SoftBank seen booking 75% first-quarter profit drop as it returns to profitability

SoftBank

SoftBank Group is seen booking a 75 percent first-quarter profit plunge, albeit making a return to profitability, since the COVID-19 outbreak continued to weigh on the platform and general technology bets of Chief Executive Officer Masayoshi Son’s $100 billion Vision Fund.

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

Analysts grapple over the Vision Fund values its portfolio of mostly tech companies that are unlisted. Faltering bets on startups such as shared office space company WeWork pushed SoftBank to its yearly loss last year.

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

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

The team has sold down bets in e-commerce company Alibaba Group and wireless carriers SoftBank Corp and T-Mobile US Inc.

It is also considering selling chip designer Arm, media reported, in a break that was potential from a firm Son praised as closely aligned with his eyesight but that’s turned money losing under his view.

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

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

The value of SoftBank’s assets has returned to floors, Son said in June, referring to his measure of success.

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The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Reuters. Reporting by Sam Nussey. Editing by Christopher Cushing.

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