Tencent (TCEHY) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 18, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to Tencent Holdings Limited 2022 First Quarter Results Announcement Conference Call. At this time, all participants are in listen-only mode. After speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today’s conference is being recorded. [Operator Instructions]

And now, I would like to turn the conference over to Ms. Wendy Huang from Tencent IR team. Thank you. Please, go ahead.

Wendy Huang

Thank you, Operator. Good evening. Welcome to our 2022 first quarter results conference call. Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties and may -- realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Tencent.

This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, measures of the group's financial performance prepared in accordance with IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website.

Let me introduce the management team on the call tonight. Our Chairman and CEO, Pony Ma, will kick off with a short overview; President, Martin Lau; and Chief Strategy Officer, James Mitchell, will provide a business review; Chief Financial Officer, John Lo, will conclude with financial discussion, before we open the floor for questions.

I will now turn the call over to Pony.

Pony Ma

Wendy, good evening. Thanks everyone for joining us. During the challenging first quarter of 2022, we implement cost control initiatives and rationalized certain non-core businesses, which will enable us to achieve a more optimized cost structure going forward. We utilized tools such as Mini Programs, Tencent Meeting and WeCom to help enterprises and consumers with the resurgence of -- in China and continue investing in strategic growth areas including enterprise software, Video Account and international games. Looking forward, we will sharpen our focus and sustain our innovation through challenges and cycles, and continue to -- value for our users, partners and society.

Now let me go through the headline financial numbers for the quarter. Total revenue was RMB135 billion largely stable year-on-year or down 6% quarter-on-quarter. Gross profit was RMB57 billion, down 9% year-on-year and 1% quarter-on-quarter. Non-IFRS operating profit was RMB37 billion, down 15% year-on-year or up 10% quarter-on-quarter. Non-IFRS net profit attributable to equity holders was RMB26 billion, down 23% year-on-year or up 3% quarter-on-quarter.