SoftBank Group Corp. on Monday said net profit rocketed to ¥1.17 trillion in the third quarter as stock rallies and asset sales helped it solidify its recovery.
The figure for October-December was more than 21 times higher than the ¥55 billion reported a year earlier, the conglomerate said.
Consolidated net profit for April-December was ¥3.05 trillion, a figure that SMBC Nikko Securities Inc. said was a record high for a Japanese company for the fiscal first three quarters.
Despite the results, SoftBank Group said it would not provide “forecasts of consolidated results of operations as they are difficult to project due to numerous uncertainties affecting earnings.”
But the economic crisis that has accompanied the coronavirus pandemic has worked largely in SoftBank’s favor, with rallies in tech stocks it owns and rising valuations for firms in its portfolio suited to the era, including food delivery.
Founder Masayoshi Son, who has transformed the telecoms company into an investment and tech behemoth, has battled critics of his commitment to sometimes troubled startups, and brushed aside doubts over a massive asset sale program.
SoftBank has stakes in some of Silicon Valley’s hottest startups through its $100 billion Vision Fund.
And Son has consistently backed the firm’s worth, insisting its stock has been undervalued and its fundamentals remain strong despite wobbles including over office-sharing startup WeWork.
Government stimulus designed to combat the economic effects of the pandemic have helped bolster stock markets, to SoftBank’s benefit, said Masahiko Ishino, an analyst at Tokai Tokyo Research Institute.
The firm and its SoftBank Vision Fund “took full advantage of monetary easing,” he said before the results were released.
In the three months to Dec. 31, SoftBank Group recorded an ¥844 billion ($8 billion) profit at the Vision Fund, compared to a loss a year ago as it gained from investments in Uber Technologies and other companies.
With interest rates at rock bottom, an ebullient market is driving tech stock gains and turnaround at the Vision Fund unit. During the quarter Softbank-backed food delivery app operator Doordash and home selling platform Opendoor went public.
Almost half of the first Vision Fund’s portfolio was exited or listed at the end of December, offering liquidity to the fund whose backers include the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
The $100 billion Vision Fund’s 82 investments were valued at $90 billion, compared with their purchase price of $76.3 billion. The fund has also recorded $20.4 billion in gross gains since inception.
Vision Fund 2’s 26 investments were valued at $9.3 billion compared with their purchase price of $4.3 billion.
Softbank’s trading unit SB Northstar disclosed stakes in listed tech stocks including Taiwan Semiconductor Manufacturing Co. worth $22 billion at the end of December.
It recorded a ¥169.8 billion loss on its investments during the quarter.
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