Softbank’s US$45.8 bil annual net profit highest ever in Japan

TOKYO – Investment giant Softbank Group today reported an annual net profit of US$45.8 billion (RM189.06 billion), the best ever for a Japanese company, reaping the rewards of tech share rallies to recover from last year’s record loss.

The telecoms firm turned investment behemoth has poured money into some of Silicon Valley’s biggest names and hottest new ventures, from artificial intelligence to biotech, through its US$100 billion Vision Fund.

“The technology sector, where the company focuses its investment strategies, has been positively impacted by the accelerated adoption of digital services to address the pandemic,” said SoftBank in a statement.

“However, there is no guarantee that the current positive impact will be sustained in light of uncertainties associated with the pandemic.”

Net profit for 2020-21 was ¥4.99 billion (RM189.06 billion), it said, exceeding its target and putting it in the ranks of the world’s most profitable companies.

In 2019-20, SoftBank reported a net loss of ¥961.6 billion, a record for the company, as the start of the Covid-19 crisis compounded woes caused by its investment in troubled office-sharing start-up WeWork.

But, it quickly returned to profit as the impact of virus lockdowns worked largely in SoftBank’s favour, with rising valuations for firms in its portfolio suited to the era.

South Korean e-commerce giant Coupang, backed by SoftBank, in March raised more than US$4 billion in its initial public offering – making it the biggest listing in the United States so far this year, as people flocked to shop online during lockdowns.

The value of the Vision Fund’s stake in US food delivery app DoorDash also rose massively following its IPO last December.

CEO Masayoshi Son, Japan’s richest person according to Forbes, in February hailed the Vision Fund as a “goose that produces golden eggs”.

Having transformed SoftBank into an investment giant, Son has battled critics of his commitment to sometimes-troubled start-ups, and brushed aside doubts over a massive asset sale programme. – AFP, May 12, 2021