SoftBank seen returning to profitability as listed holdings rise
(Adds detail of SoftBank's IPO pipeline)
By Sam Nussey
TOKYO, Aug 7 (Reuters) - SoftBank Group Corp is
seen returning to profitability in the first quarter on Tuesday
as the value of its listed holdings rise, three months after
faltering tech bets via its Vision Fund pushed the group to a
record annual loss.
The Japanese conglomerate will likely record operating
profit of 171 billion yen ($1.62 billion) for April-June, showed
the average of three analyst estimates compiled by Refinitiv.
That would represent a 75% drop from the last time it made a
quarterly profit, in April-June last year.
The performance of the $100 billion Vision Fund's public
assets is likely to return SoftBank to profit, said analyst Kirk
Boodry at Redex Research.
Positive news include insurance startup Lemonade Inc's
successful July listing. Food delivery service DoorDash
has also filed for a listing, testing the market's appetite for
Analysts grapple with uncertainty over how the Vision Fund
values its portfolio. The fund recorded a 1.9 trillion yen
operating shortfall in the year ended March as Chief Executive
Masayoshi Son's bets on startups such as shared office space
firm WeWork went awry.
GRAPHIC: SoftBank and the Vision Fund https://tmsnrt.rs/39YQo2j
Son has pivoted as plans faltered, jettisoning satellite
operator OneWeb and launching a share buy-back funded by asset
sales to support SoftBank's share price.
The group has sold down stakes in e-commerce firm Alibaba
Group Holding Ltd and wireless carriers SoftBank Corp
and T-Mobile US Inc.
It is also looking at selling chip designer Arm, media
reported, in a possible break from a firm Son praised as closely
aligned with his vision but that has turned money losing under
SoftBank has struggled to attract capital for a second
mega-fund given poor performance of the first and so has been
investing its own money.
"With the amount of assets that have been sold, the next
logical step is to move forward on Vision Fund 2," Boodry said.
The value of SoftBank's assets has returned to
pre-coronavirus levels, Son said in June, referring to his
preferred measure of success.
($1 = 105.5300 yen)
(Reporting by Sam Nussey; Editing by Christopher Cushing)
First Published: 2020-08-07 01:00:00
Updated 2020-08-07 03:38:21
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