Tencent makes 10.3b yuan profit on back of advertising revenue

China's Tencent recorded a second quarter profit of 10.3 billion yuan, raking in over 4 billion yuan in online advertising revenue, and in future wants to keep its games department busy.
Written by Asha Barbaschow, Contributor on

Shenzhen-based Tencent has recorded a second quarter unaudited earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 10.3 billion yuan, up 28 percent from the same quarter last year.

Online advertising was the big winner this quarter for the Hong Kong-listed Tencent, raking in 4 billion yuan in revenue, just under double its 2Q2014 result. The company said over 50 percent of its advertising revenue was generated on mobile platforms.

Total revenue for the period also grew to the tune of 19 percent, generating 23.4 billion yuan in revenue for the media and entertainment provider.

"During the second quarter of 2015, we sustained our leadership across our social, games and media platforms, while achieving another quarter of solid financial results," chairman and CEO Ma Huateng said.

"Operationally, we made notable progress across our portfolio of mobile utilities, with our mobile security solution, browser, and app store moving into industry leadership positions."

For the quarter, QQ -- Tencent's instant messaging service -- boosted its monthly active user accounts by 2 percent, to 843 million, whilst WeChat -- known as Weixin in China -- reported 600 million users, up 37 percent from the same time last year.

"We reported rapid growth in online advertising revenue, benefiting from expanded social performance advertising and video advertising. We look forward to continuing to deepen our relationship with strategic partners in various verticals and to develop new services that bring the best experiences to our users," Ma said.

In the second quarter of 2015, Tencent's social network business achieved 18 percent year-on-year revenue growth, with smartphone game revenue climbing 11 percent from the same time last year to approximately 4.5 billion yuan.

Tencent told shareholders that looking forward it intends to launch PC game titles such Monster Hunter Online and Moonlight Blade, and to extend its existing PC games such as FIFA Online 3 into mobile games.

In February, Tencent was ordered to cease its lottery sales, with the General Administration of Sport of China banning the activity online.

At the time, the authority said it would come down firmly on those selling online lotteries and that in cooperation with the police and other administrative departments, it would crash the illegal business.

Rival e-commerce giant, Alibaba, posted its first quarter results on Thursday, reporting a first quarter profit of 10.6 billion yuan, and recording 673 billion yuan in product sales transacted via its online marketplace.

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