SoftBank Group Corp net income surpasses expectations on Vision Fund contribution

7 Aug 2019

Japan’s SoftBank Group Corp has released its financial results for the three-month period ended 30 June 2019 (Q1/FY2019) reporting a better-than-expected quarterly operating profit as a result of strong investment gains from its USD100 billion Vision Fund. SoftBank, the group founded by Masayoshi Son, said on Wednesday that operating profit attributable to the Saudi-backed Vision Fund surged 66% year-on-year to JPY397.6 billion for the three months under review – albeit Reuters notes that much of the Fund’s gains are ‘paper profits’, with its unrealised gains in the first quarter totalling JPY604 billion.

SoftBank Group Corp, which is currently preparing to launch a second Vision Fund (with pledges already standing at USD108 billion), booked net revenue of JPY2.336 trillion (USD21.96 billion) in Q1/FY2019, up 2.8% y-o-y as pre-tax operating profit rose 194% to JPY1.682 trillion and net income (attributable to owners of the parent) ballooned to JPY1.122 trillion from JPY313.687 billion in Q1/FY2018. The group attributed part of the strong rise in profit to a ‘gain relating to settlement of variable prepaid forward contract using Alibaba shares of JPY1.219 trillion; the impact on income was JPY856.8 billion, net of the JPY361.8 billion impact on income taxes caused by a reversal of deferred tax assets.’

In terms of key operational highlights, SoftBank Group Corp noted that its Vision Fund held 81 investments as of the first quarter-end. During the first quarter, two investees, Uber and Slack, became publicly listed issuers, while WeWork and CloudMinds have filed documents related to initial public offerings. Further, the merger of US entities Sprint and T-Mobile received approval with conditions from the US Department of Justice in July 2019 – moving the merger one step closer to completion. Finally, it noted that SoftBank Corp made Yahoo Japan Corporation a subsidiary during Q1/FY2019.

Japan, SoftBank Corp, SoftBank Group Corp