SHENZHEN, China, March
19, 2019 /PRNewswire/ --
Tencent Music
Entertainment Group ("Tencent Music", "TME", or the "Company") (NYSE:
TME), the leading online music entertainment platform in
China, today announced its
unaudited financial results for the fourth quarter and full year
ended December 31, 2018.
Financial Highlights
In the three months ended December 31,
2018:
- Total revenues increased
by 50.5% year over year to RMB5.40
billion (US$785 million).
- Net loss attributable to equity holders of the Company
was RMB876 million (US$127 million), mostly due to a one-off
RMB1.52 billion (US$221 million) share-based accounting charge
related to the Company's equity issuance to Warner Music Group and
Sony Music Entertainment ("music label partners").
- Non-IFRS net profit attributable to equity holders of
the Company (excluding the share-based charge in respect of the
issuance of ordinary shares to music label partners, amortization
of intangible assets and other assets arising from business
combinations, share-based compensation expenses, net losses from
investments, and fair value change on puttable shares) increased to RMB916
million (US$133
million).
In the full year ended December 31,
2018:
- Total revenues increased by 72.9% to RMB18.99 billion (US$2.76
billion).
- Net profit attributable to equity holders of the Company
was RMB1.83 billion (US$267 million), after the one-off RMB1.52 billion (US$221
million) share-based accounting charge related to the
Company's equity issuance to music label partners.
- Non-IFRS net profit attributable to equity holders of
the Company (excluding the share-based charge in respect of
issuance of ordinary shares to music label partners, amortization
of intangible assets and other assets arising from business
combinations, share-based compensation expenses, net losses from
investments, and fair value change on puttable
shares) increased to RMB 4.18
billion (US$607 million).
"Our initial public offering in December
2018 has launched us onto the international stage, elevated
the global recognition towards our brand, and endorsed our
successful track record," stated Mr. Cussion Kar Shun Pang, Chief
Executive Officer of Tencent Music.
"During the fourth quarter of 2018, we recorded strong growth
across our business lines, including both online music and social
entertainment services, and solidified our market leadership. To
fuel our growth for the years to come, we are firmly committed to
continue investing in premium content offering, innovative products
and proprietary technology. Going into 2019, we will continue
executing relentlessly our mission to use technology to
elevate the role of music in people's lives. We are confident
that our capability in product innovation, investment in technology
advancement, and commitment to developing and promoting high
quality content should not only augment our market leadership, but
also foster the growth and development of the overall music
industry."
Mr. Cheuk Tung Tony Yip, Chief
Strategy Officer of Tencent Music,
remarked, "We are pleased to report that both online music and
social entertainment services have continued their healthy growth
across the board during the fourth quarter of 2018. Through content
enrichment, product innovation, and technology development, we have
been able to attract and retain our vast user base and construct a
self-reinforcing virtuous ecosystem. In content, we expanded our
strategic partnerships with well-known domestic and international
music labels as well as produced more proprietary content such as
music-centric variety shows. In product and technology, we further
enhanced personalization which resulted in increased music
consumption driven by recommendations, and also offered more
features that enable users to engage with music-related short
videos. Our market-leading user base, engaging artist-fans
interactivity, and unrivaled content promotion capabilities have
formed a unique set of value propositions for content partners to
reach an unparalleled audience base within our ecosystem."
"We delivered strong revenue growth during the fourth quarter of
2018 driven by the increase in paying users across our online music
and social entertainment services as well as the increase in user
spending in social entertainment," commented Ms. Shirley Min Hu, Chief Financial Officer of
Tencent Music. "We achieved strong
operating cash flow throughout the year. We continued to invest in
our content offering, including through partnering with more
domestic and international music labels and producing more
proprietary in-house content to meet user demands for diverse forms
of music entertainment. We believe that such investments over
time will not only improve our user engagement and monetization but
also strengthen our competitive advantages."
