SoftBank posts $251 mn net profit in Q3 as tech portfolio valuations weaken

SoftBank Group Corp reported on Tuesday that it had squeezed out a net profit of 29 billion yen ($251 million) for the quarter from October to December, as tech portfolio valuations weaken at its Vision Fund unit.

The result compared with a profit of 1.17 trillion yen in the same period a year earlier, when SoftBank booked what was at the time a record quarterly result as its portfolio rallied.

After tech unicorns plunged into the "valley of the coronavirus in the early days of the COVID-19 pandemic, SoftBank CEO Masayoshi Son rode a recovery in valuations as startups such as e-commerce firm Coupang came to market.
 

Now valuations are again under pressure as investors cast a sceptical eye over tech firms promising future profits and central banks move
towards paring pandemic stimulus.

Many portfolio companies are trading below their listing price, with office-sharing firm WeWork, ridehailer Grab and used-car platform Auto1 all falling during the quarter.

The group's exposure to China has also affected performance, as regulators take action against tech firms. Shares of e-commerce giant Alibaba, in which SoftBank has a stake, dropped a fifth in the three months to the end of December.

Such assets are used by the group for loans as it invests through its Vision Fund unit, which runs the $100 billion Vision Fund and a smaller second fund.

SoftBank said separately on Tuesday its deal to sell chip designer Arm to Nvidia had fallen through amid regulatory hurdles.

The earnings come at a watershed moment for the conglomerate as senior executives exit the firm, including Chief Operating Officer Marcelo Claure, who led the restructuring of WeWork and launched the group's Latin American-focused fund.
 

Son, who three months ago said SoftBank was in a "blizzard ", will speak at a news conference at 4:30pm local time (0730 GMT).