SoftBank's profit nearly quadruples on fund investments
TOKYO (AP) - Japanese technology company SoftBank Group Corp. reported Wednesday its fiscal first quarter profit nearly quadrupled to 1.122 trillion yen ($10.6 billion) as its fund investments boosted income.
Tokyo-based SoftBank's April-June profit the previous year had totaled 313.7 billion yen. Quarterly sales climbed nearly 3% to 2.226 trillion yen ($21 billion).
The SoftBank Vision Fund has invested in dozens of companies including American entrepreneurships such as work messaging service Slack, ride-hailing Uber, office-sharing company WeWork and delivery business Doordash.
Dragging on earnings was U.S. mobile operator Sprint. But SoftBank said Sprint will merge with T-Mobile and will no longer be its subsidiary. The U.S. Department of Justice approved the merger with conditions last month.
"It is still not in the final stages of a deal, and there may still be problems, but it was a big step forward," SoftBank Chief Executive Masayoshi Son told reporters.
SoftBank also has stakes in Arm of Britain and Chinese e-commerce giant Alibaba Group, and its subsidiary owns Yahoo Japan. It has developed the talking companion robot Pepper, was the first to offer the iPhone in Japan and is a leader in the solar energy business.
The company has recently announced a second $108 billion investment fund called Vision Fund 2, with SoftBank earmarking nearly 4 trillion yen ($38 billion).
Other investors have signed on, including Apple, FoxConn Technology Group, Microsoft Corp. and Japanese banks and other companies. Son said the total investment may grow because talks were ongoing with other investors.
The first Vision Fund, now totaling $97 billion, came under scrutiny after the killing of Saudi journalist Jamal Khashoggi. Much of the funding for that investment entity came from Saudi Arabia.
SoftBank promised to diversify its funding sources. Vision Fund 2 does not include any Saudi money.
Son said the investment focus was on what are called "unicorns," which are defined as technology startups with at least $1 billion market value. But he has decided to target innovators in artificial intelligence.
"We invest in one thing - AI," he said.
Recently, SoftBank and Southeast Asian ride-hailing app Grab said they were investing $2 billion in Indonesia over the next five years.
SoftBank does not give earnings forecasts.
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