Company and business Highlights
- TME's key operating metrics continue to grow across both its
online music and social entertainment services segments.
|
|
4Q18
|
4Q17
|
YoY %
|
|
Mobile MAU - online
music[1] (million)
|
644
|
603
|
6.8%
|
|
Mobile MAU - social
entertainment[2] (million)
|
228
|
209
|
9.1%
|
|
Paying users - online
music[3] (million)
|
27.0
|
19.4
|
39.2%
|
|
Paying users - social
entertainment[4] (million)
|
10.2
|
8.3
|
22.9%
|
|
Monthly ARPPU -
online music[5] (RMB)
|
8.6
|
8.7
|
(1.1%)
|
|
Monthly ARPPU -
social entertainment[6] (RMB)
|
126.7
|
101.9
|
24.3%
|
- The Company continued to strengthen its content leadership in
the fourth quarter of 2018. As of December
31, 2018, the Company's music library included over 30
million tracks from domestic and international music
labels.
- During 2018, the Company continued to enrich its content
offering by: (i) expanding the Company's music library through new
partnerships with labels; (ii) producing more content in-house,
including producing music chart countdown shows and
co-producing the music-centric variety show Produce
101, as well as launching live streamed video talk
shows; (iii) launching more long-form audio content such as radio
shows; and (iv) empowering independent artists through the
Tencent Musician platform to
distribute high-quality original music content.
- The Company continued to innovate and enhance its products and
technology in the following ways to integrate music into users'
daily lives: (i) introducing new multilateral interaction features,
such as multi-mic singing room, into WeSing; (ii) adding
more proprietary audio settings to the existing library to
further enhance user experiences; (iii) launching additional
technology-driven and innovative short video product features; and
(iv) leveraging data analytics to improve personalized
recommendations.
[1] "Online music mobile MAUs" for a
given month refers to the sum of mobile MAUs of the Company's music
services, namely QQ Music, Kugou Music, and Kuwo
Music, for that month; duplicate access of different services
by the same device is not eliminated from the calculation. "Mobile
MAUs" for a given month (i) with respect to each of the Company's
products (except WeSing) is measured as the number of unique
mobile devices, as the case may be, through which such product is
accessed at least once in that month; and (ii) with respect to
WeSing, is measured as the number of user accounts through
which WeSing is accessed at least once in that month;
"mobile MAUs" for a given quarter refers to the average of the
monthly number of mobile MAUs for the three months in that
quarter.
|
[2] "Social entertainment mobile
MAUs" for a given month refers to the sum of mobile MAUs that have
accessed the social entertainment services offered by
(i) WeSing; (ii) Kugou's live streaming
services; and (iii) Kuwo' live streaming services;
duplicate access of different services by the same user account or
device is not eliminated from the calculation.
|
[3] "Paying users" for online music
services for any given quarter refers to the average of the number
of users whose subscription packages remain active as of the last
day of each month of that quarter. The number of paying users of
online music services for any given period excludes the number of
users who only purchase digital music singles and albums during
such period because these purchasing patterns tend to reflect
specific hit releases, which fluctuate from period to
period.
|
[4] "Paying users" for social
entertainment services for any given quarter refers to the average
of the number of paying users for each month in that quarter. The
number of paying users of social entertainment services for a given
month refers to the number of users who have paid at least once for
social entertainment services (primarily through purchases of
virtual gifts or premium memberships) during that month.
|
[5] "Monthly ARPPU" for online music
services for any given quarter refers to one-third of (i) the
quarterly online music services subscription revenues divided by
(ii) the number of paying user of the online music services for
that quarter. The revenues from subscriptions for the quarters
indicated were RMB695 million, and RMB505 million,
respectively.
|
[6]
"Monthly ARPPU" for social entertainment services for any given
quarter refers to one-third of (i) the quarterly social
entertainment and others revenues divided by (ii) the number of
paying user of the social entertainment services for that
quarter.
|
Fourth Quarter 2018 Financial Results
Revenues
Total revenues for the fourth quarter of 2018 increased by
RMB1.81 billion, or 50.5%, to
RMB5.40 billion (US$785 million) from RMB3.59 billion in the same period of 2017.
- Revenues from online music services for the fourth quarter of
2018 increased by 45.0% to RMB1.52
billion (US$221 million) from
RMB1.05 billion in the same period of
2017, which was mainly driven by increased revenues from (i) user
subscriptions; (ii) sublicensing music content to third-party
platforms; and (iii) sales of digital music albums to
users. Revenue from paid music through the sales of
subscription packages was RMB695
million (US$101 million), up
from RMB505 million in the fourth
quarter of 2017.
