TOKYO - Japanese investment giant SoftBank Group on Thursday reported a net profit of 950 billion yen ($6.4 billion) for October-December 2023, returning to the black after four consecutive quarterly losses. The group’s bets on volatile tech firms and start-ups -- championed by flamboyant founder Masayoshi Son -- have made for rollercoaster earnings seasons in recent years. SoftBank, which last saw quarterly net profit in July-September 2022, said Thursday’s strong result was driven by profit from tech investments and derivative-related gains.
A bumper third quarter had been predicted by analysts, who said SoftBank would benefit from a recovery in the value of tech-related shares and a T-Mobile stock windfall. “The company acquired 48.8 million shares of T-Mobile stock equivalent to $7.74 billion (1.1 trillion yen) for no additional consideration on December 28, 2023,” SoftBank said in a statement explaining the results on Thursday. Even so, in the first nine months of the 2023-24 financial year, SoftBank logged an overall net loss of 458.7 billion yen. The group does not issue annual forecasts.
In the 2019-20 financial year, the company reported a record net loss as the start of the pandemic compounded woes caused by its investment in troubled office-sharing start-up WeWork. But it then reported Japan’s biggest-ever annual net profit in 2020-21, as people moved their lives online during the Covid pandemic, sending tech stocks soaring. More recently, however, tech share routs and the cheaper yen have bruised the company’s overall profits.
“The market has been difficult overall,” Hideki Yasuda, an analyst at Toyo Securities, told AFP. “SoftBank’s performance and the value of unlisted stocks are at the mercy of the overall condition of the market.” Nonetheless, “Son’s investment philosophy is long-term investment,” including putting his faith in the increasing value of artificial intelligence, Yasuda said. “For now, we use AI like we are playing with new toys. We are yet to see the technology being fully utilized,” so “if you ask if Son is paying too much for his investment, it is not necessarily so,” he said. SoftBank Group raised $4.6 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 for the second quarter, although it reinforced the overall financial position of the group, the company said in November.