SoftBank earns ¥1.56 trillion in half-year following Vision Funds bounce back

SoftBank's Vision Funds reported that gains from investments experienced a ¥1.9 trillion swing year-on-year to now be worth ¥1.4 trillion.
Written by Campbell Kwan, Contributor

SoftBank's Vision Funds have bounced back after a year of turbulence, with the funds reporting that their half-year gains on investments were ¥1.4 trillion, which is a ¥1.9 trillion swing from the ¥530 billion loss experienced a year ago. 

As of September, the fair value of the first fund is $76.4 billion, slightly north of the $75 billion paid for its 83 investments, it said. Meanwhile, the smaller second fund saw its fair value increase from $2.6 billion to $7.6 billion following the listing of its investment Ke Holdings, SoftBank added.

This led to the Vision Fund's earnings going back into the black for the half year, going from a ¥400 billion loss to a ¥913 billion profit.

Looking at SoftBank Group's total half-year results, the company on Monday posted that it earned profit of ¥1.56 trillion, which is a bounce back from the ¥47.7 billion loss it suffered a year ago. 

The Japanese conglomerate also posted ¥2.6 trillion in net sales, which is a 3.6% year-on-year improvement.

Elsewhere, Softbank's telco remained steady for the half year, posting ¥2.43 trillion in revenue and ¥346.6 billion in net income. These were similar figures to those posted in the same period last year. 

The consumer segment was once again the main contributor for the telco, chipping in ¥1.3 trillion worth of revenue and ¥406.3 billion in income.

In that span, the telco's total cumulative subscribers increased by 790,000 to around 46.6 million from its three brands SoftBank, Y!mobile, and Line Mobile. The average revenue per user dropped by ¥150, however, to ¥4,300.

For broadband, its total cumulative subscriber base increased by 248,000 to 8 million. Subscriptions primarily come from SoftBank Hikari, which had 6.7 million subscribers as of September.

SoftBank Group's Arm segment, meanwhile, did better during the half year compared to last year, increasing its sales by 19.7% year-on-year to almost ¥106 billion. This was largely attributed to Arm's technology licensing revenue increasing by over 30% year-on-year due to strong demand for the company's new technologies. 

Despite this growth, the company continued to operate in the red, posting a ¥24.8 billion loss.

The UK-based semiconductor subsidiary is set to be sold to Nvidia for $40 billion, with SoftBank announcing the sale in September. 

If the deal clears regulatory approval, SoftBank will be left with its stake in Alibaba, a 40% stake in its Japanese telco, an 8.6% stake in T-Mobile, and investments from the Vision Funds.

The sale of Arm follows SoftBank finalising the sale of its stake in T-Mobile for ¥422 billion earlier in the half year. 

In posting SoftBank Group's half-year results, founder and chairman Masayoshi Son said four of Vision Fund's directors, including Vision Fund CEO Rajeev Misra and COO Marcelo Claure, resigned from its board and were reassigned as corporate officers. 

Son said the aim of the board reshuffle was to strengthen governance by increasing the portion of external directors.

Son also provided an update on SoftBank's ¥4.5 trillion ($41 billion) share buyback and debt reduction scheme, saying the company exceeded its goal and actually sold or monetised ¥5.6 trillion worth of assets, which excludes the potential sale of Arm. He did not reveal how the proceeds from the asset sales that were in excess of the target amount would be used, however. 

SoftBank's half-year results continue the momentum built from its first-quarter performance, where its net income increased by 12% year-on-year to ¥1.25 trillion.

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