Softbank reports massive £26B profit from Vision Fund

SoftBank Group Corp (TYO: 9984) said on Wednesday a series of blockbuster IPOs pushed its profit to a record high for any Japanese company. The conglomerate holding firm posted £32 billion of annual net income.

SoftBank opened at £62.38 per share in the stock market on Wednesday and is currently exchanging hands at £59.58 per share. In comparison, it had started the year at £52 per share after recovering from a low of £17.44 per share in March 2020, when the COVID-19 crisis was at its peak.

SoftBank reports £41 billion of annual investment gains

For the fiscal fourth quarter, SoftBank reported £13 billion of record profit. The Japanese multinational attributed its hawkish performance primarily to the highest-ever £26.18 billion of profit from its $100 billion Vision Fund that generated £41 billion of annual investment gains, including £17 billion from its 40% stake in Coupang Inc (South Korean eCommerce firm) that went public in March.

SoftBank also generated £6.14 billion as it sold its controlling stake in Sprint Corp (U.S. telecom company) last year. Its remaining holdings, the Minato City-based company said, also rose in value. In the previous year, SoftBank had posted £6.24 billion of loss as a few sour tech bets weighed on the value of its portfolio.

According to S&P Global Market Intelligence, the record for the highest full-year profit for a Japanese company was previously held by Toyota Motor Corp., which also published its latest quarterly results on Wednesday. SoftBank, however, topped Toyota’s record by roughly 100% to secure a spot with the tech giants like Microsoft and Alphabet, with full-year profit records in the range of $40 billion.  

SoftBank completed £16 billion of share buybacks

SoftBank completed its share repurchase programme worth £16 billion that was launched last year. On the back of investment opportunities, SoftBank raised its committed capital from £7.07 billion to £21.22 billion in the second fund.

In the upcoming months, SoftBank-backed SPAC is set to list Mapbox (location data services provider) in a deal valued at £1.41 billion. WeWork (office-sharing company) and Grab (ride-hailing firm), two of SoftBank’s biggest bets, are also expected to go public via SPAC mergers.

SoftBank Group Corp performed largely upbeat in the stock market last year with an annual gain of close to 70%. At the time of writing, it is valued at £100 billion and has a price to earnings ratio of 11.49.