- Revenues from social entertainment services and others for the
fourth quarter of 2018 increased by 52.8% to RMB3.88 billion (US$564
million) from RMB2.54 billion
in the same period of 2017, primarily driven by the revenue growth
in both the Company's online karaoke and live streaming services.
The Company expanded its paying user base and increased user
spending in the fourth quarter of 2018 compared to the same period
of 2017.
Cost of Revenues
Cost of revenues for the fourth quarter of 2018 increased by
62.5% to RMB3.56 billion
(US$518 million) from RMB2.19 billion in the same period of 2017,
primarily due to the increase in content fees and revenue sharing
fees. The increase in content fees was mainly attributable to
higher in-house production costs as the Company increased
investments in the production of high-quality original music
content such as music-centric variety shows, as well as increased
market price and amount of music content licensed from music labels
and other content partners. The increase in revenue sharing fees
reflected the increased sales of virtual gifts driven by the growth
in the Company's online karaoke and live streaming services.
Gross Profit
Gross profit for the fourth quarter of 2018 increased by 31.7%
to RMB1.84 billion (US$267 million) from RMB1.39 billion in the same period of 2017. Gross
margin was 34.0% for the fourth quarter of 2018.
Operating Expenses for the Period
Total operating expenses for the fourth quarter of 2018
increased by RMB497 million, or
58.1%, to RMB1.35 billion
(US$197 million) from RMB855 million in the same period of 2017.
- Selling and marketing expenses for the fourth quarter of 2018
were RMB542 million (US$79 million), an increase of 51.4% year over
year from RMB358 million in the same
period of 2017. The increase was primarily due to increased
spending to promote the Company's brands, products, and content
offering.
- General and administrative expenses for the fourth quarter of
2018 were RMB810 million
(US$118 million), an increase of
63.0% year over year from RMB497
million in the same period of 2017. The increase was mainly
attributable to (i) higher employee benefit expenses in connection
with the increase of the Company's personnel and employee
incentives; and (ii) the professional fees incurred from the
Company's initial public offering completed in December 2018.
Share-based payments in respect of issuance of ordinary
shares to music label partners
The Company recorded a one-off share-based accounting charge of
RMB1.52 billion (US$221 million) in respect of the issuance of
ordinary shares to music label partners in the fourth quarter of
2018, which represent the excess of the then fair value of these
ordinary shares in October 2018 over
the aggregate consideration the Company received.
Operating loss for the Period
Operating loss was RMB970 million
(US$141 million) for the fourth
quarter of 2018 mostly due to the one-off RMB1.52 billion (US$221
million) share-based accounting charge, compared to an
operating profit of RMB650 million in
the same period of 2017.
Net Loss and Non-IFRS Net profit for the Period
Net loss attributable to equity holders of the Company for the
fourth quarter of 2018 was RMB876
million (US$127 million)
compared to a profit of RMB536
million in the same period of 2017, which included the
one-off RMB1.52 billion (US$221 million) share-based accounting charge.
Non-IFRS net profit attributable to equity holders of the Company
was RMB916 million (US$133 million) for the fourth quarter of
2018, compared to RMB667 million in
the same period of 2017. Please refer
to the section titled "Non-IFRS Financial Measure" for
details.
Loss per ADS
Basic and diluted loss per American Depositary Shares ("ADS")
was RMB0.56 (US$0.08) and RMB0.56 (US$0.08),
respectively, for the fourth quarter of 2018. Excluding the
share-based accounting charge in respect of issuance of ordinary
shares to music label partners, amortization of intangible assets
and other assets arising from business combinations, share-based
compensation expenses, net losses from investments, and fair value
change on puttable shares, non-IFRS basic and diluted earnings per
ADS were RMB0.59 (US$0.09) and RMB0.57 (US$0.08),
respectively, for the fourth quarter of 2018. During the fourth
quarter of 2018, the Company had weighted averages of 1,563.5
million basic and 1,610.2 million diluted ADSs outstanding,
respectively. Each ADS represents two of the Company's Class A
ordinary shares.
