SoftBank profit jumps 50% after inclusion of Saudi-backed Vision Fund

SoftBank Group Corp. CEO Masayoshi Son speaks during a SoftBank World presentation in Tokyo in this July 20, 2017 file photo. (AP)
Updated 07 August 2017
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SoftBank profit jumps 50% after inclusion of Saudi-backed Vision Fund

TOKYO: Japan’s SoftBank Group Corp. on Monday reported a 50.1 percent rise in first-quarter operating profit, after the company included the Saudi-backed Vision Fund, the world’s largest private equity fund, as a new reportable segment and booked a valuation gain.
The Internet and telecoms giant said profit for the quarter through June increased to 479.2 billion yen ($4.33 billion).
SoftBank has not released a forecast for the current business year ending in March, saying there are too many uncertain factors.
Thomson Reuters Starmine SmartEstimate puts full-year profit at 1.16 trillion yen, based on the estimates of 20 analysts.
SoftBank is a prolific investor in technology startups, with founder and chief executive officer Masayoshi Son instrumental in creating the Vision Fund.
Recent investments include US online lender Kabbage, which on Thursday said it had received a $250 million investment from SoftBank.
SoftBank also has a foothold in the US market through its wireless unit Sprint Corp., which last week reported a quarterly profit for the first time in three years as a result of cost-cutting efforts.
The fourth-biggest US wireless carrier by subscribers is exploring options to boost finances and better compete, through means such as merging with T-Mobile US Inc. as well as a tie-up with cable provider Charter Communications Inc.
SoftBank also said it would be interested in parking funds in ride-hailing firms Uber Technologies or Lyft Inc. in the future.
This is the first time Softbank has publicly indicated an interest in Uber, after having so far put funds into its rival Grab in Southeast Asia and China’s Didi Chuxing.
Last month, a media report said Uber shareholders and its board were mulling a stock sale to SoftBank and other investors.
“We are interested in discussing with Uber, we are also interested in discussing with Lyft, we have not decided which way,” said Son.
“Whether we decide to partner and invest into Uber or Lyft, I don’t know what will be the end result,” he told reporters at SoftBank’s first-quarter earnings briefing on Monday.
Vision Fund, backed by investors including Saudi Arabia’s sovereign wealth fund, Apple and Foxconn, has raised more than $93 billion.
Its backers expect technology investments that will match or beat the 44 percent internal rate of return that SoftBank says Son has delivered by investing in Internet firms in the last 18 years.
Longer term “if all goes well Vision Fund should contribute several hundred billion yen in annual revenue,” Son said.
Thomson Reuters Starmine SmartEstimate puts SoftBank’s full-year profit at 1.16 trillion yen, based on estimates from 20 analysts.
SoftBank, however, has not released a forecast for the current business year ending March, citing uncertainty.


Italy endorses China’s Belt and Road plan in first for a G7 nation

Updated 24 March 2019
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Italy endorses China’s Belt and Road plan in first for a G7 nation

ROME: Italy endorsed China’s ambitious “Belt and Road” infrastructure plan on Saturday, becoming the first major Western power to back the initiative to help revive the struggling Italian economy.
Saturday’s signing ceremony was the highlight of a three-day trip to Italy by Chinese President Xi Jinping, with the two nations boosting their ties at a time when the United States is locked in a trade war with China.
The rapprochement has angered Washington and alarmed some European Union allies, who fear it could see Beijing gain access to sensitive technologies and critical transport hubs.
Deputy Prime Minister Luigi Di Maio played down such concerns, telling reporters that although Rome remained fully committed to its Western partners, it had to put Italy first when it came to commercial ties.
“This is a very important day for us, a day when Made-in-Italy has won, Italy has won and Italian companies have won,” said Di Maio, who signed the memorandum of understanding on behalf of the Italian government in a Renaissance villa.
Taking advantage of Xi’s visit, Italian firms inked deals with Chinese counterparts worth an initial 2.5 billion euros ($2.8 billion). Di Maio said these contracts had a potential, future value of 20 billion euros.
The Belt and Road Initiative (BRI) lies at the heart of China’s foreign policy strategy and was incorporated into the ruling Communist Party constitution in 2017, reflecting Xi’s desire for his country to take a global leadership role.
The United States worries that it is designed to strengthen China’s military influence and could be used to spread technologies capable of spying on Western interests.
WARM WELCOME
Italy’s populist government, anxious to lift the economy out of its third recession in a decade, dismissed calls from Washington to shun the BRI and gave Xi the sort of red-carpet welcome normally reserved for its closest allies.
Some EU leaders also cautioned Italy this week against rushing into the arms of China, with French President Emmanuel Macron saying on Friday that relations with Beijing must not be based primarily on trade.
There was not even universal backing for the BRI agreement within Italy’s ruling coalition, with Deputy Prime Minister Matteo Salvini, who heads the far-right League, warning against the risk of China “colonialising” Italian markets.
Salvini did not meet Xi and declined to attend a state dinner held in honor of the visiting leader on Friday.
Di Maio, who leads the 5-Star Movement, says Italy is merely playing catch up, pointing to the fact that it exports significantly less to China than either Germany or France.
Italy registered a trade deficit with China of 17.6 billion euros last year and Di Maio said the aim was to eliminate the deficit as soon as possible.
After talks with Italian Prime Minister Giuseppe Conte and Di Maio in the morning, Xi flew to the Sicilian city Palermo for a private visit on Saturday afternoon.
He is due to head to Monte Carlo on Sunday before finishing his brief tour of Europe in France, where he is due to hold talks with Macron and German Chancellor Angela Merkel.