Japanese investment holding firm SoftBank Group reported a net profit of $7.7 billion (¥1.2 trillion) Tuesday for its fiscal second quarter, driven by investment gains from its Vision Fund holdings and the strengthening of the yen.
Second quarter results
The profit for the July-September quarter is against a net loss of $6 billion recorded for the same period a year ago. The net profit for the quarter is way over the expectations of $1.9 billion based on the average of four analyst estimates compiled by LSEG, according to Reuters.
The Vision Fund investment vehicle reported an investment gain of $3.9 billion in the quarter. Vision Fund 1 had an investment gain of $5.7 billion, thanks to China’s DIDI and South Korea’s Coupang, while Vision Fund 2 faced an investment loss of $1.7 billion in the quarter.
Since its inception, Vision Fund 1 has recorded a gross gain of $22.6 billion, but it has been highly offset by Vision Fund 2’s loss of $21 billion, according to a Reuters report.
SoftBank Chief Financial Officer Yoshimitsu Goto said that after the losses previously reported in the vision funds, they learnt from it and started being cautious, which led SoftBank to achieve good profits.
The investment bank also reported a foreign exchange gain of $1.8 billion.
“This was due to the yen’s appreciation in exchange rates used for translation at the second quarter-end compared with the previous fiscal year-end, amid a net excess of US dollar-denominated liabilities over US dollar-denominated cash and cash equivalents and loans receivable,” said SoftBank.
Investment in AI
In June, SoftBank CEO Masayoshi Son unveiled plans to make aggressive moves in artificial intelligence (AI) and invest heavily in AI and chip companies. He said that his company would be making a push into AI that would make earlier investments seem like a warm-up.
The founder singling out AI chips, robotics, autonomous driving and data centers as key sectors for investment. He also said that he believed his life mission was to bring about an age of artificial superintelligence where AI was 10,000 times smarter than humans.
In the past six months, SoftBank invested in Wayve Technologies, a UK company developing autonomous driving platforms based on data learning using AI, and acquired Graphcore, a UK-based designer and developer of semiconductor chips specialized for AI and machine learning, converting it to a subsidiary.
Net worth
Son has a real-time net worth of $32.3 billion as of November 12, 2024, according to Forbes’ estimates.