Cash Flow
Net cash provided by operating activities for the fourth quarter
of 2018 was RMB1.93 billion
(US$281 million), compared
to RMB253 million of cash used in operating activities during
the same period of 2017.
Cash and Cash equivalents
As of December 31, 2018, the
Company had combined cash and cash equivalents of RMB17.36 billion (US$2.52
billion), compared to RMB5.17 billion as of
December 31, 2017. The increase in
cash and cash equivalents was primarily due to cash flow generated
from operations of RMB5.63 billion
(US$819 million) and proceeds from
the Company's issuance of ordinary shares, including those issued
under its initial public offering, of RMB3.50 billion (US$509
million) and puttable shares of RMB422 million (US$61
million) in 2018, partly offset by cash used in investing
activities.
Full Year 2018 Financial Results
Revenues
Total revenues for the full year of 2018 increased by
RMB8.00 billion, or 72.9%, to
RMB18.99 billion (US$2.76 billion) from RMB10.98 billion in the same period of 2017.
- Revenues from online music services for the full year of 2018
increased by 75.8% year over year to RMB5.54
billion (US$805 million) from
RMB3.15 billion in the same period of
2017. This growth was primarily driven by increased revenues from
(i) user subscriptions; (ii) sublicensing music content to
third-party platforms; and (iii) sales of digital music singles and
albums to users. Revenue from paid music through the sales of
subscription packages was RMB2.50
billion (US$364 million), up
from RMB1.84 billion in 2017.
- Revenues from social entertainment services and others for the
full year of 2018 increased by 71.7% year over year to RMB13.45 billion (US$1.96
billion) from RMB7.83 billion
in 2017, primarily driven by the revenue growth in both the
Company's live streaming services and online karaoke service. The
Company's paying user base and user spending continued to grow in
2018 as compared to 2017.
Gross Profit
Gross profit for the full year of 2018 increased by 91.0% year
over year to RMB7.28 billion
(US$1.06 billion) from RMB3.81 billion in the same period of 2017. Gross
margin for the full year of 2018 was 38.3%.
Operating Expenses and Operating Profit
Total operating expenses for the full year of 2018 increased by
63.2% year over year to RMB3.97
billion (US$578 million) from
RMB2.43 billion in the same period of
2017.
- Selling and marketing expenses for the full year of
2018 increased by 87.7% year over year to RMB1.71 billion (US$249
million) from RMB913 million
in the same period of 2017. The increase was primarily due to
increased spending to promote the Company's brands, products, and
content offering.
- General and administrative expenses for the full year of 2018
increased by 48.5% year over year to RMB2.26
billion (US$328 million) from
RMB1.52 billion in the same period of
2017. The increase was mainly attributable to (i) higher employee
benefit expenses in connection with the increase of the Company's
personnel and employee incentives; and (ii) the professional fees
incurred from the Company's initial public offering completed in
December 2018.
Share-based payments in respect of issuance of ordinary
shares to music label partners
The Company recorded a one-off share-based accounting charge of
RMB1.52 billion (US$221 million) in respect of the issuance of
ordinary shares to music label partners in the fourth quarter of
2018, which represent the excess of the then fair value of these
ordinary shares in October 2018 over
the aggregate consideration the Company received.
Operating Profit for the Year
As a result of the foregoing, operating profit increased by
28.0% to RMB2.04 billion
(US$297 million) for the full year of
2018 from RMB1.59 billion in 2017.
Operating margin decreased to 10.7% for the full year of 2018 from
14.5% in 2017 mostly due to the one-off RMB1.52 billion (US$221
million) share-based accounting charge recorded in the
fourth quarter of 2018.
Net Profit and Non-IFRS Net Profit for the Year
Net profit attributable to equity holders of the Company for the
full year of 2018 increased to RMB1.83
billion (US$267 million) from
RMB1.33 billion in 2017, after the
one-off RMB1.52 billion (US$221 million) in share-based accounting charge.
Non-IFRS net profit attributable to equity holders of the
Company for the full year of 2018 increased to RMB4.18 billion (US$607 million) from RMB1.91 billion in the same period of 2017. Please refer to the section titled
"Non-IFRS Financial Measure" for details.
