SoftBank 9M net income up 20% to JPY1.01tn

15 Feb 2018

Japanese multinational conglomerate SoftBank Group Corp has reported a net income (attributable to shareholders) of JPY1.015 trillion (USD9.47 billion) for the nine-month period ended 31 December 2017, up 20% when compared to the JPY845.773 billion net profit booked in the same period last year. The Group said the strong performance was in part due to deferred taxes on its US telecom venture Sprint. Net revenue rose 3.5% year-on-year to JPY6.811 trillion from JPY6.581 trillion, operating income was up by 23.6% at JPY1.149 trillion (an operating margin of 16.9%), and adjusted EBITDA stood at JPY2.056 trillion from JPY1.992 trillion in the corresponding year-ago period; EBITDA margin was broadly unchanged at 30.2% (down 0.1 of a percentage point y-o-y). Nine-month CAPEX, meanwhile, totalled JPY762.802 billion.

In terms of the Group’s main business segments, SoftBank’s Domestic Telecommunications unit booked revenue of JPY2.406 trillion and EBITDA of JPY964.020 billion in the nine-month period under review. The Japanese carrier had 42.477 million mobile subscribers at 31 December 2017, down from 42.826 million a year earlier, while cumulative broadband subscribers reached 6.832 million from 5.860 million at end-2016. Within this figure, SoftBank reported a total of 5.787 million fibre broadband customers (SoftBank Hikari or Yahoo! BB hikari with FLETS), up from 4.646 million, and 1.0145 million Yahoo! BB ADSL connections (down from 1.213 million).

The Sprint segment booked net sales of JPY2.722 trillion in fiscal 9M17, up 2.6% when compared to the corresponding period a year ago, as segment income soared to JPY291.841 billion from JPY145.186 billion and adjusted EBITDA reached JPY938.825 billion from JPY787.723 billion previously. The US wireless operator closed out December 2017 with a total of 54.581 million mobile users, up 2.4% y-o-y, of which 13.642 million were attributed to ‘wholesale and affiliates’. Recently, talks of a merger between Sprint and US-based telecom company T-Mobile US collapsed, which also led to a fall in share price. Speaking during the company’s presentation, however, SoftBank CEO Masayoshi Son said that while some may think Sprint ‘is a troubled company’, they are making a ‘steady turnaround’.

Apart from its domestic telecom operation and Sprint, the conglomerate’s other businesses include UK-based chip designer ARM Holdings, Yahoo! Japan, Chinese multinational e-commerce firm Alibaba Group and Fortress Investment Group. SoftBank has also funded various companies around the world through its USD93 billion Vision Fund.

SoftBank Group Corp is also considering listing its domestic wireless business to raise as much as USD18 billion from an IPO that it hopes will ‘accelerate the conglomerate’s transformation into one of the world’s biggest tech investors’. If completed, the spin-off will not only be the largest seen in Japan for 20 years but it will also give the mobile arm more autonomy over its future direction. Shares in the Group climbed 4% on the news. The Group will reportedly seek approval from the Tokyo Stock Exchange as early as spring and aims to debut in Tokyo as well as overseas, possibly London, around autumn.