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Leyou Technologies Announces 2019 Annual Results
Registered Users of Flagship Product Warframe Maintains Growth Momentum; Total Revenue Reached US$214.2 million, 3/25/2020 - Hong Kong - The global market leader in free-to-play multiplayer online games, Leyou Technologies Holdings Limited ("Leyou Technologies", and its subsidiaries collectively "the Group"; stock code: 1089) is pleased to announce its annual results for the year ended 31 December 2019 ( the "reporting period").

During the reporting period, total revenue of the Group slightly decreased by 5.9% to US$214.2 million. Gross profit amounted to US$121.8 million (2018: US$141.5 million). The Group's EBITDA was US$49.6 million (2018: US$67.0 million). Nevertheless, excluding non-recurring items of impairment losses and equity-settled shared-based payment expenses, adjusted EBITDA only reduced slightly by 2.4% to US$83.2 million.

Mr. Xu Yiran, Chairman and Chief Executive Officer of Leyou Technologies said, "2019 was a challenging and inheriting year. Despite a declining trend in the sales of current-generation consoles, the total number of registered users of our flagship product Warframe recorded impressive growth of 19.5% to 57.5 million, affirming the Group's strong online game development and publishing capabilities. In addition, the co-development agreement between the Group and Amazon Game Studios to co-develop and co-publish a game based on The Lord of the Rings will enable the Group to develop the game on a larger scale with greater complexity of characters and richness in contents and for more platforms. Looking forward, the Group will continue the content updates for Warframe, and proactively expand Warframe to more platforms such as the next-generation consoles and other devices, to maximise returns to all shareholders."

Business Overview

Game Development and Publishing Business

Game development and publishing business is currently the Group's main source of revenue. This segment covered several free-to-play ("F2P") online games distributed globally, as well as a series of new products in development. In terms of financial results, the revenue and profit of this segment were mainly contributed by Warframe, a flagship product of the Group. During the reporting period, large-scale AAA games with themes and gameplay similar to Warframe were launched. The strong market promotion of these highly competitive new products inevitably diverted market attention from Warframe to a certain extent. With the next-generation consoles to be released by the end of 2020, the number of new console players reduced accordingly. Also, due to the size and scale of the development work related to Empyrean, a milestone content update for Warframe, the update cadence was temporarily affected and less new game content was released during the reporting period. The three aforementioned factors impacted the performance of Warframe; revenue of the game consequently reduced by 12.2% year-on-year.

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