Earnings per ADS
Basic and diluted earnings per ADS were RMB1.19 (US$0.17) and RMB1.16 (US$0.17),
respectively, for the full year of 2018. Excluding the share-based
accounting charge in respect of issuance of ordinary shares to
music label partners, amortization of intangible assets and other
assets arising from business combinations, share-based compensation
expenses, net losses from investments, and fair value change on
puttable shares, non-IFRS basic and diluted earnings per ADS were
RMB2.71 (US$0.39) and RMB2.64 (US$0.38),
respectively for the full year of 2018. During the full year 2018,
the Company had weighted averages of 1,538.2 million basic and
1,579.6 million diluted ADSs outstanding, respectively.
Conference Call Information
Tencent Music's management will
hold a conference call on Tuesday, March 19,
2019 at 8:00 P.M. Eastern Time
or 8:00 A.M. Beijing Time on
Wednesday, March 20, 2019 to discuss
the financial results. Listeners may access the call by dialing the
following numbers:
United States Toll
Free:
|
+1-888-317-6003
|
International:
|
+1-412-317-6061
|
China Toll
Free:
|
400-120-6115
|
Hong Kong Toll
Free:
|
800-963-976
|
Access
Code:
|
7592581
|
The replay will be accessible through March 26, 2019 by dialing the following
numbers:
United States Toll
Free:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Access
Code:
|
10128354
|
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
https://ir.tencentmusic.com/.
Exchange Rate
This announcement contains translations of certain RMB amounts
into U.S. dollars ("USD") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to USD were made at the rate of RMB6.8755 to US$1.00, the noon buying rate in effect on
December 31, 2018 in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or USD amounts referred could be
converted into USD or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
Non-IFRS Financial Measure
The Company use non-IFRS net profit for the year/period, which
is a non-IFRS financial measure, in evaluating its operating
results and for financial and operational decision-making purposes.
Tencent Music believes that non-IFRS
net profit helps identify underlying trends in the Company's
business that could otherwise be distorted by the effect of certain
expenses that the Company includes in its profit for the
year/period. Tencent Music believe
that non-IFRS net profit for the year/period provides useful
information about its results of operations, enhances the overall
understanding of its past performance and future prospects and
allows for greater visibility with respect to key metrics used by
its management in its financial and operational
decision-making.
Non-IFRS net profit for the year/period should not be considered
in isolation or construed as an alternative to operating profit,
net profit/loss for the year/period or any other measure of
performance or as an indicator of its operating performance.
Investors are encouraged to review non-IFRS net profit for the
year/period and the reconciliation to its most directly comparable
IFRS measure. Non-IFRS net profit for the year/period presented
here may not be comparable to similarly titled measures presented
by other companies. Other companies may calculate similarly titled
measures differently, limiting their usefulness as comparative
measures to the Company's data. Tencent Music encourages investors and others to
review its financial information in its entirety and not rely on a
single financial measure.
Non-IFRS net profit for the year/period represents profit for
the year excluding a share-based accounting charge in respect of
the issuance of ordinary shares to music label partners,
share-based compensation expenses, net loss from investments,
amortization of intangible and other assets resulting from the
business combinations, and fair value change on liabilities of
puttable shares.
Please see the "Unaudited Non-IFRS Financial Measure" included
in this press release for a full reconciliation of Non-IFRS net
profit for the year/period to its net profit/loss for the
year/period.
About Tencent Music
Entertainment
Tencent Music Entertainment Group
(NYSE: TME) is the leading online music entertainment platform in
China, operating the country's
highly popular and innovative music apps: QQ Music, Kugou
Music, Kuwo Music and WeSing. Tencent Music's mission is to use technology to
elevate the role of music in people's lives by enabling them to
create, enjoy, share and interact with music. Tencent Music's platform comprises online music,
online karaoke and music-centric live streaming services, enabling
music fans to discover, listen, sing, watch, perform and socialize
around music. For more information, please visit
ir.tencentmusic.com.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Statements that
are not historical facts, including statements about the Company's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties, and a number of factors could cause actual results
to differ materially from those contained in any forward-looking
statement. In some cases, forward-looking statements can be
identified by words or phrases such as "may", "will," "expect,"
"anticipate," "target," "aim," "estimate," "intend," "plan,"
"believe," "potential," "continue," "is/are likely to" or other
similar expressions. Further information regarding these and other
risks, uncertainties or factors is included in the Company's
filings with the SEC. All information provided in this press
release is as of the date of this press release, and the Company
does not undertake any duty to update such information, except as
required under applicable law.
