SoftBank quarterly group turnover up 4%; USD30bn IPO target rumoured

7 Aug 2018

Japan’s SoftBank Group Corp reported a 4.0% year-on-year increase in consolidated net turnover to JPY2.27 trillion (USD20.41 billion) in the three months ended 30 June 2018, the first quarter of its fiscal year. The revenue uptick was driven by rises in the SoftBank (Japanese telecoms), Yahoo Japan (online services) and Brightstar Global (handset distribution) segments, partially offset by net sales decreases at US cellco subsidiary Sprint and UK-based chipmaker ARM. Adoption of new accounting standards had a positive effect of JPY25 billion on consolidated revenue. Consolidated April-June operating income jumped by 49.2% y-o-y to JPY714.99 billion, and quarterly net income attributable to owners of the parent reached JPY313.69 billion (year-ago quarter: JPY5.52 billion). Profitability was driven by the JPY161 billion sale of ARM’s Chinese unit and a JPY245 billion boost from the SoftBank Vision Fund technology venture.

SoftBank’s Japanese mobile/broadband/wireline operating segment reported a 4.6% y-o-y rise in total net sales to JPY880.46 billion in the quarter – despite a negative effect from adopting the new accounting standards on the domestic unit – with a slight (0.1%) increase in adjusted quarterly EBITDA to JPY334.02 billion. Mobile subscribers reached 33.61 million at 30 June 2018, an increase of 434,000 in three months (and up from 32.45 million twelve months earlier), with an underlying quarterly 576,000 net increase in smartphone users attributed to steady growth in Y!mobile and SoftBank brand subscribers, as well as the addition of LINE Mobile MVNO customers (consolidated in April 2018). The mobile figures included 325,000 subscribers to the Wireless Home Phone converged service (launched in July 2017).

Total fixed broadband customers reached 7.219 million at end-June 2018, up by 179,000 in the quarter (and compared to 6.403 million a year earlier); ‘SoftBank Hikari’ direct fibre subscribers over the group’s own access network accounted for 5.257 million (73%) of the broadband total, up by 283,000 in three months (and compared to 4.012 million in June 2017), driven by discounted bundling of home fibre internet with smartphone services.

SoftBank Group Corp is currently considering seeking an approximate USD90 billion valuation for its Japanese wireless business in a planned initial public offering (IPO), according to Bloomberg citing ‘people familiar with the matter’. SoftBank is reportedly speaking to advisers about selling a third of the business for around USD30 billion, which would beat 2014’s record USD25 billion IPO of Chinese e-commerce group Alibaba (in which SoftBank also owns a stake).

Japan, SoftBank Corp, SoftBank Group Corp