Business / Corporate

SoftBank Group reports 62% jump in operating profit, rising to record high

by Satoshi Sugiyama

Staff Writer

SoftBank Group Corp. on Wednesday reported robust earnings for the April-December period, crediting positive returns on investments in other businesses and ventures.

The group’s operating profit rose to a record ¥1.85 trillion, a rise of 62 percent compared to the same period the previous year. It also boasted a 52 percent jump in net profit to ¥1.53 trillion for the same nine-month time frame.

SoftBank attributed the strong performance to the success of its Vision Fund and Delta Fund investments as the conglomerate transitions from a telecommunications company to an investment firm. The funds’ combined operating income was ¥808 billion, which accounts for 43 percent of the company’s total.

In particular, the company said that the Vision Fund saw a valuation gain of ¥693.2 billion from the increase in the fair values of ride-hailing company Uber Technologies Inc., New York-based co-working firm WeWork Cos. and India’s online hotel startup Oyo Rooms, as well as other investments.

At a news conference Wednesday, founder Masayoshi Son said the Vision Fund would soon exceed $100 billion.

He also mentioned SoftBank Group’s debt at the gathering, as market watchers have grown uneasy over the course of several months. He offered a rebuttal to their concern, saying that even though the exchange filing states that the interest-bearing debt is ¥17 trillion, ¥7 trillion of that is made up of liabilities from individual companies under the conglomerate, such as SoftBank Corp., the country’s third-largest mobile phone network.

The SoftBank Group itself has about ¥4 trillion worth of interest-bearing debt, Son said.

“Although we are a parent company, we don’t pay even ¥1 as a co-maker,” Son said. “There are different shareholders. … Thus, we don’t repay on the behalf of them. It is not my responsibility.”

Son also touched on the loss incurred in the group’s investment into graphics chipmaker Nvidia Corp. A fall in its share price racked up a ¥299 billion loss from April through December, the company reported. At the same time, by taking advantage of a derivative gain, the group said it minimized the loss to ¥50 billion.

Highlighting the positive net profit, Son said this was possible because the group had taken appropriate actions while Nvidia shares were rising.

“As far as the balance, there isn’t much effect,” Son said. “The case with Nvidia is one simple example on how we operate.”

Son rejected criticism from analysts that he is inept at selling, pointing out that the company had successfully sold and collected profits in other dealings.