SHENZEN, China (CelebrityAccess) — Tencent Music Entertainment Group, China’s leading music streamer, revealed disappointing results for the second fiscal quarter of 2022, with a drop in revenue, and net profits.
Tencent Music reported revenue of RMB6.91 billion (US$1.03 billion) for the quarter, a decline of 13.8% from the same period in 2021 but an improvement of 3.9% over the first quarter of 2022.
Profits also took a hit during the quarter, with net profits of RMB892 million (US$133 million) and non-IFRS profits of, RMB1.07 billion (US$159 million), amounting to an 8.3% decline from the same period in 2021.
Other key metrics flagged as well, including monthly active users for Tencent’s mobile music services, which were off by 4.8% year-over-year and monthly average revenue per user, which slid by 5.6% during the quarter to 8.5.
However, there were some bright spots, including paying music subscribers, which increased from 66.2 million in the second quarter of 2021 to 82.7 during the quarter this year, representing an improvement of 24.9%.
“Amidst a complex and evolving environment, macro headwinds continued to affect our total revenue growth. However, growth in subscription revenue remained resilient, increasing by 18% year-over-year in the second quarter, demonstrating our success in executing a balanced approach of driving growth in both paying users and ARPPU. Meanwhile, our cost optimization and operating efficiency enhancements continued to bear fruit, resulting in margin improvements during the quarter,” said Mr. Cussion Pang, Executive Chairman of TME.
“In June 2022, we celebrated the first anniversary of launching our dual engine content-and-platform strategy, which has continued to empower our increasingly vibrant music ecosystem. Through original content production and our Tencent Musician Platform, we are not only enhancing the scale, quality and market appeal of our content, but also nurturing creators and connecting them with music lovers. We will continue to empower music creators by helping them to unlock both the cultural and commercial value embedded in music. To demonstrate our confidence in the Company’s prospects, by the end of the second quarter, we had completed over $700 million of the $1 billion share repurchase program announced last year, and plan to complete the rest of the program throughout the rest of the year,” he added.
