Saturday, October 1, 2022

Japan’s SoftBank reports Q1 net loss of $23.4 bn

test

TOKYO: Japan’s SoftBank Group on Monday reported a huge net loss of $23.4 billion in the first quarter, after central bank interest rate hikes worldwide caused tech shares to tank.

The telecoms firm that has turned into an investment behemoth posted a net loss of 3.16 trillion yen, nose-diving from a net profit of 761.5 billion yen in the same April-June period the previous year.

A weaker yen and the “global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates” contributed to the slump, it said.

Among its portfolio companies that suffered large losses for the quarter were South Korean e-commerce giant Coupang and US meal delivery platform DoorDash, SoftBank added.

SoftBank’s big stakes in global tech giants and volatile new ventures have made for unpredictable earnings, and it has lurched between record highs and lows in recent years.

In May, it reported its worst ever annual net loss after a bruising year in 2021-22 that saw its assets hit by a US tech share rout and a regulatory crackdown in China.

That came after logging Japan’s biggest ever annual net profit in 2020-21, after people moved their lives online during the pandemic, sending tech stocks soaring.

And in 2019-20, SoftBank Group reported a then-record net loss of 961.6 billion yen, as the emergence of Covid-19 compounded woes caused by its investment in troubled office-sharing start-up WeWork.

Hideki Yasuda, senior analyst at Toyo Securities, told AFP the company “cannot help” big losses, “because the market is down”.

The company “faces a very tough situation in the immediate term”, Yasuda said before the earnings announcement.

“They have to wait for the market to rebound. You have to look at the company through the lens of long-term investment. It may experience one or two bad years, but over a decade or more, the world economy will keep growing and it could grow further.”

Comments

Latest Posts

LATEST NEWS

Comments