Against a backdrop of global decline in tech, Soft Bank signs a catastrophic start to the year

Against a backdrop of global decline in tech, Soft Bank signs a catastrophic start to the year



[Article publié le lundi 8.8.2022 à 12:51 mis à jour avec cours de Bourse à 15:18]

The clouds continue to gather over SoftBank Group, the Japanese colossus of investments in new technologies, which suffered a record net loss in the first quarter of its financial year 2022/2023, against the backdrop of a global decline in technology stocks.

The group, which had already suffered a record annual net loss for its 2021/22 financial year ended March 31, announced for the April-June period a negative net result of 3,162.7 billion yen (approximately -23 billion euros). .), against a net profit of 761.5 billion yen (+5.53 billion euros approx.) over the same period one year earlier.

For the record, what a difference with the whole of thefiscal year 2020/2021, during which the tech champion had earned an annual net profit of 4.988 billion yen (37.8 billion euros), almost double Toyota’s record, established at 2.500 billion yen over the 2017-2018 fiscal year, unheard of for a Japanese company.

Jagged results,

But itThis record also contrasted with a net loss of 962 billion yen (8.3 billion euros) that the group had recorded in 2019/20, testifying to results that are jagged, which bear the imprint of rebounds or plunges in markets and technology stocks.

SoftBank has been plagued by market volatility since its CEO-founder Masayoshi Son reoriented its business model in 2017 towards a financial holding company specializing in tech investments.

This first quarter of 2022/23 for SoftBank was thus marked by significant investment losses (more than 2.8 trillion yen, or 20 billion euros), mainly related to its Vision Fund 1 and 2 funds.

In its press release, the Japanese giant explains that these losses are “a reflection of the global downward trend in equities due to growing concerns about the economic recession caused by inflation and rising interest rates”.

Investor Warren Buffett loses $44 billion in second quarter

Hundreds of unlisted companies whose value is difficult to estimate

Last May, Mr. Son judged that economic conditions encouraged “to be on the defensive” in terms of investments, ensuring that his group was now “more selective”.

Alas, the group cited some of its investments as the source of its biggest losses, including the South Korean e-commerce giant Coupangthe Chinese artificial intelligence company SenseTime and the American company specializing in meal delivery DoorDash.

SoftBank’s troubles also come from the hundreds of unlisted companies in which it owns shares, the value of which, more difficult to estimate, is often known during fundraising.

Klarna (deferred payment) fell 85% over one year on the stock market

The Swedish unicorn Klarna, a specialist in deferred payment in which SoftBank invested heavily in 2021, thus saw its valuation fall by 85% over one year last month in the context of the global economic deterioration.

As usual, SoftBank Group did not release a full-year earnings forecast for 2022/23, “difficult to predict due to many uncertainties affecting the results”.

The value of SoftBank Group shares on the Tokyo Stock Exchange has risen 4% since the start of the year, but remains down 46% since its high reached in March 2021.

On the Tokyo Stock Exchange, the action of Softbank Group Corp, after rising and then falling, stabilized at the close at 5.695 yen, in an increase in the end of only 42 points, i.e. a very small increase of +0.74%.

(with AFP)