SoftBank achieved a net profit of 4.61 billion pounds sterling in the second quarter of the financial year.
The conglomerate holding company reports annualized earnings growth of 4.5%.
The Japanese company estimates its net profit from investments at £10 billion.
SoftBank (TYO: 9984) announced on Monday that it made a net profit in the second quarter of the fiscal year due to profits attributed to the Vision Fund business, including the investment in Beike (Chinese real estate broker).
The company’s shares opened on Monday on the stock market with a gain of approximately 3% and rose by a further 1.5% in the next hour. Including the price action, SoftBank Group Corp. is now trading at £52 per share compared to £33.55 per share at the beginning of the year. The share price had fallen to as low as 19.73 pounds per share in March. Trading shares online is easier than you think. Learn how to buy shares online in 2020.
SoftBank exceeds analysts’ estimates for net profit in Q2
In the quarter ended September 30, the investment company reported a net profit of 4.61 billion pounds sterling. This compares to a net loss of £5.14 billion in the same quarter last year. In contrast, the visible alpha survey of analysts had forecast a much lower net profit of £1.40 billion for the final quarter.
The profit attributed to the Vision Fund division of the conglomerate holding company was £5.76 billion in the second quarter compared to a loss of £4.50 billion in the previous year. SoftBank also said on Monday that its investment in Beike resulted in unrealised gains of £3.86 billion.
In terms of revenue, the Japanese company saw year-on-year growth of 4.5% to £9.9 billion in the second quarter. Last week’s report said SoftBank and KDDI, two of Japan’s largest mobile operators, plan to invest £29 billion in the nationwide 5G network over the next ten years.
SoftBank estimates its net profit from the investment at £10 billion.
SoftBank has resorted to outsourcing assets in recent months to buy back shares and repay debts. In the first half of the financial year, the company reportedly sold or monetised assets worth £41 billion. In September, Nvidia announced plans to buy Arm from SoftBank for £31 billion.
Of the two funds, SoftBank valued its net profit from investments in the six months ended in September at £10 billion. It now values its first fund at approximately £58.17 billion and its second smaller fund at £5.79 billion.
SoftBank has performed quite well in the stock market last year with an annual profit of more than 25%. At the time of writing, the company, which is headquartered in Minato City, has a market capitalization of 110 billion pounds sterling.