SoftBank 9M net income slumps 26% on Sprint Corp woes

10 Feb 2016

Tokyo Stock Exchange-listed SoftBank Group Corp has published its financial results for the nine months ended 31 December 2015 (9M/FY2015), confirming a 26% year-on-year fall in net income attributable to shareholders to JPY428.97 billion (USD3.6 billion) from JPY579.45 billion, as it struggles to turn around Sprint Corp, the US wireless carrier that SoftBank acquired for USD22 billion in 2013. Although Sprint has been engaged in a prolonged effort to revive its fortunes, concerns over the US unit’s USD32 billion debt have weighed heavily on the Japanese owner in recent weeks, with market jitters wiping value off its share price. While Sprint recently reported strong subscriber gains and revised upwards its financial targets, its parent’s shares have slumped to their lowest level in over two years.

On a more positive note, the Japanese group booked net sales of JPY6.81 trillion in the nine-month period under review, up 7.9% y-o-y, as operating income rose 18% to JPY875.32 billion and EBITDA climbed 24% to JPY1.90 trillion. Pre-tax profits slid 14%, however, to JPY918.21 billion from JPY1.07 trillion in 9M/FY2014 as SoftBank closed out 2015 with a total of 43.748 million cumulative mobile subscribers in its domestic market – including 4.171 million PHS users – down from 44.887 million a year earlier, while in the fixed line segment it had 4.847 million broadband subscribers, up from 4.256 million at 31 December 2014. Of these, 1.218 million were SoftBank Hikari (fibre using wholesale lines of NTT), 2.225 million were Yahoo! BB hikari with FLETS (packaged ISP connection via NTT’s FLETS service) and 1.404 million were Yahoo! BB ADSL connections.