During the first half of 2019, IGG Inc. experienced a period of financial stabilization as its flagship titles, Lords Mobile and Castle Clash, matured. The company reported revenue of US$354.7 million and a net profit of US$70.7 million, representing year-over-year declines of 9% and 28%, respectively. Despite these contractions, the organization maintained a commitment to long-term growth by increasing research and development investment by 48% and expanding its global infrastructure, including the acquisition of a regional office in Italy.
Financial results were influenced by the adoption of IFRS 16 on January 1, 2019, which required the capitalization of operating leases. This accounting transition resulted in the recognition of US$12.78 million in lease liabilities and shifted lease-related expenses from operating rental costs to depreciation and interest, impacting the company’s gearing ratio, which stood at 28.2% by mid-year. Furthermore, net cash generated from operating activities decreased to US$46.1 million, down from US$126.6 million in the prior year, reflecting both the revenue stabilization and shifts in cash flow classification.
Corporate governance and capital management remained central to the company’s strategy throughout this period. Major shareholders maintained a combined 20.88% interest through an acting-in-concert agreement, while the company continued to utilize share option and award schemes to incentivize personnel. Management also executed share repurchases totaling HK$52.3 million. Regarding its operations in the People’s Republic of China, the company utilized structured contracts to support business activities, which accounted for 10.3% of total revenue. While these arrangements remain subject to evolving regulatory landscapes, the company asserts that its operations are not overly dependent on these structures and maintains rigorous internal controls to ensure ongoing compliance.