Investor Relations Contact
ir@tencentmusic.com
+1 (646) 308-1736
Media Relations Contact
TME.PR@icrinc.com
+1 (646) 992-2986
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED
INCOME STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
2017
|
|
2018
|
|
|
2017
|
|
2018
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
Unaudited
|
|
Unaudited
|
Unaudited
|
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
|
(in millions,
except per share data)
|
|
|
(in millions,
except per share data)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Online music
services
|
|
1,048
|
|
1,520
|
221
|
|
|
3,149
|
|
5,536
|
805
|
Social entertainment
services and others
|
|
2,538
|
|
3,877
|
564
|
|
|
7,832
|
|
13,449
|
1,956
|
|
|
3,586
|
|
5,397
|
785
|
|
|
10,981
|
|
18,985
|
2,761
|
Cost of
revenues
|
|
(2,192)
|
|
(3,561)
|
(518)
|
|
|
(7,171)
|
|
(11,708)
|
(1,703)
|
Gross
profit
|
|
1,394
|
|
1,836
|
267
|
|
|
3,810
|
|
7,277
|
1,058
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(358)
|
|
(542)
|
(79)
|
|
|
(913)
|
|
(1,714)
|
(249)
|
General and
administrative expenses
|
|
(497)
|
|
(810)
|
(118)
|
|
|
(1,521)
|
|
(2,258)
|
(328)
|
Total operating
expenses
|
|
(855)
|
|
(1,352)
|
(197)
|
|
|
(2,434)
|
|
(3,972)
|
(578)
|
Interest
income
|
|
24
|
|
100
|
15
|
|
|
93
|
|
282
|
41
|
Other gains/
(losses), net
|
|
87
|
|
(35)
|
(5)
|
|
|
124
|
|
(29)
|
(4)
|
Share-based payments in respect
of
issuance of ordinary shares to music
label partners
|
|
-
|
|
(1,519)
|
(221)
|
|
|
-
|
|
(1,519)
|
(221)
|
Operating profit/
(loss)
|
|
650
|
|
(970)
|
(141)
|
|
|
1,593
|
|
2,039
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of (loss)/
profit of investments
accounted for using equity method
|
|
(3)
|
|
10
|
1
|
|
|
4
|
|
(1)
|
-
|
Fair value change on
puttable shares
|
|
-
|
|
(9)
|
(1)
|
|
|
|
|
(35)
|
(5)
|
Profit/ (loss)
before income tax
|
|
647
|
|
(969)
|
(141)
|
|
|
1,597
|
|
2,003
|
291
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(113)
|
|
94
|
14
|
|
|
(278)
|
|
(171)
|
(25)
|
Profit/ (loss) for
the period/year
|
|
534
|
|
(875)
|
(127)
|
|
|
1,319
|
|
1,832
|
266
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
536
|
|
(876)
|
(127)
|
|
|
1,326
|
|
1,833
|
267
|
Non-controlling
interests
|
|
(2)
|
|
1
|
-
|
|
|
(7)
|
|
(1)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/ (loss)
per share for
Class A and Class B ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.20
|
|
(0.28)
|
(0.04)
|
|
|
0.51
|
|
0.60
|
0.09
|
Diluted
|
|
0.20
|
|
(0.28)
|
(0.04)
|
|
|
0.50
|
|
0.58
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/ earnings
per ADS (2
Class A shares
equal to 1 ADS)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
(0.56)
|
(0.08)
|
|
|
|
|
1.19
|
0.17
|
Diluted
|
|
|
|
(0.56)
|
(0.08)
|
|
|
|
|
1.16
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings/ (loss)
per Class A and Class B ordinary
share computation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,673,703,287
|
|
3,126,915,062
|
3,126,915,062
|
|
|
2,593,157,207
|
|
3,076,314,670
|
3,076,314,670
|
Diluted
|
|
2,722,564,466
|
|
3,126,915,062
|
3,126,915,062
|
|
|
2,639,466,412
|
|
3,159,220,888
|
