Vision Fund gains drive SoftBank profit to $6B

Japan-based SoftBank Group booked a profit of $6.07 billion in its fiscal Q2 ending 30 September, driven by a surge in the value of its Vision Funds.

Net income in the quarter ending 30 September hit JPY627.5 billion, rebounding from a loss of JPY700.2 billion in the same period a year earlier. Net sales increased 4.5 per cent year-on-year to JPY1.35 trillion.

The Vision Fund and Vision Fund 2 posted gains of JPY1.04 trillion, while other investments saw income increase JPY81.2 billion, recovering from a loss of JPY1.43 trillion on investments in the same period in 2019.

The gain in Vision Fund 2 was led by the rising value of China-based real estate start-up KE Holding, which was listed in August. SoftBank said the fund recorded an unrealised gain of JPY537 billion on the online platform.

SoftBank launched the $100 billion Vision Fund in 2017, investing in 83 tech start-ups and kicked off a second similar fund in 2019. In the January to March period, SoftBank wrote down the valuations [1] of companies in the funds such as Uber and WeWork by billions.

The fiscal Q2 results were dampened by a $2 billion loss in its asset management unit holding a range of listed tech companies due to derivative losses, Nikkei Asia Review reported.

In March, the group approved plans to sell up to JPY4.5 trillion of assets [2] to reduce its massive debt and buy-back JPY2 trillion worth of shares.

Its share repurchases in 2020 reached JPY179.4 billion as of 31 October after buying back shares valued at JP139.3 billion in October.

The Japanese conglomerate announced in September a $40 billion deal to sell chip designer Arm to Nvidia [3], while in August it outlined plans to sell another portion of its domestic mobile business, seeking to raise $12.6 billion.

[1] https://www.mobileworldlive.com/featured-content/top-three/softbank-suffers-record-loss-on-vision-fund-woes
[2] https://www.mobileworldlive.com/featured-content/top-three/softbank-to-offload-41b-in-assets-to-cut-debt
[3] https://www.mobileworldlive.com/featured-content/home-banner/brightstar-on-the-block-as-softbank-sheds-more-assets

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