TOKYO (AFP) – Japanese investment giant SoftBank Group said yesterday it logged a net loss worth USD6.2 billion in the three months to September, as its bets on start-ups continue to struggle.
The company’s Vision Funds meanwhile saw a quarterly pre-tax loss worth JPY258.9 billion (USD1.71 billion), after seeing a profit of JPY61 billion in the April-June quarter.
SoftBank also had to account in anticipation for the bankruptcy of WeWork, an office-space start-up that had left expensive lessons for SoftBank founder Masayoshi Son who invested heavily in the firm.
Overall, SoftBank Group said its quarterly loss came to JPY31 billion (USD6.2 billion), compared with a JPY3-trillion profit seen a year ago, when the company benefited from sales of shares in Chinese e-commerce giant Alibaba.
Its quarterly sales were JPY1.67 trillion, compared with JPY1.6 trillion of the same period last year.
The company raised USD4.6 billion when it listed British chip designer ARM on Nasdaq in September.
But ARM remains a SoftBank subsidiary and the transaction did not impact the immediate loss or profit figures, although it reinforced the overall financial position of the group, the company said.
SoftBank Group did not issue annual forecasts.
Despite tough figures, SoftBank chief financial officer Yoshimitsu Goto kept an optimistic tone, insisting that the performance of Vision Funds is steadily improving since eyewatering falls seen during the pandemic that caused global economic disruptions.
“I hope you see once again that the worst is over for our company,” Goto told a press conference.
But “the environment remains severe,” he said.
He reiterated SoftBank’s commitment to artificial intelligence development.
He added that the bankruptcy of WeWork will not have any new material impacts on SoftBank’s financial report, but acknowledged that it has been a costly lesson after pouring roughly USD14 billion.
“It was very unfortunate. We as a company accept this outcome and we have to learn from this lesson,” he said.
As for the responsibility of Son over WeWork, Goto said, “It’s important that he uses this experience and gives his all to improving Vision Funds.”
The yen’s depreciation against dollar also hit international investments of SoftBank Group, analyst at Toyo Securities Hideki Yasuda told AFP before the official announcement.
“The overall investment environment during the latest quarter was rather negative,” he said.
But SoftBank holds a variety of investments that could quickly change their values, Yasuda added.
Goto of SoftBank also said many of its investments are struggling in the tough market environment and not yet showing their full potential, including some USD29 billion worth late stage portfolio.
