SoftBank posts 39% drop in quarterly revenue despite gains from Vision Fund

SoftBank Group reported a sharp drop in its quarterly net profit as it took a US$6.3 billion hit on nine of its investments, mainly due to a decline in the value of South Korean ecommerce group Coupang.

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The Japanese investment conglomerate, best known for its US$100 billion Vision Fund, posted a quarterly net profit of US$6.9 billion in the April to June quarter, down 39% from the same period a year ago. This comes after its record-setting US$45.8 billion profit in the March quarter.

However, the value of some of those investments sank during the latest quarter due to regulatory pressures on portfolio companies in China, including Didi Chuxing, which listed its shares in New York at the end of June. Online education startup Zuoyebang has also dipped after China implemented tough restrictions on the home-tutoring sector.

While the crackdown has affected returns expectations, “our broader thesis in China is unchanged: it’s still a large, growing, and compelling economic opportunity,” said Navneet Govil, chief financial officer of Vision Fund.

SoftBank’s Vision Fund unit posted a first-quarter profit of US$2.1 billion.

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The US$40 billion Vision Fund 2 has also ramped up investments during the three months. It has deployed US$14.2 billion in 47 groups, pushing its total investment portfolio to 161 companies.

Meanwhile, the listings of companies including Didi and Chinese commercial freight firm Full Truck Alliance led to unrealized quarterly gains of US$5.8 billion for Vision Fund.