SoftBank estimated it will post a record deficit in its fiscal year ending 31 March, as it expects to book a JPY1.8 trillion ($16.7 billion) loss from its troubled Vision Fund.
In a forecast, SoftBank predicted it will record a net loss of JPY750 billion in its fiscal 2019 versus a JPY1.41 trillion profit in fiscal 2018. Sales are expected to fall 36 per cent year-on-year to JPY6.15 trillion, after the recent merger of its US operator Sprint [1] with T-Mobile US: SoftBank said its annual results will retrospectively revised to reflect the reclassification of Sprint as discontinued operations.
It also wrote off JPY800 billion in losses from its own investments, including stakes in office space sharing company WeWork and satellite operator OneWeb, which initiated bankruptcy proceedings [2] late last month.
SoftBank said an expected operating loss of JPY1.35 trillion was mainly attributed to the predicted Vision Fund loss, which it stated was caused by “a decrease in the fair value of investments due to the deteriorating market environment”. It didn’t specificy which start-ups were marked down.
Bloomberg estimated the Vision Fund wrote down JPY1 trillion in assets in the January to March period.
In mid-February, SoftBank reported its fiscal Q3 operating profit plunged to JPY2.6 billion [3] from JPY438 billion in fiscal 2018, as the Vision Fund slipped from a profit of JPY176 billion to a JPY225 billion loss.
SoftBank last month approved the sale of up to JPY4.5 trillion of assets to reduce its massive debt [4] and buy-back JPY2 trillion worth of shares.
[1] https://www.mobileworldlive.com/featured-content/top-three/legere-leaves-as-t-mobile-sprint-complete-merger/
[2] https://www.mobileworldlive.com/featured-content/home-banner/oneweb-seeks-safe-harbour-as-covid-19-halts-finance/
[3] https://www.mobileworldlive.com/featured-content/top-three/softbank-profit-plunges-on-vision-fund-woes/
[4] https://www.mobileworldlive.com/featured-content/top-three/softbank-to-offload-41b-in-assets-to-cut-debt/
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