SoftBank reports 57.5% increase in net income in 1H16

7 Nov 2016

Japanese telecoms heavyweight SoftBank Group Corp has reported a 57.5% year-on-year increase in net income to JPY800.948 billion (USD7.76 billion) in the six months to end-September 2016 (group fiscal H1 2016), while operating profit inched up 3.5% on an annualised basis to JPY653.944 billion. SoftBank, which operates Japan’s third largest mobile carrier by subscribers and owns a majority stake in struggling US cellco Sprint, surprised the market in July 2016 when it agreed a USD32 billion deal to acquire UK-based chip designer ARM Holdings (consolidated on 5 September); subsequently, the company established a new reportable segment (ARM) in the second quarter of its financial year.

The group’s ‘Sprint Segment’ reported net sales of JPY1.723 trillion in the six months to 30 September 2016, down 11.5% y-o-y, while segment operating income increased 28.5% to JPY104.565 billion, on the back of lower operating expenses, which decreased by 12.4% y-o-y due to the cost reduction initiatives particularly in areas such as networks, advertisement, and personnel cost related to customer cares. Further, segment EBITDA improved by 1.6% y-o-y in the period under review, reaching JPY516.924 billion (JPY508.778 billion in H1 2015). In operational terms, Sprint had 60.193 million subscribers on its books at end-September, equivalent to a net addition of 1.387 million in the twelve-month period (58.806 million in September 2015).

Meanwhile, SoftBank’s ‘Domestic Telecommunications’ segment, which comprise its wireless, broadband and fixed line subsidiaries in Japan, saw net sales rise 3.1% to JPY1.555 trillion in fiscal H1, which it noted ‘reflected a 56.1% increase in broadband revenue following steady expansion of its SoftBank Hikari fibre-optic service’. The total number of high speed internet subscribers stood at 5.600 million at end-September 2016, up a net 521,000 on the year-ago period, driven by a 982,000 net increase in SoftBank Hikari connections, offset by 367,000 net losses for Yahoo! BB hikari FLETS users and 94,000 fewer Yahoo! BB ADSL users. On the other hand, mobile communications revenue decreased by JPY13.255 billion (1.4%) y-o-y to JPY971.413 billion, mainly reflecting ‘an increase in the total amount of discounts (i.e. negative impact on revenue) associated with growth in the cumulative number of applications of the Home Bundle Discount Hikari Set and a decrease in PHS subscribers.’

Japan, United States, SoftBank Corp, SoftBank Group Corp, Sprint Corporation