SoftBank recently reported a 724.3 billion Japanese yen gain on its Vision Fund in the fiscal year ended March, marking the first time the flagship tech investment arm has been in the black since 2021. This turnaround in performance is significant as the Vision Fund segment posted a profit of 128.2 billion yen for the full fiscal year, swinging from a 4.3 trillion yen loss the previous year. While this is a positive development, it’s important to note that SoftBank took a hit on some of its investments such as Chinese ride-hailing firm DiDi and office sharing company WeWork.
The gain in the Vision Fund can be attributed to the increase in value of some of SoftBank’s high-profile investments, including TikTok owner ByteDance and U.S. food delivery firm DoorDash. One of the key contributors to this gain was the initial public offering of chip designer Arm, a subsidiary of Softbank. It’s worth mentioning that gains associated with the IPO of Arm are not reported in SoftBank’s consolidated statement of profit or loss. Despite this gain, the tech investment arm still posted a loss of 167.3 billion yen when excluding gains associated with investments in its subsidiaries.
In the March quarter, SoftBank’s net sales were reported at 1.75 trillion yen ($11.3 billion), which slightly fell short of the 1.84 trillion yen expected. However, net profit for the same period was 231.1 billion yen, surpassing the expected loss of 71.64 billion yen. For the full fiscal year, SoftBank posted an overall loss of 227.6 billion yen, an improvement from the 970.1 billion yen loss in the previous year. Despite the challenges faced by the Vision Fund, there are signs of a recovery underway for SoftBank.
SoftBank founder Masayoshi Son had indicated in 2023 a shift towards an “offense” mode from a defensive stance, signaling a more proactive approach to investments. The company’s Chief Financial Officer Yoshimitsu Goto highlighted the transition from an “Alibaba to AI-centric portfolio,” emphasizing the importance of artificial intelligence technology in their future investments. The significance of Arm in SoftBank’s portfolio has grown substantially, with the company accounting for 47% of assets held as of March. This shift in focus reflects SoftBank’s commitment to embracing emerging technologies and seizing investment opportunities in the sector.
Overall, while SoftBank faced challenges in the past fiscal year, the positive performance of the Vision Fund and strategic shifts within the company indicate a promising future. With a focus on innovative technologies and a proactive investment strategy, SoftBank is poised to capitalize on emerging opportunities and drive growth in the tech sector.
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