 billion. Total revenue fell 2 per cent to CNY140.1 billion.
Selling and marketing expenses decreased 32 per cent to CNY71.1 billion.
Domestic games revenue dropped 7 per cent to CNY31.2 billion while international rose 3 per cent to CNY11.7 billion.
Social networks sales decreased 2 per cent to CNY29.8 billion.
Online advertising fell 5 per cent to CNY21.5 billion. Chief strategy officer James Mitchell noted on an earnings call the rate of decline dropped from 18 per cent in Q2, benefitting from in-feed adverts in video accounts.
Fintech and business services grew 4 per cent year-on-year to CNY44.8 billion, on a recovery in on and offline commercial payment activities.
Combined monthly active users (MAUs) of messaging service WeChat and Chinese version Weixin increased 3.7 per cent to 1.3 billion.
MAUs on its QQ mobile messaging platform were flat at 574.4 million.
Capex declined 66 per cent to CNY2.4 billion.