SoftBank Group on Tuesday reported a net loss of JPY 783 billion (USD 5.9 billion) for the three months through December, as its Vision Fund business suffered from the tech market downturn, marking the company’s first loss in two quarters.
According to its financial statement, the Japanese group’s loss on its Vision Fund investments reached JPY 730 billion (USD 5.5 billion) for the quarter, as its portfolio startups continued to face a challenging environment stemming from rising interest rates and a worsening global economic outlook.
“We have been managing the Vision Fund under severe conditions over the past year,” Yoshimitsu Goto, the group’s chief financial officer, said at a news conference after the earnings announcement. “While maintaining the current tight management, we will carefully assess improvements in the environment and future investment opportunities.”
During the September to December quarter, the group logged unrealized valuation losses from many of its portfolio companies, including USD 1.1 billion from Indonesian tech group GoTo and USD 800 million from South Korean e-commerce operator Coupang as their share prices fell.
But Goto stressed that the quarterly loss from the Vision Fund investments narrowed for the third straight quarter from a peak of over USD 25 billion recorded in the January to March quarter.
“Trend-wise, the market hit the bottom within the past year or two, and we are seeing signs of a gradual upturn from there,” he said.
The latest results reversed a quarterly net profit of JPY 3.033 trillion (USD 23 billion) in the July-September quarter, when the Japanese group logged massive gains related to sales of its shares in China’s Alibaba Group Holding.
While SoftBank Group now focuses on defense for its Vision Fund investments—it invested only about USD 300 million during the quarter, a huge downshift from USD 9.6 billion a year earlier—it is preparing to list its U.K.-based chip design company, Arm.
Ian Thornton, Arm’s IR vice president, who also attended the news conference, said that the company aims for an initial public offering in 2023, adding that it is looking at all possible options for the venue, including the Nasdaq and London.
Chairman and CEO Masayoshi Son did not attend the news conference, as he said at the previous quarterly briefing that he would “devote [his attention] to Arm, at least for the next few years,” and adding that he would hand over more authority to Goto and other senior executives to handle earnings briefings and day-to-day management.
Reacting to a reporter who pointed out that some investors would prefer hearing directly from Son, Goto said that Son was not saying that he will not speak at news conferences at all in the future. “He would like to concentrate on his area of specialization for a while longer. … We would like to ask for a little more time.”