SoftBank back to black with $12 billion profit after record losses

SoftBank back to black with $12 billion profit after record losses
The 11.9 percent rise in net profit to $12 billion puts SoftBank back in the black after a turbulent financial year that. (AFP)
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Updated 11 August 2020

SoftBank back to black with $12 billion profit after record losses

SoftBank back to black with $12 billion profit after record losses
  • Results come after SoftBank launched an aggressive plan to sell up to $41 billion in assets to finance a stock buy-back

TOKYO: SoftBank Group on Tuesday reported a $12 billion quarterly net profit to June, recovering from eye-watering losses as tech stocks rally and the firm sheds assets to shore up its finances.
The results will be a relief for chief Masayoshi Son, who has faced an increasing drumbeat of criticism after recent record losses for the firm.
Son transformed what began as a telecoms company into an investment and tech behemoth with stakes in some of Silicon Valley’s hottest start-ups through its $100 billion Vision Fund.
But he has battled opposition to his strategy of pouring money into start-ups — including troubled office-sharing firm WeWork — which some analysts say are overvalued and lack clear profit models.
The 11.9 percent rise in net profit to $12 billion puts SoftBank back in the black after a turbulent financial year that saw its investment woes magnified by the coronavirus pandemic and plunges in global stock markets.
Son has insisted that his strategy is sound, and that SoftBank’s portfolio is broad enough to weather the storm, but acknowledged the challenges when the firm reported an eye-watering $8.9 billion annual net loss in May, hit by the WeWork debacle and stock crashes.
The results come after SoftBank launched an aggressive plan to sell up to $41 billion in assets to finance a stock buy-back, after Son said shares were undervalued.
The fundraising was also intended to reduce the firm’s debts and increase cash reserves.
Paired with the recent recovery in tech stock prices, the strategy appears to be paying off, analysts said.
But it warned that the pandemic continued to cause uncertainty, bolstering its investments in e-commerce and food delivery firms, but hammering those in the hotel and hospitality sectors.
It said it would not offer a forecast “due to numerous uncertainties affecting earnings.”
Son has struggled to interest investors in a second round of the Vision Fund as he deals with the woes of some of his most high-profile investments, notably WeWork.
Once hailed as a dazzling unicorn valued at $47 billion, the office-sharing start-up has suffered a stunning fall from grace.
Son stood by his investment, even upping his stake, but things began to unravel last year as WeWork haemorrhaged cash and canceled its share offering, with founder Adam Neumann pushed out.
SoftBank this year scrapped a plan to buy up to $3 billion WeWork shares as part of a restructuring program, and the start-up is now suing for alleged breach of contract.


Saudi Arabia’s Amkest Group signs deal with US green energy firm

Amr Khashoggi, Chairman of Amkest Group and Scott Poulter, Chief Executive of Pacific Green Technologies
Updated 05 December 2020

Saudi Arabia’s Amkest Group signs deal with US green energy firm

Saudi Arabia’s Amkest Group signs deal with US green energy firm
  • Its expansion into Saudi Arabia through this joint venture is no surprise since the Kingdom is aiming for 30 percent of its energy to come from renewable sources by 2030

RIYADH: US-based Pacific Green Technologies Inc. (PGTK) has signed a joint venture agreement with Amr Khashoggi Trading Co. Ltd. (Amkest Group) to incorporate a company in Saudi Arabia for the sale of Pacific Green environmental technologies.
Amkest Group, founded in 1983, has a history of success in the Kingdom. Its diverse business portfolio includes construction material production and supply, property development and consulting services.
Commenting on the partnership, Scott Poulter, PGTK’s CEO, said: “Saudi Arabia under its Vision 2030 strategic framework, which calls for 9.5 GW of the Kingdom’s energy to be supplied through renewables by 2030, is set to undergo rapid growth.”
Poulter added: “Pacific Green’s technologies, particularly in the solar power, desalination and battery energy storage system sectors, provide the perfect solution to the Kingdom’s growing demand, and we are excited to leverage Amkest Group’s hard-earned relationships to contribute toward the goals of Vision 2030.”
Amr Khashoggi, chairman of Amkest Group, said: “We believe the combination of our experience and knowledge of the Saudi market, coupled with Pacific Green’s portfolio of technologies, provides the foundation for an incredible partnership and the opportunity to offer multiple complementary technologies.”
Pacific Green is focused on addressing the world’s need for cleaner and more sustainable energy. Its expansion into Saudi Arabia through this joint venture is no surprise since the Kingdom is aiming for 30 percent of its energy to come from renewable sources by 2030.
The deal comes on the back of an expectation that Saudi Arabia will attract more than $20 billion in investments in renewables over the next decade. This forecast was made by the CEO of Saudi National Grid in October, according to a report by S&P Global.