Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
A pedestrian walks past a SoftBank branch in Tokyo, Japan, February 7 2024. Picture: TOMOHIRO OHSUMI/GETTY IMAGES
Tokyo — Japan’s SoftBank Group returned to profit for the first time in five quarters on Thursday, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies, sparking hope it was emerging from a period of retrenchment.
Net profit totalled ¥985.5bn ($6.6bn) in the three months to December, versus a ¥744.7bn loss in the same period a year earlier.
Founded by CEO Masayoshi Son, SoftBank and its Vision Fund investment arm have gone through a difficult period of slashing investment activity and selling assets. Stakes in high-growth start-ups were particularly hit as risk appetite waned during the pandemic and its aftermath.
While SoftBank’s results are often volatile, Thursday’s numbers could give investors some relief: quarterly net income surpassed market expectations and the closely-watched Vision Fund arm booked an investment profit of ¥600.73bn.
SoftBank was again on a “growth trajectory,” CFO Yoshimitsu Goto told a briefing, adding that market conditions and the outlook were both “very positive”.
The Vision Fund business — which includes two funds by that name — was helped as valuations increased for holdings such as ride-hailing company Didi Global, TikTok owner ByteDance and robotics firm AutoStore Holdings.
Meanwhile, its investment in office-sharing company WeWork was written down to zero in the quarter.
“There have been higher valuations in recent funding rounds for Vision Fund companies. It looks like the environment for tech start-ups is taking a positive turn,” said Rolf Bulk, an analyst at New Street Research.
While new investment activity in the quarter was minimal, Goto said this was simply a matter of timing and that the investment pipeline was building up.
He added that SoftBank’s priority was to use its ample liquidity — including ¥4.4-trillion in cash, cash equivalents and liquid bond holdings — to make new investments.
Some investors had been looking to see whether SoftBank would return some money to shareholders via share buybacks, but Goto said that right now growth investment came first.
SoftBank shares jumped 11% on Thursday to their highest since September 2021, helped by an upbeat revenue forecast from chip design unit Arm on Wednesday.
Son is known for having made canny bets on emerging technology such as mobile internet and today’s big names such as e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.
However, some of his more recent wagers have turned sour, most notably WeWork that was once privately valued at $47bn but filed for bankruptcy in November.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
SoftBank posts first profit in five quarters
Investment in WeWork written off in the quarter
Tokyo — Japan’s SoftBank Group returned to profit for the first time in five quarters on Thursday, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies, sparking hope it was emerging from a period of retrenchment.
Net profit totalled ¥985.5bn ($6.6bn) in the three months to December, versus a ¥744.7bn loss in the same period a year earlier.
Founded by CEO Masayoshi Son, SoftBank and its Vision Fund investment arm have gone through a difficult period of slashing investment activity and selling assets. Stakes in high-growth start-ups were particularly hit as risk appetite waned during the pandemic and its aftermath.
While SoftBank’s results are often volatile, Thursday’s numbers could give investors some relief: quarterly net income surpassed market expectations and the closely-watched Vision Fund arm booked an investment profit of ¥600.73bn.
SoftBank was again on a “growth trajectory,” CFO Yoshimitsu Goto told a briefing, adding that market conditions and the outlook were both “very positive”.
The Vision Fund business — which includes two funds by that name — was helped as valuations increased for holdings such as ride-hailing company Didi Global, TikTok owner ByteDance and robotics firm AutoStore Holdings.
Meanwhile, its investment in office-sharing company WeWork was written down to zero in the quarter.
“There have been higher valuations in recent funding rounds for Vision Fund companies. It looks like the environment for tech start-ups is taking a positive turn,” said Rolf Bulk, an analyst at New Street Research.
While new investment activity in the quarter was minimal, Goto said this was simply a matter of timing and that the investment pipeline was building up.
He added that SoftBank’s priority was to use its ample liquidity — including ¥4.4-trillion in cash, cash equivalents and liquid bond holdings — to make new investments.
Some investors had been looking to see whether SoftBank would return some money to shareholders via share buybacks, but Goto said that right now growth investment came first.
SoftBank shares jumped 11% on Thursday to their highest since September 2021, helped by an upbeat revenue forecast from chip design unit Arm on Wednesday.
Son is known for having made canny bets on emerging technology such as mobile internet and today’s big names such as e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.
However, some of his more recent wagers have turned sour, most notably WeWork that was once privately valued at $47bn but filed for bankruptcy in November.
Reuters
Adam Neumann in bid to buy back WeWork
Meet US dealmaker who’s trying to turn around SoftBank’s fortunes
SoftBank buys majority stake in car software firm Cubic
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Underwriters raise premiums on ships transiting Red Sea
Monte Paschi to pay first dividend in 13 years
UniCredit stuns markets with bumper profit
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.