3,159,220,888
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in
(loss)/ earnings per
ADS computation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
1,563,457,531
|
1,563,457,531
|
|
|
|
|
1,538,157,335
|
1,538,157,335
|
Diluted
|
|
|
|
1,563,457,531
|
1,563,457,531
|
|
|
|
|
1,579,610,444
|
1,579,610,444
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
|
UNAUDITED NON-IFRS
FINANCIAL MEASURE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
2017
|
|
2018
|
|
|
2017
|
|
2018
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
(in millions,
except per share data)
|
|
|
(in millions,
except per share data)
|
Profit/ (loss) for
the period/year
|
|
534
|
|
(875)
|
(127)
|
|
|
1,319
|
|
1,832
|
266
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible and other assets
arising from business combinations*
|
|
59
|
|
70
|
10
|
|
|
271
|
|
249
|
36
|
Share-based
compensation
|
|
144
|
|
142
|
21
|
|
|
384
|
|
487
|
71
|
Share-based payments
in respect of
issuance of ordinary shares to music label
partners**
|
|
-
|
|
1,519
|
221
|
|
|
-
|
|
1,519
|
221
|
(Gains)/ losses from
investments
|
|
(72)
|
|
52
|
8
|
|
|
(70)
|
|
52
|
8
|
Fair value change on
puttable shares ***
|
|
-
|
|
9
|
1
|
|
|
-
|
|
35
|
5
|
Non-IFRS Net
Profit
|
|
665
|
|
917
|
133
|
|
|
1,904
|
|
4,174
|
607
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
Non-IFRS Equity
holders of the Company
|
|
667
|
|
916
|
133
|
|
|
1,911
|
|
4,175
|
607
|
Non-controlling
interests
|
|
(2)
|
|
1
|
-
|
|
|
(7)
|
|
(1)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and
Class B ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.25
|
|
0.29
|
0.04
|
|
|
0.74
|
|
1.36
|
0.20
|
Diluted
|
|
0.24
|
|
0.28
|
0.04
|
|
|
0.72
|
|
1.32
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS
(2 Class A shares
equal to 1 ADS)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
0.59
|
0.09
|
|
|
|
|
2.71
|
0.39
|
Diluted
|
|
|
|
0.57
|
0.08
|
|
|
|
|
2.64
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings per Class
A and Class B ordinary share
computation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,673,703,287
|
|
3,126,915,062
|
3,126,915,062
|
|
|
2,593,157,207
|
|
3,076,314,670
|
3,076,314,670
|
Diluted
|
|
2,722,564,466
|
|
3,220,376,823
|
3,220,376,823
|
|
|
2,639,466,412
|
|
3,159,220,888
|
3,159,220,888
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in
earnings per ADS
computation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
1,563,457,531
|
1,563,457,531
|
|
|
|
|
1,538,157,335
|
1,538,157,335
|
Diluted
|
|
|
|
1,610,188,411
|
1,610,188,411
|
|
|
|
|
1,579,610,444
|
1,579,610,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents the
amortization of identifiable assets, including intangible assets
and prepayments for music content, resulting from Tencent's
acquisition of CMC in 2016, our acquisition of Ultimate Music in
2017, and our acquisition of certain subsidiaries in 2018, net of
related deferred taxes.
|
|
** Represents the
excess of the then fair value of the ordinary shares we issued to
Warner Music Group and Sony Music Entertainment over the
aggregate consideration the Company received in October
2018.
