TAIWANESE live-streaming platform 17Live saw its losses widen to US$118.2 million for the first half ended June, from a loss of US$42 million in the half-year period last year.

The live-streaming operator – the target of a business combination with Temasek-backed Vertex Technology Acquisition Corporation (VTAC) : VT1 0% – registered a full-year loss of US$51 million for FY2022.

After accounting for revaluation loss at fair value for certain preferred shares and warrants, the group would have posted an adjusted profit of US$9.4 million for H1 FY2023. This revaluation loss on financial liabilities is not expected to recur after the completion of the deal.

However, revenue for the first half-year dropped 24.7 per cent to US$151 million from US$200.4 million. This was attributed to the normalisation and resumption of economic activities after the pandemic, as well as the platform’s shift to focus on profitability by targeting quality users over scale.

Nonetheless, VTAC highlighted that the Taiwan firm’s gross profit margin improved to 41.8 per cent in H1 of FY2023 from 32.7 per cent in the corresponding period last of FY2022.

The growth of profit margin is mainly attributed to an increased contribution from its high-margin in-app game revenue, which is not subject to revenue sharing arrangements, said VTAC.

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The company also highlighted a decrease in channel costs from optimised payment methods and a decrease in server as well as bandwidth costs by enhanced operating efficiency.

Adjusted earnings before interest, taxes, depreciation, and amortisation increased 267.4 per cent on the year to US$15.8 million. This was led by expense decreases in selling and employee benefits. Increases in operating income and working capital also improved 17Live’s cash flow positions, with a positive cash flow from operations of US$9.4 million. In comparison, the firm recorded a negative US$4.6 million of cash flow in operations in the same period last year.

The updates followed VTAC’s proposed merger with 17Live announced on Oct 2.

VTAC proposed to buy 17Live for S$925.1 million. If the deal is approved, it could bring the business value to S$1.2 billion, and it would be the first merger by a Singapore Spac.

Shares of VTAC closed Monday up 0.4 per cent, or S$0.02, at S$4.90.