Japan’s SoftBank posts record annual profit as tech investments swell

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Tokyo | Published: May 9, 2018 1:32:19 PM

Japan's SoftBank Group Corp reported a record annual operating profit, in line with analyst estimates, buoyed by its investments in technology firms around the world.

SoftBank, Japan, SoftBank Grup, Uber, Wag, Katera, tech firm, masayoshi son Profit for the year ended March rose to 1.3 trillion yen (.87 billion), from 1 trillion yen a year ago, SoftBank said. (Reuters)

Japan’s SoftBank Group Corp reported a record annual operating profit, in line with analyst estimates, buoyed by its investments in technology firms around the world. Profit for the year ended March rose to 1.3 trillion yen ($11.87 billion), from 1 trillion yen a year ago, SoftBank said. Steered by founder and CEO Masayoshi Son, SoftBank has become a top global technology investor as it looks to create a group of leading companies powered by interconnected devices and artificial intelligence.

SoftBank’s private equity arm had invested $29.7 billion in 25 tech firms, such as dog-walking app Wag and construction startup Katerra, as of the end of March. Separately, SoftBank has invested a total of $12.9 billion in ridesharing firms Uber and Didi Chuxing, the company said on Wednesday, adding that these investments may be offered to the Vision Fund at a later date.

The telecoms and tech firm has attracted financing from sovereign wealth funds and tech firms to create the Vision Fund. As of last May, it had raised over $93 billion, making it the world’s largest private equity fund. SoftBank is planning a public listing of its domestic telecoms unit this year. It is also considering raising billions of dollars of loans though its UK-based tech firm ARM Holdings, banking sources told Reuters in March.

SoftBank did not release a forecast for the current business year, saying there were too many uncertain factors. SoftBank shares were up about 1 percent, in a wider market that was down half a percent. However, SoftBank shares are down 4 percent so far this year. Investor confusion over how mutually suppportive SoftBank’s dizzying array of investments are has contributed to the “conglomerate discount” that has weighed on its share price.

CEO Son recently decided to let go of one of SoftBank’s biggest overseas bets, U.S. wireless carrier Sprint Corp, which will merge with T-Mobile US Inc after struggling to compete with bigger rivals.

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