SoftBank seen returning to profitability despite significant losses

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

SoftBank Group Corp is seen booking a 75% first-quarter profit plunge on Tuesday, albeit making a return to profitability, as the coronavirus outbreak continued to weigh on the tech bets of CEO Masayoshi Son’s $100 billion Vision Fund.

The Japanese conglomerate is expected to record operating profit of 171 billion yen ($1.62 billion) for April-June, showed the average of three analyst estimates compiled by Refinitiv. That would compare with 625 billion yen in the same period a year earlier.

Analysts grapple with uncertainty over how the Vision Fund values its portfolio of mostly unlisted technology firms. Faltering bets on startups such as shared office space firm WeWork pushed SoftBank to its deepest annual loss last year.

The performance of the Vision Fund’s public assets is likely to return SoftBank to profit in the first quarter, said analyst Kirk Boodry at Redex Research. Positive news include insurance startup Lemonade Inc’s LMND.N successful July listing.

Chief Executive Son has pivoted as plans faltered, jettisoning satellite operator OneWeb and launching a share buy-back funded by asset sales to support SoftBank’s share price.

The group has sold down stakes in e-commerce firm Alibaba Group Holding Ltd and wireless carriers SoftBank Corp and T-Mobile US Inc.

It is also looking at selling chip designer Arm, media reported, in a possible break from a firm Son praised as closely aligned with his vision but that has turned money losing under his watch.

SoftBank has struggled to attract capital for a second mega-fund given poor performance of the first and so has been investing its own money.

“With the amount of assets that have been sold, the next logical step is to move forward on Vision Fund 2,” Boodry said.

The value of SoftBank’s assets has returned to pre-coronavirus levels, Son said in June, referring to his preferred measure of success.

Reuters 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.