Tencent sees full year profits rise to over $1 billion

Chinese online services company Tencent has announced its fourth quarter financial results, with full year revenues rising by 57.9 per cent to RMB 19.65 billion ($2.97 billion).

Profits for the year were RMB 8.12 billion ($1.23 billion), a year-on-year rise of 55.4 per cent. Net margins for the company fell though, from 42.0 per cent to 41.3 per cent.

For the fourth quarter alone total revenues stood at RMB 5.52 billion ($0.83 billion), an improvement of 49.8 per cent on the previous year. Fourth quarter profits were RMB 2.21 billion ($0.33 billion), up 44.4 per cent.

Despite what the company referred to as "weaker seasonality" online gaming revenues for the fourth quarter increased by 9. per cent to RMB 2.79 billion ($0.42 billion). Sales were driven primarily by web-based MMO game Qi Xiong Zheng Ba, which was launched in August 2010.

The company also saw increased monetisation from Cross Fire, and continued revenue growth from Dungeon and Fighter and QQ Game. Revenues from "community value-added services" also increased by 1.7 per cent to RMB 1.60 billion ($0.24 billion).

Tencent has increasingly been making inroads into Western markets, with titles such as Dungeon and Fighter gaining a worldwide release. The company has also begun to invest in Western studios, buying League of Legends developer Riot Games for $400 million in February.

The company is also to mange Crytek's Warface title in China and last year beat Apple in Bloomberg's annual tech growth list.

"As Internet applications continue to diversify, we believe open platform and collaboration will be the keys to our long-term success," said chairman and CEO Ma Huateng.

"Therefore, we have unveiled a comprehensive open platform strategy across a broad range of our platforms including QQ, Qzone, microblog and Tenpay. We have also established a RMB 5 billion collaboration fund to provide capital support to innovative companies in the industry.

"We will make significant investments in a number of new strategic platforms including microblog, e-commerce, search, and online security, in addition to continued investments in our existing businesses.

"Through our open platform strategy and our investments in platforms, we aim to help build a healthier ecosystem for the industry, offering higher values to our users and our partners, and benefiting our company in the long run."