Business / Corporate

SoftBank Group's quarterly profit jumps to ¥1.12 trillion, the highest recorded for a Japanese firm

Kyodo, Bloomberg

SoftBank Group Corp. said Wednesday its group net profit in the April-June period jumped more than threefold to a record ¥1.12 trillion ($10.6 billion) from a year earlier — marking the best quarter for a Japanese firm since 2004 — boosted by a special profit from selling part of its stake in Chinese e-commerce giant Alibaba Group Holding Ltd.

SoftBank Group said its operating profit fell 3.7 percent to ¥688.82 billion in the three months that ended June 30 on sales of ¥2.34 trillion, up 2.8 percent on a consolidated basis.

The company logged the largest group net profit on a quarterly basis among 400 major firms listed on bourses operated by Japan Exchange Group Inc. since Nomura Holdings Inc. started compiling such data in 2004.

The investment giant said it booked a one-time gain of ¥1.22 trillion in the quarterly period following the completion of the partial sale of the stake in Alibaba.

The company’s profit was also boosted by gains from investments in technology startups made by its Vision Fund, through which SoftBank made investments in 81 companies as of the end of June.

“It is remarkable for us to mark a (group net) profit of more than ¥1 trillion in a quarter for the first time,” said Chairman and CEO Masayoshi Son at a news conference in Tokyo.

The company did not provide a forecast for the full business year through March.

SoftBank Group announced last month it will set up a second mega-fund, named Vision Fund 2 and worth $108 billion, to invest in startups using artificial intelligence technology.

Son has been remaking SoftBank from primarily a telecommunications operator into a technology investment firm, and his $100 billion Vision Fund has emerged as a major contributor to earnings. The pending sale of SoftBank’s U.S. wireless unit Sprint Corp. to T-Mobile USA Inc. would accelerate the transition.

The Vision Fund and SoftBank’s own Delta Fund contributed ¥397.6 billion to profit in the quarter, accounting for more than half of the total. SoftBank booked valuation gains on its stakes in Slack, which went public in June, Indian hotel chain OYO Rooms and food-delivery app DoorDash Inc. The gains were offset by a ¥195.3 billion decline in the fair value of holdings including Uber Technologies Inc. Additional investments in the quarter totaled $6.2 billion.