With the support of an improvement in its portfolio firms, Japan's SoftBank Group generated a profit for the first time in five quarters on Thursday, raising hopes that it was coming out of a period of layoffs. In the three months ending in December, net profit came to 985.5 billion yen ($6.6 billion), as opposed to a deficit of 744.7 billion yen during the same time the previous year.
SoftBank, which was founded by Chief Executive Masayoshi Son, has experienced a challenging time wherein it has had to reduce investment activities and sell assets through its Vision Fund investment arm. A decrease in risk appetite during the epidemic and its aftermath particularly hurt stakes in high-growth firms.
Even though SoftBank's results are frequently unpredictable, the company's quarterly net income exceeded market projections and its closely-monitored Vision Fund division recorded a 600.73 billion yen profit on investments, which may assuage investors' concerns. Chief Financial Officer Yoshimitsu Goto told the press that SoftBank was once again on a "growth trajectory" and that both the market and the future were "very positive."
The Vision Fund business, which consists of two funds bearing the same name, benefited from higher valuations for holdings including Didi Global, the owner of TikTok, ByteDance, and the robotics company AutoStore Holdings. In the meantime, the company's quarterly investment in the office-sharing startup WeWork was written down to zero.
"Recent funding rounds have seen increased valuations for enterprises under the Vision Fund. The climate for software entrepreneurs appears to be improving, according to Rolf Bulk, an analyst with New Street Research. Even though there wasn't much new investment activity during the quarter, Goto claimed that this was only an issue of time and that the pipeline of potential investments was growing.
He continued by saying that SoftBank's top goal was to make fresh investments using its substantial liquidity, which included 4.4 trillion yen in cash, cash equivalents, and liquid bond holdings. Goto stated that at the moment, expansion investment comes first. Some investors had been wondering if SoftBank would buy back some of its shares to give money to shareholders.
