TOKYO: SoftBank Group posted its first profit in five quarters on Thursday thanks to the increased value of publicly listed investments, marking a turnaround for the Japanese company after a period of slashing investment activity and selling off assets.
October-December net profit reached 985.5 billion yen ($6.6 billion), versus a 744.7 billion yen loss in the same period a year earlier that was brought about by a drop in the valuation of unlisted Vision Fund unit investments.
This time, the Vision Fund unit booked an investment profit of 600.73 billion yen as publicly listed assets performed well.
Many investments in high-growth startups fell in value under the higher interest rate environment that followed the coronavirus pandemic.
While many private investments were marked down in the latest reporting quarter, its public investments pushed the group into profit.
SoftBank also netted $1.825 billion in gains on the T-Mobile US shares it received last year after conditions in its 2020 deal to sell U.S. mobile carrier Sprint to T-Mobile were met. The gains reflect an accounting time lag in assessing the fair value of the shares.
SoftBank has ramped up new investment activity, including 309 billion yen together with wholly owned subsidiaries, as well as $1.45 billion in new Vision Fund investment – more than double the combined $1.5 billion worth of investments the last quarter.
CEO Masayoshi Son is known for having made canny bets on emerging technology such as on mobile internet and today’s big names such as Chinese e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.
However, some of his more recent wagers have turned sour, most notably U.S. shared office provider WeWork that was once privately valued at $47 billion but filed for bankruptcy in November.