SoftBank Group Corporation unveiled a 1.9 billion yen ($12.9 million) profit from its Vision Fund tech investment division in the company’s fiscal first quarter ending in June, marking a return to profitability. The gain was supported by advancements in some of SoftBank’s Chinese portfolio companies, such as ByteDance, the owner of TikTok, which helped counterbalance losses from other entities like AutoStore and Symbotic.
Despite this positive development, the Vision Fund division recorded a loss of 204.3 billion yen, after being profitable in the same period the previous year. The comprehensive segment figures include various factors beyond investments, such as operational expenses, as well as gains and losses attributable to external investors.
Additionally, SoftBank declared a plan to repurchase up to 6.8% of outstanding company shares, totaling up to 500 billion yen ($3.4 billion). In the previous year’s equivalent quarter, SoftBank reported a gain of 159.77 billion yen from its Vision Fund, whereas it faced a loss of 57.53 billion yen in the flagship tech investment arm in the March quarter.
The Japanese corporation registered its first annual profit since 2021 at the Vision Fund in the fiscal year concluding in March, benefiting from a surge in technology stocks and gains within key holdings. The recent success of the Vision Fund can also be attributed to the prosperous initial public offering of chip manufacturer Arm last year, of which SoftBank controls roughly 90% of the shares.
SoftBank’s founder Masayoshi Son, renowned for his prominence, has re-emerged this year to articulate his vision of artificial intelligence, anticipating a scenario where AI could be 10,000 times more intelligent than humans within a decade.
Alibaba enhancement
In the June quarter, SoftBank Group’s net sales escalated by 9.3% year-over-year to 1.7 trillion yen, surpassing analyst forecasts. Net profit stood at 10.5 billion yen after a loss of 316.2 billion yen reported in the same quarter a year earlier. The company’s performance was aided by a 235.7 billion yen gain on Alibaba shares and a 179.1 billion yen gain on T-Mobile shares.
SoftBank expanded into one of Japan’s significant companies following Son’s early investment in Chinese e-commerce giant Alibaba in 2000, which subsequently flourished over the subsequent years. Nevertheless, SoftBank has been reducing its ownership in Alibaba to finance investments in AI endeavors.
[Source: CNBC]
