Japan’s SoftBank Group books first annual profit in 4 years
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The scale of Softbank's commitments has prompted analysts to question its ability to weather market volatility brought about by new US tariffs.
PHOTO: REUTERS
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TOKYO - Japan’s SoftBank Group reported its first annual profit in four years on May 13, likely bringing relief to investors scarred by high-profile failures as the tech investor embarks on another series of mammoth investments.
The conglomerate reported 1.15 trillion yen (S$10 billion) for the year ended March, versus a loss of 227.6 billion yen a year earlier.
The figure got a boost from the 517 billion yen booked for January-March – more than double that earned in same period a year earlier – on strong performance from telecommunications holdings and higher valuations in its later-stage startups.
The turnaround illustrates the risk and reward of SoftBank’s approach of investing in high-growth technology companies, epitomised by the success of its investment in Chinese e-commerce leader Alibaba Group and bankruptcy of US office-space start-up WeWork.
Its Vision Fund 1, which invests in later-stage start-ups, recorded an investment gain of 940 billion yen in the fourth quarter, boosted by increases in the fair value of holdings such as TikTok operator Bytedance and e-commerce platform Coupang .
In contrast, its Vision Fund 2, which invests in earlier-stage start-ups, booked an investment loss of 526 billion yen.
SoftBank’s holdings in mature telecommunications companies, including T-Mobile US and Deutsche Telekom, have been a consistent source of investment gain in recent quarters.
T-Mobile shares hit an all-time high in March and ended the quarter up more than 20 per cent.
SoftBank is in the midst of its most extensive spending spree since the launch of its Vision Funds – in 2017 and 2019 – this time targeting companies it deems to be leading the development of artificial intelligence.
In March, it said it would acquire US semiconductor design company Ampere for US$6.5 billion and announced new investment of up to US$30 billion in ChatGPT maker OpenAI.
SoftBank is also leading financing for the “Stargate” project – a US$500 billion scheme to develop data centres in the United States – saying most of the money would come through lenders in project finance schemes.
The scale of the commitments has prompted analysts and investors to question SoftBank’s ability to weather market volatility brought about by new US tariffs. REUTERS
