Analysts were hoping for a return to profitability for SoftBank in the build-up to its first quarterly earnings call for the 2023 financial period.
Unfortunately, the sprawling Japanese conglomerate ended up posting the third quarterly loss in a row.
Though SoftBank’s flagship Vision Funds did indeed record a 159.8 billion yen (£877 million) gain on investments, this was attributed to an increase in the fair value of its stake in unlisted British semiconductor designer Arm Holdings.
Per consolidated financial reports, SoftBank Vision Funds actually posted a quarterly investment loss of 13 billion yen.
This loss was due to a 38.7 billion yen loss at SVF1 and a 46.9 billion yen loss at SVF2, partially offset by a 47.5 billion yen gain in LatAm Funds.
The losses at SVF1 and SVF2 were mainly due to the full exits of two private portfolio companies and the partial exits of several public portfolio companies, as well as unrealised valuation losses for investments held at the end of the first quarter.
The ‘Investment Business of Holding Companies Segment’, comprising some 120 portfolio companies, posted an investment loss of 689.7 billion yen due to share price declines in cornerstone investments Alibaba, Deutsche Telekom and T-Mobile.
SoftBank has been forced to write down huge swathes of its tech investments over the past year, including the group’s entire investment (estimated at US$100 million) in collapsed cryptocurrency exchange FTX.
In the most recent quarter, SoftBank’s financial position was impacted by a finance cost of 139. billion yen and a foreign exchange loss of 464.6 billion yen due to the weaker domestic currency.
This all added up to net losses attributable to the parent of 477.6 billion yen (£2.6 billion), whereas analysts had their fingers crossed for a 75 billion yen (£410 million) profit.
Though underwhelming, SoftBank’s results were a huge year-on-year improvement. In the first quarter of 2022, SoftBank racked up 3.16 trillion yen of losses.
Perhaps that explains why, despite an underwhelming quarter, SoftBank’s share price added 2.5% on the Tokyo Stock Exchange today.