SoftBank Group’s third quarter net profit plunged to 29 billion yen (US$251.4 million), down 97% from the previous year, as tech valuations across the globe remain subdued.
The company’s tech-focused Vision Fund reported a 92% decline in its gains on investments, clocking in at US$111.5 billion yen (US$966.3 million). Valuations of some of SoftBank’s biggest bets have suffered recently as investors weigh the impacts of China’s regulatory crackdown.
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With hurdles surrounding regulations still present, SoftBank has also halted its sale of semiconductor firm Arm to US chipmaker Nvidia Corp., a deal that was valued at up to US$80 billion. The Japanese conglomerate will instead look to take Arm public as it named a new CEO for the latter.
According to SoftBank, it would recognize a breakup fee of roughly US$1.2 billion, which Nvidia had deposited as part of the deal, as profit in the fourth quarter.
The Japanese firm’s results come amid a broad decline in the valuations of tech stocks globally as concerns grow over high inflation and the prospect of tightening monetary policy.
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Shares of Grab, WeWork, and Auto1 – which are portfolio companies of SoftBank – have weakened in Q3.
In the second quarter last year, SoftBank marked its first quarterly loss since Q4 of 2020, when it clocked in a record loss of nearly US$9 billion for the full year amid pandemic-induced write-downs on its investments.
Editing by Deepti Sri and Jaclyn Tiu
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