Tencent third quarter revenue climb but profit drops

Chinese internet giant Tencent said Wednesday its net profit fell 13 percent in the third quarter even as the company's revenues continue to climb out of a slump caused by a government crackdown on online gaming.

The Shenzhen-based company said its net profit was 20.4 billion yuan ($2.9 billion) in the three months ending September 30, as costs for content and FintTech services rose.

Tencent's total revenues climbed 21 percent year-on-year to 97.2 billion yuan, thanks in part to a 15 percent increase in revenues from value-added services, which includes online games, social networks and streaming services. Online games revenues grew 11% to 28.6 billion yuan in the three months, Tencent said in a statement. Tencent was hammered by a Chinese government crackdown on gaming which launched last year and led to a months-long licence approval freeze. Although it was showing signs of recovery, the gaming crackdown shaved around $250 billion off Tencent's stock market value by the end of last year and battered profits towards the end of 2018.

Beijing imposed in November a curfew on gamers under 18, the latest restriction to hit the industry. Tencent said it believed "the recent regulations that limit younger players' game play will have limited additional impact" to its business, as the company had already been implementing a system to limit younger players' screen time.