SoftBank Group posts 421.8 billion yen net profit in first quarter

[TOKYO] Japanese technology investor SoftBank Group logged a net profit of 421.8 billion yen (S$3.7 billion) for the April-to-June quarter.

The result compared with a net loss of 174.3 billion yen for the same period a year earlier and the 127.6 billion yen average profit from three analyst estimates compiled by LSEG.

The Vision Fund investment unit posted an investment gain of 726.8 billion yen.

The results mark SoftBank’s second consecutive quarter of profit and follow its first annual profit in four years when it was helped by a strong performance by its telecom holdings and higher valuations for its later-stage startups.

The results will be welcomed by investors as SoftBank has embarked on its biggest spending spree since the launch of its Vision Funds in 2017 and 2019, this time making mammoth investments in artificial intelligence companies.

Investors and analysts are awaiting updates on how these investments will be financed, the timeline for returns to materialise and whether assets will be sold to fund the new projects.

SoftBank is leading a US$40 billion funding round for ChatGPT maker OpenAI. SoftBank has until the end of the year to fund its US$22.5 billion portion, although the remainder has been subscribed, according to a source familiar with the matter.

It is also leading the financing for the Stargate project – a US$500 billion scheme to develop data centres in the US, part of its effort to position itself as the “organiser of the industry,” founder Masayoshi Son said in June.

SoftBank has yet to release details on what kinds of returns its financing of the Stargate project could generate. The extent of third-party investment will determine what other financing tools, such as bank loans and debt issuance, it may have to deploy.

In July, SoftBank raised US$4.8 billion by selling off a portion of its holding in T-Mobile. REUTERS