Japan’s SoftBank Group on Monday reported a record quarterly net loss of $23.4-billion after interest rate hikes tanked tech shares.
The telecom firm-turned-investment behemoth posted a net loss of 3.16 trillion yen, nosediving from a net profit of 761.5-billion yen in the same April-June period the previous year. Global stock declines and the rapid depreciation of the yen” contributed to the slump, CEO Masayoshi Son told reporters.
A company statement elaborated, blaming the “global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates”. 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.
The portfolio companies that suffered large losses for the quarter included South Korean e-commerce giant Coupang and US meal delivery platform DoorDash, SoftBank Group said.
The outspoken Son said he wanted to reflect and learn from the huge losses suffered by SoftBank’s technology-focused Vision Fund, which suffered even worse declines than the tech-rich Nasdaq.
“All sorts of things can be used as excuses, such as the bad market environment, the war and the pandemic. But if we had been a bit more selective and made proper investments, we wouldn’t have suffered so much pain,” he said.
“I don’t know how long this winter will continue,” he added, referring to the challenging global situation for business.
“It could be three months. It could be three years,” Son said, joking that his “worries are reflected on his hair”.
In May, SoftBank reported its worst-ever full-year net loss — and a then-record quarterly loss for Q4 — after a bruising 2021-22 that saw its assets hit by a US tech stocks rout and a regulatory crackdown in China.
That came after logging Japan’s biggest-ever annual net profit in 2020-21, when people moved their lives online during the pandemic and sent tech stocks soaring.
And in 2019-20, SoftBank Group reported a then-record annual net loss of 961.6 billion yen, as the emergence of Covid-19 compounded woes caused by its investment in troubled office-sharing firm WeWork.
Source: eNCA
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