SoftBank has recorded an operating loss of around US$13 billion in full-year 2019, falling by US$31.7 billion compared to its positive results last year. The result was pulled down by a US$17.7 billion loss on valuation from investments held by its Vision Fund.
The Japanese conglomerate had earlier forecasted a US$12.1 billion operating loss and a US$16.7 billion loss on its tech fund.
Photo credit: moovstock / 123RF
In an earnings release for the fiscal year ended March 31, SoftBank said the fair values of its big-ticket bets Uber and WeWork, as well as its other portfolio companies, plummeted during the fourth quarter primarily due to the Covid-19 pandemic.
As of the fiscal year-end, SoftBank had US$75 billion in investments across 88 companies that are worth US$69.6 billion. The company said it has lost almost US$10 billion from its investments in Uber and WeWork alone in the fiscal year.
For its other portfolio companies, SoftBank reported a loss of about US$7.5 billion for the full year. The bulk of this loss came from the fourth quarter, with a total loss on valuation of almost US$9 billion.
The company said that its investments in the consumer sector took the biggest hit, with values declining by US$3.3 billion in the fourth quarter. It was followed by the transportation and logistics segment (excluding Uber) and the real estate and construction sector (excluding WeWork), which declined by US$2.4 billion and US$2.2 billion, respectively.
In the earnings call, Softbank CEO Masayoshi Son warned that while some of its portfolio firms may make it to the other side of the pandemic, 15 of them might go bankrupt. He said that for those companies, “we will not provide financial support to rescue them.”
Earlier today, SoftBank announced plans to repurchase up to US$4.7 billion worth of its own stock from today to March 2021. This comes on top of the US$41 billion repurchase program it announced in March this year.
The company also revealed that Alibaba founder Jack Ma will be resigning as board director on June 25.
Update (May 20, 11:45 am): This article was updated to include Son’s remarks during SoftBank’s earnings call for full-year 2019.
Editing by Charmaine de Lazo
(And yes, we’re serious about ethics and transparency. More information here.)
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
