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SoftBank tops archrival Docomo for first time on record profit

by Kazuaki Nagata

Staff Writer

Amid growing smartphone sales and a raft of acquisitions, SoftBank Corp. has announced that its group operating profit hit a record ¥1.08 trillion, and its net profit an all-time high of ¥527 billion in fiscal 2013, surpassing rival NTT Docomo Inc. for the first time.

At a Tokyo news conference on Wednesday, SoftBank CEO Masayoshi Son recounted that after his firm purchased the Japan business of Vodafone Group PLC in 2006, he told his colleagues: “I promise you that we will surpass Docomo in 10 years. I’ll bet my life on it.”

At the time, everyone just laughed, unable to imagine any way SoftBank could achieve that target, he added.

Operating profit, which shows how much the firm has earned from its businesses, increased 35.8 percent from the previous year while net profit surged 41 percent.

The firm said a large portion of the increased operating profit came from re-evaluating equities SoftBank owns in GungHo Online Entertainment Inc., a video game maker, and Willcom Inc., which runs a PHS service. Those equities are now evaluated at a combined ¥253.8 billion, SoftBank said.

Meanwhile, SoftBank’s sales rose to ¥6.66 trillion, up 108.2 percent after the acquisition of Sprint, the third-largest carrier in the United States, which added ¥2.6 trillion to SoftBank’s sales total.

In topping Docomo, which still boasts the largest share of domestic subscribers, Son stressed that SoftBank beat out its rival in not just one department, but three: sales, operating profit and net profit.

He also noted that SoftBank had exceeded ¥1 trillion in operating profit in just 33 years, the fastest pace ever for a domestic firm. There are only two other Japanese firms, the NTT Group and Toyota Motor Corp., that have reached the ¥1 trillion milestone.

For fiscal 2014, SoftBank is forecasting group sales of ¥8 trillion and that operating profit will again hit the ¥1 trillion mark in fiscal 2014.