Tencent Music Entertainment Group Announces Fourth Quarter and Full-Year 2022 Unaudited Financial Results.

SHENZHEN, China: Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading online music and audio entertainment platform in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

Financial Highlights

In the three months ended December 31, 2022:

Net profit attributable to equity holders of the Company was RMB1.15 billion (US$167 million), representing a 114.7% year-over-year growth. Non-IFRS net profit attributable to equity holders of the Company[1] was RMB1.44 billion (US$208 million), representing a 72.8% year-over-year growth.

Total revenues were RMB7.43 billion (US$1.08 billion).

Revenues from music subscriptions were RMB2.35 billion (US$341 million), representing a 20.6% year-over-year growth. Paying users reached 88.5 million, increasing by 16.1% year-over-year. On a sequential basis, the number of online music paying users grew by 3.2 million.

Diluted earnings per ADS was RMB0.72 (US$0.11) and ADS used in diluted earnings per ADS computation was 1.59 billion.

Total cash, cash equivalents, term deposits and short-term investments as of December 31, 2022 were RMB27.4 billion (US$3.97 billion).

In the full year ended December 31, 2022:

Net profit attributable to equity holders of the Company was RMB3.68 billion (US$533 million), representing a 21.4% year-over-year growth. Non-IFRS net profit attributable to equity holders of the Company[1] was RMB4.75 billion (US$688 million), representing a 14.4% year-over-year growth.

Total revenues were RMB28.34 billion (US$4.11 billion).

Revenues from music subscriptions were RMB8.70 billion (US$1.26 billion), representing an 18.6% year-over-year growth.

"Amid a fast-changing macro environment in 2022, we continued to innovate our services and carried out effective cost optimization measures, leading to strong growth in our full-year profitability as well as steady growth in online music subscriptions throughout the year," said Mr. Cussion Pang, Executive Chairman of TME. "Our diversified suite of monetization tools expanded and made progress during the year such as ad-supported mode, long-form audio, as well as audio live streaming and our international expansion, among many more. Another meaningful accomplishment was the headway we made with our 'music+public welfare' model, which innovatively combines music's emotional expression and influence to promote social progress. With our confidence in the long-term prospects of the company, we had completed the US$1 billion share buyback program approved by the Board in 2021. Looking ahead into 2023, as we are repositioning ourselves to better capture future growth areas, we currently expect our quarterly revenues from online music services will exceed those from social entertainment services at some point within this year. Meanwhile, with our relentless focus on executing our growth strategies and operating efficiencies, we are confident to achieve year-over-year growth in total revenues and profitability as well as continuous improvement in user quality in 2023 while fueling the thriving music industry."

"On the back of our firm execution of the dual engine content-and-platform strategy, in 2022 TME launched a lineup of new tools and leveraged our end-to-end production and promotional resources to unlock value for our partners' content creation, while delivering compelling experiences to all those who are passionate about music as we innovated in each of our four entertainment pillars: listen, watch, sing, and play," said Mr. Ross Liang, CEO of TME. "With our refined mission to 'create endless possibilities with music and technology,' in the fourth quarter, we launched multiple product upgrades and made pioneering advancements in virtual idol, sound quality, visual effects, social functions, virtual entertainment experiences, and more, while comprehensively extending our cooperation with Weixin Video Accounts in the Tencent ecosystem to explore new avenues to distribute music and video content. In addition, we have been deploying and developing breakthrough AIGC tools, such as the LyraSinger, Muse and Lingyin Engines, to further empower music-related content creation and enhance production efficiency. In the future, we will continue to explore the application of large language models (LLMs) in the fields of pictures, texts, video and other content, as well as music recommendation and search, to meet the massive demand for music-related content. In 2023 and in the years to come, we will keep driving industry development, blazing new trails in content and platform innovations, while fulfilling our responsibilities as a leading music industry player."

Financial Review for the Fourth Quarter of 2022

Total revenues for the fourth quarter of 2022 were RMB7.43 billion (US$1.08 billion) which declined 2.4% year-over-year but increased quarter-over-quarter by 0.8%. Revenues from online music services continued...

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