SoftBank's profit beats forecasts on Vision Fund gains

TOKYO • Japan's SoftBank Group Corp raked in a better-than-expected quarterly operating profit due to a leap in investing gains from the US$100 billion (S$138 billion) Vision Fund.

The giant technology investor's operating profit for the first quarter was 688.8 billion yen (S$8.9 billion), down 3.7 per cent from a year ago when results were propped up by a stake sale in chip designer Arm's China business.

The results come as SoftBank prepares to launch a second Vision Fund for which it said last week it has secured US$108 billion in pledges.

SoftBank plans to commit US$38 billion to the new fund. It will be reliant on proceeds from the first Vision Fund to bankroll the contribution, a source has told Reuters

The second Vision Fund could start investing as soon as next month, founder and chief executive Masayoshi Son said yesterday.

The anchor investors from the first fund, Saudi Arabia and Abu Dhabi, are showing "high interest" in taking stakes and negotiations are ongoing, he said. "Vision Fund 2 could start investing pretty soon, next month or the month after."

With the first fund having spent much of its capital on fast-growing, late-stage start-ups like Uber and WeWork parent The We Company, SoftBank is now turning its attention to the second fund to maintain its oversized industry presence.

"Many Japanese companies are sailing using an old map. Using our new map, we are looking for a new continent," Mr Son said.

EXPANDING HORIZONS

Many Japanese companies are sailing using an old map. Using our new map we are looking for a new continent.

SOFTBANK FOUNDER AND CHIEF EXECUTIVE MASAYOSHI SON, on the company turning its attention to the second fund to maintain its oversized industry presence.

The latest results outstripped a 336 billion yen estimate from five analysts compiled by Refinitiv.

SoftBank said yesterday its operating profit at the Saudi-backed US$100 billion Vision Fund surged 66 per cent to 397.6 billion yen for the three months ended June.

Its results have been increasingly volatile as Mr Son shifts focus from the predictable income of telecoms in favour of bets on fast-growing start-ups with shifting valuations.

The group said the fund's US$66.3 billion investments in 81 companies are now worth US$82.2 billion.

SoftBank's shares, which have risen 42 per cent this year, closed down 0.2 per cent ahead of the earnings.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 08, 2019, with the headline 'SoftBank's profit beats forecasts on Vision Fund gains'. Print Edition | Subscribe