Internet business investor Softbank Corp. dipped into the red in the year that ended March 31, due to costs to build infrastructure for broadband online services and a devaluation of the firm’s stockholdings, company officials said Friday.
The firm posted a consolidated net loss of 88.76 billion yen in the 2001 business year, compared with a profit of 36.63 billion yen the previous year. It was the the first net loss for Softbank since it introduced consolidated book closings in fiscal 1994.
The firm also incurred a consolidated pretax loss of 33.3 billion yen, a sharp plunge from the 20.07 billion yen pretax profit in 2000.
Group sales rose 2.1 percent to 405 billion yen.
Softbank blamed the overall loss on extraordinary losses totaling 177.84 billion yen, which included 118.46 billion yen in valuation losses on shareholdings. Such holdings include about 40.3 billion yen in shares of Asia Global Crossing Ltd., an operator of an submarine fiber-optic telecommunications network linking Japan with other Asian countries.
It also booked a 19.98 billion yen extraordinary loss, mainly due to a devaluation of intangible fixed assets at Key3Media Group Inc. that resulted from changes in U.S. accounting standards.
Softbank did not disclose its earnings projections for this year, citing possible changes in stock and currency markets that may greatly affect it as a holding company.
Softbank President Masayoshi Son said its broadband business is expected to log monthly profits sometime in the second half of the current business year and go into the black next year.
Son said the company spent 87.5 billion yen on the broadband business in 2001, but will invest only several billion yen for the current business year as most of the infrastructure is now in place.
The company jointly operates the Yahoo BB high-speed Internet connection service, which uses asymmetrical digital subscriber lines, with its affiliate Yahoo Japan Corp.
Son also said Softbank had 365.6 billion yen in long-term debts at the end of March, down from 487.5 billion yen at the end of last September.
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