TENCENT Holdings Ltd.’s shares plunged almost 7% Thursday after the Shenzhen-based giant reported Wednesday its quarterly profit halved from a year ago and revenues stagnated.

The social media and video game behemoth blamed cuts in advertising spending by consumer, e-commerce and travel businesses for its worst-ever quarterly performance since it went public in 2004.

Tencent, the operator of the WeChat messaging platform and the world’s largest video game company, said that revenue edged 0.1% higher from a year earlier to 135.47 billion yuan (US$20.11 billion). Net profit fell 51% to 23.41 billion yuan.

The slowdown was primarily due to a 1% revenue decline from Tencent’s domestic games business, one of the company’s largest income streams. But the firm’s international game revenue rose 4% in the first quarter.

Revenue growth in its fintech and business services segment slowed to 10% in the first quarter, from 47% a year earlier. Ad sales also slumped 18% in the first quarter, following a 13% drop in the October-December period.

COVID-19 lockdowns in China have hurt advertiser sentiment, while Tencent’s ad business has also taken a knock from competition from rivals, including TikTok owner ByteDance. (SD-Agencies)