SoftBank profit climbs in third quarter

8 Nov 2018

SoftBank Group Corp published its latest financial results this week, which highlighted that its profit in its fiscal second quarter to 30 September 2018 exceeded analyst estimates, indicating that its founder, Masayoshi Son, is beginning to reap the benefit of his group’s wide-ranging tech deals. SoftBank reported that operating profit rose to JPY705.7 billion (USD4.7 billion) in the three-month period under review, compared with the JPY373 billion average of analysts’ estimates compiled by Bloomberg. Revenue in the three-month period stood at JPY2.4 trillion, compared to JPY2.2 trillion in the corresponding period of 2017, as EBITDA increased to JPY861.6 billion and net income rose sharply to JPY533.8 billion from JPY113.2 billion. Industry watchers note that the Japanese group is shifting away from being a pure telecoms operator and turning itself into a technology investment firm – in no small part thanks to its USD100 billion Vision Fund. Technology investments contributed JPY393 billion to SoftBank’s profit in July-September 2018, eclipsing the total of JPY313 billion generated by all of its other businesses combined. Here, Son’s company reportedly cited ‘increased valuations of India’s online hotel start-up Oyo Rooms and graphics card maker Nvidia Corp’. SoftBank’s stake in the former has ‘doubled in value’ to about USD200 million since July 2015, while shares of Nvidia rose 19% last quarter, Bloomberg notes.

However, news of the Group’s strong financial results may yet be overshadowed by market concerns over the upcoming listing of SoftBank’s domestic telecom operations and the company’s close relationship with Saudi Arabia following the death of the journalist Jamal Khashoggi; almost half the money in the SoftBank Vision Fund comes from Saudi Arabia, which has pledged a further USD45 billion in 2018. Some suggest that the Japanese carrier may have to revise its plan to raise JPY3 trillion via the mobile unit’s IPO next month after rival NTT DOCOMO said it will comply with government pressure to cut mobile call rates.

Japan, SoftBank Group Corp