TOKYO – SoftBank Group has swung to its first profit after four straight quarters of losses, backed by a rebound in the value of Vision Fund’s public holdings and a windfall from T-Mobile US shares.
The investment giant reported a net profit of 985.5 billion yen (S$8.9 billion) for the December 2023 quarter, reversing a 744.7 billion yen loss for the same period of the year before.
It is the Japanese company’s first profit since September 2022, as it navigates volatile swings in the value of its start-up investments.
The Vision Fund unit reported a 422.74 billion yen gain for the period, up from a loss of 660.1 billion yen a year ago.
DoorDash, AutoStore Holdings and Symbotic were among the best performers contributing to the Vision Fund.
The value of Didi Global’s shares also rose 22 per cent in the over-the-counter market.
The solid quarter may herald more relief to come, according to Mr Kirk Boodry, an analyst at Astris Advisory. “We have not been overly bullish on the current portfolio, but the listing of key VF1 assets like ByteDance or Fanatics could provide some relief in 2024,” he wrote in a note ahead of the earnings, referring to Vision Fund’s investments in China’s TikTok owner and the American online sportswear and fan gear store.
SoftBank booked an extra windfall from an arrangement to receive more than 48 million T-Mobile shares worth almost US$8 billion (S$10.8 billion).
The deal was part of an agreement struck when T-Mobile acquired rival and former SoftBank unit Sprint Corp in 2020, designed to give SoftBank more T-Mobile shares if the stock rose above a certain level during a given period.
A 40 per cent rally in newly listed chip design unit Arm Holdings’ shares in the December quarter further bolstered SoftBank’s finances.
As the owner of a roughly 90 per cent stake in the British firm, SoftBank will likely be able to use Arm to help finance loans for new investments, in the same way a stake in Alibaba Group Holding Ltd helped SoftBank secure financing to acquire Arm in the first place.
On Feb 7, Arm gave a bullish earnings forecast that beat estimates, as a push beyond smartphones to more lucrative arenas such as servers and data centres bore fruit.
Arm shares soared in after-hours trading, bringing the company’s value closer to US$100 billion.
Scepticism remains, however, about the Vision Fund’s hundreds of privately held start-ups.
The second Vision Fund, funded entirely by SoftBank, is mired in losses after a post-pandemic slump hurt tech valuations worldwide.
The first Vision Fund has had its own share of losses, including from WeWork, the start-up once valued as much as US$47 billion that filed for bankruptcy last year. REUTERS, BLOOMBERG
