SoftBank reports annual losses of $ 13 billion affected by Tech-Share crash

The comment came after SoftBank reported a net loss of ¥ 1.71 trillion, equivalent to $ 13.2 billion, for the fiscal year ended March 31. It was its biggest loss of the year, surpassing the record set two years ago, and came in nearly ¥ 5 trillion in net income in the previous fiscal year.

Mr Son said that this financial year the company is making new investments at a slower pace. He predicted that the total for the year would be only a quarter or half of the previous year’s level, when SoftBank made about $ 46 billion in investments through its Vision Fund and Latin American funds.

The company’s results tend to fluctuate significantly as they monitor the volatile stock movement of technologies in which SoftBank has invested, including U.S. companies such as Uber Technologies Inc.

and DoorDash Inc.

Rising interest rates from the Federal Reserve and other central banks, as well as tighter government regulations in the technology industry have affected the valuation of high-tech technology stocks. Former stars in SoftBank’s portfolio, such as Chinese amusement leader Didi Global Inc.

were tainted.

Mr Son said he would choose his targets with stricter prudence and would be cautious to invest in Chinese companies.

“As the 475 companies we have invested in are gradually approaching the harvest season, we can survive,” Mr Son said. “We may not be able to plant new seeds in the next year or two, but I expect the stock market to start recovering in a year or two.”

Among the many signs of trouble clogging SoftBank’s 117-page earnings report was a $ 26.2 billion investment loss in the first three months of this year in fixed assets. These are Vision Fund 1, which has completed investments, Vision Fund 2, which is still making new investments, and Latin American funds.

Publicly listed stocks, which make up most of the first Vision Fund, have more than doubled since the beginning of the year. Didi has fallen more than 80% since its debut on the New York Stock Exchange last summer, followed by clashes with Chinese regulators that forced Didi to plan to opt out of the NYSE.

Shares of SoftBank fell 8% on Thursday in Tokyo trading, which ended before the announcement of results. Thursday’s close at ¥ 4491 was less than twice less than a year ago.

Another headache for Mr. Son is the hand-spinning operation called SB Northstar, which was launched in 2020 to invest in major public technology stocks. SoftBank said Thursday that Northstar has lost a total of nearly $ 6 billion since its inception, and Mr Son said the fund had largely ceased operations.

The CEO has contributed part of Northstar’s capital and will personally receive more than $ 2 billion, SoftBank said.

The fate of SoftBank is no longer so closely linked to Alibaba Group Holding Ltd.

a Chinese internet and e-commerce company.

Back in September 2020, Alibaba SoftBank’s share accounted for more than half of its total asset value. As of March 31, almost a quarter of SoftBank’s stake in Alibaba was just 22% of net asset value. This makes SoftBank harder to use the stake as a piggy bank for other investments.

Mr Son said he would focus on designing Arm-owned Arm chips as a way to make money without spending more money. He said he expects demand for chips to continue to grow. He also confirmed that Arm’s operation in China had returned to normal after a dispute with the former CEO, who at one point left the operation in China without the corporate seal needed to run the business.

In February, SoftBank said it plans to make a public offering of Arm shares by March 2023 following a deal to sell the Nvidia block. Corp.

collapsed. Mr Son said the offer could be postponed for three to six months if the market situation deteriorates.

“We put on an umbrella when it rains,” Mr. Son said. “We have to think flexibly, depending on the situation. But now is the time to strengthen our defense. “

Write Megumi Fudikawa at megumi.fujikawa@wsj.com