SoftBank profit declines following Sprint perk a year ago

Japanese technology company SoftBank’s fiscal first quarter earnings dropped 39% because of the absence of the cash benefit from the merger of Sprint, which boosted its profits a year ago

Japan SoftBank
Japan SoftBank

Japanese technology company SoftBank’s fiscal first quarter earnings dropped 39% because of the absence of the cash benefit from the merger of Sprint which boosted its profits a year ago.

Tokyo-based SoftBank Group Corp. reported a 761.5 billion yen ($6.9 billion) profit for April-June on Tuesday, down from 1.26 trillion yen the previous year. Quarterly sales rose nearly 16% to 1.48 trillion yen ($13 billion).

SoftBank, whose investment portfolio includes office-space sharing WeWork Yahoo! Japan and Alibaba, a Chinese e-commerce company, as well as a myriad of other ventures, said it made investments totaling $2.1 billion during the quarter.

SoftBank, which was the first to offer the Apple iPhone in the Japanese market, benefited last year when U.S. mobile carrier Sprint, which it owned, merged with T-Mobile, a European telecommunications company.

SoftBank profited this year from its investments, recording a net gain of 309.7 billion yen ($2.8 billion) in SVF1, or “SoftBank Vision Fund One,” and another gain of 97 billion yen ($882 million) in SVF2. It also operates what’s called a Latin America Fund, with 48 investments.

SoftBank had benefited from the recent stock boom, posting for the fiscal year that ended in March the biggest annual net profit for any company in Japanese history, surpassing Japan’s top earner Toyota Motor Corp.

But analysts are raising concerns that the value of some of SoftBank’s holdings has been declining, saying worse may be ahead in the July-September quarter.

Chief Executive and founder Masayoshi Son had brushed off the record profit for the previous fiscal year as “a coincidence,” promising to keep pursuing his dream of innovation, not just monetary gain.

Still, SoftBank is benefitting from the world’s move online because of the coronavirus pandemic, including the shift to remote working and online entertainment, Son said.

“It was a meaningful year for us,” he told reporters.

Son said SoftBank has become the world’s top investor in artificial intelligence, accounting for 10% of the capital in unlisted AI companies, including so-called unicorns, privately held startup companies valued over $1 billion.

Second and third-ranked AI investors have invested a fraction of what SoftBank has, he said, stressing he is taking the risk because he is convinced the “AI revolution” is coming.

SoftBank income's also increased at Z Holdings Corp., which includes as group companies Yahoo! Japan, electronic payment operator PayPay Corp. and online clothing retailer ZoZo, as it completed the business integration of mobile applications company Line Corp. in March 2021.

“We’ve had bumps along the way, but we are gradually on the rise,” Son said of the company’s recent investments.

___

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in