|
|
*** Represents the
fair value changes on the put liability of certain shares issued in
2018
|
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED
BALANCE SHEET
|
|
|
|
|
|
|
|
|
As of December
31,
|
|
|
2017
|
|
2018
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
|
(in
millions)
|
ASSETS
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
127
|
|
168
|
24
|
Intangible
assets
|
|
1,717
|
|
1,763
|
256
|
Goodwill
|
|
16,262
|
|
17,088
|
2,485
|
Investments accounted
for using equity method
|
378
|
|
236
|
34
|
Financial assets at
fair value through other comprehensive
income
|
3,740
|
|
3,331
|
484
|
Other
investments
|
|
-
|
|
217
|
32
|
Prepayments and
deposits
|
|
204
|
|
901
|
131
|
Deferred tax
assets
|
|
105
|
|
123
|
18
|
|
|
22,533
|
|
23,827
|
3,465
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Inventories
|
|
30
|
|
35
|
5
|
Accounts
receivable
|
|
1,161
|
|
1,483
|
216
|
Prepayments, deposits
and other assets
|
1,102
|
|
1,823
|
265
|
Other
investments
|
|
-
|
|
39
|
6
|
Short-term
investments
|
|
-
|
|
42
|
6
|
Cash and cash
equivalents
|
|
5,174
|
|
17,356
|
2,524
|
|
|
7,467
|
|
20,778
|
3,022
|
|
|
|
|
|
|
Total
assets
|
|
30,000
|
|
44,605
|
6,488
|
|
|
|
|
|
|
|
|
|
|
|
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED
BALANCE SHEET
|
|
|
|
|
|
|
|
|
As of December
31,
|
|
|
2017
|
|
2018
|
|
|
RMB
|
|
RMB
|
US$
|
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
|
(in
millions)
|
EQUITY
|
|
|
|
|
|
Equity
attributable to
equity holders of the Company
|
|
|
|
|
|
Share
capital
|
|
2
|
|
2
|
-
|
Share
premium
|
|
23,915
|
|
33,776
|
4,913
|
Other
reserves
|
|
997
|
|
903
|
131
|
Retained
earnings
|
|
1,227
|
|
3,040
|
442
|
|
|
26,141
|
|
37,721
|
5,486
|
Non-controlling
interests
|
|
7
|
|
51
|
7
|
|
|
|
|
|
|
Total
equity
|
|
26,148
|
|
37,772
|
5,494
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Other
payables
|
|
21
|
|
241
|
35
|
Deferred income tax
liabilities
|
|
304
|
|
354
|
51
|
|
|
325
|
|
595
|
87
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
1,045
|
|
1,830
|
266
|
Other payables and
accruals
|
|
1,312
|
|
2,742
|
399
|
Current tax
liabilities
|
|
192
|
|
235
|
34
|
Deferred
revenue
|
|
978
|
|
1,431
|
208
|
|
|
3,527
|
|
6,238
|
907
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
3,852
|
|
6,833
|
994
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
30,000
|
|
44,605
|
6,488
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
RMB
|
|
RMB
|
US$
|
|
RMB
|
|
RMB
|
US$
|
|
Unaudited
|
|
Unaudited
|
Unaudited
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
(in
millions)
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/
provided by operating activities
|
(253)
|
|
1,932
|
281
|
|
2,500
|
|
5,632
|
819
|
Net cash provided by/
(used in) investing activities
|
248
|
|
(950)
|
(138)
|
|
(483)
|
|
(1,190)
|
(173)
|
Net cash provided by
financing activities
|
1
|
|
4,886
|
711
|
|
99
|
|
7,741
|
1,126
|
Net (decrease)/
increase in cash and cash equivalents
|
(4)
|
|
5,868
|
853
|
|
2,116
|
|
12,183
|
1,772
|
Cash and cash
equivalents at beginning of the period/ year
|
5,184
|
|
11,529
|
1,677
|
|
3,071
|
|
5,174
|
753
|
Exchange losses on
cash and cash equivalents
|
(6)
|
|
(41)
|
(6)
|
|
(13)
|
|
(1)
|
-
|
Cash and cash
equivalents at end of the period/ year
|
5,174
|
|
17,356
|
2,524
|
|
5,174
|
|
17,356
|
2,524
|
View original
content:http://www.prnewswire.com/news-releases/tencent-music-entertainment-group-announces-fourth-quarter-and-full-year-2018-unaudited-financial-results-300814800.html
SOURCE Tencent Music Entertainment
Group