SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

Aided by the soaring valuations of its tech investments, SoftBank’s operating profit for the year jumped 80.5 percent to 2.4 trillion yen. Above, a Softbank advertisement in Tokyo. (AP Photo)
Updated 09 May 2019

SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

  • The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets
  • The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms

DUBAI: Japanese conglomerate SoftBank Group Corp. announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit.
The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets such as Uber Technologies heading to trading markets, in what investors and industry experts see as a test of SoftBank’s strategy.
The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week.
A second Vision Fund will be announced soon, SoftBank Group founder and CEO Masayoshi Son said at a news conference on Thursday, adding it would be similar in size to the first fund with SoftBank likely to be the only investor initially.
The value of Vision Fund’s investments in 69 companies had risen to $72.3 billion by end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO, SoftBank said on Thursday.
The fund’s stake in Uber, which debuts on Friday, grew 418 billion yen in value, while its share in OYO added 154 billion yen in value. Overall, the fair value rose for 29 firms and fell for 12 over the period, SoftBank said, with the rest unchanged.The value of its stake in Guardant Health, a Vision Fund portfolio company listed last year, grew 203 billion yen.
Aided by the soaring valuations of its tech investments, SoftBank Group’s operating profit for the year ended March jumped 80.5 percent to 2.4 trillion yen ($22 billion).
That was above a 2.1 trillion yen SmartEstimate that gives a greater weighting to top-rated analysts, Refinitiv data shows.
The tech and telecoms group said its common stock will be split at a two-for-one ratio on June 27, while its dividend will remain unchanged at 44 yen per share.
SoftBank’s transition away from telecoms toward tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp. in December in what is Japan’s largest-ever initial public offering.
That provided the funds for a share buyback that has helped drive up SoftBank Group’s stock by nearly 60 percent this year. The shares closed up 0.7 percent ahead of the earnings.


IMF warns of Asia’s darkening growth outlook as trade war bites

Updated 18 October 2019

IMF warns of Asia’s darkening growth outlook as trade war bites

  • The IMF cut its economic growth forecast for the Asia-Pacific region to 5.0 percent for this year and 5.1 percent for 2020
  • It also slashed China’s growth forecast to 6.1 percent for this year and 5.8 percent for 2020
WASHINGTON: Asian nations face heightening risks to their economic outlooks as the US-China trade war and slumping Chinese demand hurt the world’s fastest-growing region, the International Monetary Fund said on Friday.
In its World Economic Outlook report on Tuesday, the IMF cut its economic growth forecast for the Asia-Pacific region to 5.0 percent for this year and 5.1 percent for 2020 — the slowest pace of expansion since the global financial crisis more than a decade ago.
“Headwinds from global policy uncertainty and growth deceleration in major trading partners are taking a toll on manufacturing, investment, trade, and growth,” Changyong Rhee, director of the IMF’s Asia and Pacific department, said during a news conference at the IMF and World Bank fall meetings.
“Risks are skewed to the downside,” he said, calling on policymakers in the region to focus on near-term fiscal and monetary policy steps to spur growth.
“The intensification in trade tensions between the US and China could further weigh on confidence and financial markets, thereby weakening trade, investment and growth,” he said.
A faster-than-expected slowdown in China’s economic growth could also generate negative spillovers in the region, as many Asian countries have supply chains closely tied to China, he added.
The IMF slashed China’s growth forecast to 6.1 percent for this year and 5.8 percent for 2020, pointing to the impact from the trade conflict and tighter regulation to address excess debt.