2019 Interim Report

During the first half of 2019, IGG experienced a period of financial stabilization and strategic transition. The company generated US$354.7 million in revenue and US$70.7 million in net profit, marking year-over-year declines of 9% and 28%, respectively. These results were primarily driven by the natural maturation of flagship titles such as Lords Mobile and Castle Clash. Despite these headwinds, the company maintained a robust liquidity position with US$270.4 million in cash and no bank borrowings, while simultaneously diversifying its portfolio through the launch of new titles like Brave Conquest and increasing investments in research, development, and global marketing.

The company’s operational structure underwent significant adjustments during this period, most notably the restructuring of its PRC operations. By replacing previous structured contracts with a new framework of eight agreements, the company maintained control over Fuzhou Tianmeng while mitigating regulatory risks associated with evolving foreign investment laws. These structured contracts accounted for 10.3% of total revenue and 11.1% of total assets as of June 30, 2019. Furthermore, the company actively managed its capital through the repurchase and cancellation of 5.688 million shares and the continued utilization of share option and award schemes to incentivize key personnel.

Financial reporting for the period was notably impacted by the adoption of IFRS 16, which required the recognition of lease liabilities and right-of-use assets. This accounting change shifted lease-related expenses from operating rentals to depreciation and interest, resulting in a gearing ratio of 28.2%. Despite the broader market challenges, the company concluded the first half of the year with total assets of US$446.67 million and net assets of US$320.53 million. These figures reflect a disciplined approach to asset management, including the post-period acquisition of Italian property and a continued commitment to long-term growth through global expansion and portfolio diversification.