SoftBank profit soars almost 50% boosted by Vision Fund gain

August 6, 2018
Japanese telecommunications provider and technology investor said operating profit was ¥715 billion in the quarter ended June

SoftBank Group’s first-quarter profit climbed 49 per cent from a year earlier, thanks to investment gains.

The Japanese telecommunications provider and technology investor said operating profit was ¥715 billion (Dh23.5bn) in the three months ended June, boosted by a ¥245bn gain from its Vision Fund and a ¥161bn gain on the sale of subsidiary ARM’s Chinese unit. Revenue was ¥2.27 trillion, Bloomberg reported.

The results are overshadowed by the sale of Sprint to T-Mobile US and planned initial public offering of SoftBank’s domestic wireless business. Founder Masayoshi Son has shifted his focus to the company’s longer-term future and investments in overseas technology companies. Last year, he formed the Vision Fund, raising almost $100bn from big backers including Saudi Arabia and Apple. Mr Son has said the fund represents the transformation of SoftBank from a telecoms conglomerate to a holdings group with investments in the world’s most influential technology companies.

In June, The National reported Abu Dhabi’s strategic firm Mubadala Investment Company was partnering with SoftBank to launch a $400 million fund that will target investment in European technology companies. The fund will be managed by the Abu Dhabi fund’s venture capital arm, Mubadala Ventures, with SoftBank participating via its investment subsidiary SIMI US Holdings.

In October, Mubadala, which manages more than $200bn in assets, announced the launch of a venture capital arm to oversee its $15bn commitment to Softbank’s Vision Fund, as well as two other funds.

The proposed $26.5bn takeover of Sprint by T-Mobile would combine the the third and fourth-largest wireless providers in the US, according to Bloomberg. The two carriers have been pitching their deal as a combination of underdogs trying to better compete against industry giants AT&T and Verizon Communications.

SoftBank is interviewing banks to arrange the IPO of its domestic wireless business and plans to select several lead underwriters as early as August, people with knowledge of the matter have said. Foreign and local investment banks have been making formal pitches to SoftBank over the past few weeks, according to the people, who asked not to be identified because the information is private. The company aims for the mobile unit to begin trading in Tokyo in October and the offering could raise more than ¥2tn, they said.

Revenue from domestic telecom operations, which include wireless, broadband and fixed-line services, rose 4.6 per cent to ¥880.5bn in the quarter. Profit was little changed. SoftBank had 33.6 million mobile subscribers, an increase of 434,000 from the previous quarter.

The Vision Fund contribution was mainly due to a valuation gain from the planned sale of Flipkart Online Services, the leading Indian e-commerce player, to Walmart and increase in fair value of WeWork Companies.