SoftBank Corp books 24% profit rise in first results announcement since IPO

5 Feb 2019

SoftBank Corp, the Japan-based mobile phone operator spun off from SoftBank Group Corp in what has been described as a ‘blockbuster’ initial public offering (IPO), reported a 24% rise in Q3 operating profit in its fledgling outing as a public company. In its fiscal third-quarter to 31 December 2018, SoftBank Corp booked operating profit of JPY191.6 billion (USD1.74 billion), up from JPY155.1 billion in the corresponding year-ago period, attributed to users switching to data-heavy plans ahead of the advent of 5G, and reiterated its forecast for operating profit of JPY700 billion for the full year – up 10% year-on-year – and above analysts’ consensus forecast of JPY691 billion. Reuters notes that the carrier’s results are important for its parent, since majority shareholder SoftBank Group Corp is dependent on the cash its telecoms unit generates in order to fund its investments. In the aftermath of the IPO, investors have been looking for reassurance that SoftBank can back up its promise of paying 85% of annual profit in dividends. The newly spun-off SoftBank Corp appears to have survived a turbulent inception, at least. It initially saw its share price tumble 15% post-IPO in December 2018, much to the dismay of its overwhelmingly domestic retail investor base, in a period that was adversely impacted by a network outage, regulatory pressure for it to lower its prices, competition from existing incumbents DOCOMO and KDDI, and the upcoming threat posed by market entrant Rakuten Mobile Network which is due to launch in October 2019.

Japan, SoftBank Corp, SoftBank Group Corp