SoftBank reports $251 mn net profit in Q3 as tech portfolio valuations weaken

SoftBank reports $251 mn net profit in Q3 as tech portfolio valuations weaken

SoftBank also said that its deal to sell chip designer Arm to Nvidia had fallen through amid regulatory hurdles.

SoftBank reports $251 mn net profit in Q3 as tech portfolio valuations weaken
Reuters
  • Feb 08, 2022,
  • Updated Feb 08, 2022, 2:11 PM IST

SoftBank Group Corp reported on Tuesday that it had squeezed out a net profit of 29 billion yen ($251 million) for the quarter from October to December, as tech portfolio valuations weakened at its Vision Fund unit.

The result compared with a profit of 1.17 trillion yen in the same period a year earlier, when SoftBank booked what was at the time a record quarterly result as its portfolio rallied.

After tech unicorns plunged into the "valley of the coronavirus'' in the early days of the COVID-19 pandemic, SoftBank CEO Masayoshi Son rode a recovery in valuations as startups such as e-commerce firm Coupang came to market.

Now valuations are again under pressure as investors cast a sceptical eye over tech firms promising future profits and central banks move towards paring pandemic stimulus.

Many portfolio companies are trading below their listing price, with office-sharing firm WeWork, ridehailer Grab and used-car platform Auto1 all falling during the quarter.

The group's exposure to China has also affected performance, as regulators take action against tech firms. Shares of e-commerce giant Alibaba, in which SoftBank has a stake, dropped a fifth in the three months to the end of December.

Such assets are used by the group for loans as it invests through its Vision Fund unit, which runs the $100 billion Vision Fund and a smaller second fund.

SoftBank said separately on Tuesday its deal to sell chip designer Arm to Nvidia had fallen through amid regulatory hurdles.

The earnings come at a watershed moment for the conglomerate as senior executives exit the firm, including Chief Operating Officer Marcelo Claure, who led the restructuring of WeWork and launched the group's Latin American-focused fund.

Son, who three months ago said SoftBank was in a "blizzard ", will speak at a news conference at 4:30pm local time.  

Also Read: ‘Be more forceful in apology’, Piyush Goyal asks Hyundai over Kashmir posts

Also Read: 'Jhund' teaser out on YouTube; 'Kashmir Files' to release on March 11

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Read more!
RECOMMENDED