SoftBank Group Corp.’s first-quarter profit climbed 49 percent from a year earlier, thanks to investment gains.
The Japanese telecommunications provider and technology investor said operating profit was 715 billion yen ($6.4 billion) in the three months ended June, boosted by a 245 billion yen gain from its Vision Fund and a 161 billion yen gain on the sale of subsidiary ARM’s Chinese unit. Revenue was 2.27 trillion yen.
Founder Masayoshi Son has shifted his focus to the company’s longer-term future and investments in overseas technology companies.
Last year, he formed the Vision Fund, raising almost $100 billion from big backers including Saudi Arabia, Abu Dhabi and Apple.
Son has said the fund represents the transformation of SoftBank from a telecoms conglomerate to a holdings group with investments in the world’s most influential technology companies.
“The Vision Fund will continue to deliver results every year and increase its value,” Son said at a briefing in Tokyo on Monday. “We are creating a group of the world’s most advanced unicorn companies.”
The Vision Fund portfolio ranges from ride-hailing companies, digital payments and satellites to semiconductors, agriculture and cancer detection.
The fund’s contribution in the first quarter was mainly due to a valuation gain from the planned sale of Flipkart Online Services Pvt, the leading Indian e-commerce player, to Walmart and increase in fair value of WeWork Companies.
While SoftBank’s income and valuation become more dependent on investments, Son has been taking steps to separate the company’s wireless operations. The proposed $26.5 billion takeover of SoftBank’s US unit Sprint Corp. by T-Mobile US would combine the No. 3 and No. 4 wireless providers in the US The two carriers have been pitching their deal as a combination of underdogs trying to better compete against industry giants AT&T Inc. and Verizon Communications Inc.
SoftBank is interviewing banks to arrange the IPO of its domestic wireless business and plans to select several lead underwriters as early as August, people with knowledge of the matter have said.
Foreign and local investment banks have been making formal pitches to SoftBank over the past few weeks, according to the people, who asked not to be identified because the information is private. The company aims for the mobile unit to begin trading in Tokyo in October and the offering could raise more than 2 trillion yen, they said.
Revenue from domestic telecom operations, which include wireless, broadband and fixed-line services, rose 4.6 percent to 880.5 billion yen in the quarter. Profit was little changed. SoftBank had 33.6 million mobile subscribers, an increase of 434,000 from the previous quarter.
Earnings from the operations may come under pressure as billionaire Hiroshi Mikitani’s Rakuten Inc. plans to become the country’s fourth major mobile-phone operator. Son, whose acquisition of Vodafone’s Japan business in 2006 was the industry’s biggest shakeup in recent history, has said he welcomes the competition.
“We have to go beyond being just a carrier in a maturing industry,” Son said. “That’s why we are planning to rapidly increase collaboration with the Vision Fund.”
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