The investment company Softbank Group booked a profit of the equivalent of 38 billion euros for the past financial year. That is the highest profit any Japanese company can make.
VA year ago, the Japanese investment company Softbank Group came under severe criticism. The company of the Japanese-Korean self-made man Masayoshi Son seemed to have done a lot wrong with its investments in the American driving service Uber and the office rental company Wework and posted a loss of 961.6 billion yen (8.3 billion euros).
The investment company has now decided to report back. For the fiscal year ended in March, the Softbank Group reported a surplus of 4.99 trillion yen (37.8 billion euros) on Wednesday. That is the highest profit that a Japanese company has ever made. The front runner so far has been automobile giant Toyota Motor, which made a profit of 2.5 trillion yen in 2018.
Softbank benefited from a sustained surge in technology stocks last year that paved the way for some exceptionally successful IPOs by Internet companies in Softbank’s portfolio. The IPO of the Korean Internet department store Coupang brought Softbank a valuation gain of 2.6 trillion yen (19.7 billion euros), the IPO of the American food supplier Doordash 661 billion yen.
In February, the German Internet used car marketplace Auto1 Group also went public, bringing Softbank a valuation gain of around 190 billion yen (1.4 billion euros). The valuation gains more than offset valuation losses at SB Northstar, which has been investing money the size of technology companies that have already been traded on the stock exchange since last year.
Son admits mistakes
Softbank does not have to part with its holdings in order to post profits. The majority of the calculated profit is therefore unrealized book profits that fluctuate with the movement of the share price. Last year, Softbank’s two large investment funds, Vision Funds 1 and Vision Funds 2, parted with eleven companies that generated realized profits of around 424 billion yen (3.2 billion euros).
Son, who usually marks his press conferences with big slogans, was statesmanlike and humble on Wednesday. The courses went up and down, he lectured to journalists in a black turtleneck and black jacket. “I’m not easily overjoyed or depressed, I just stay calm,” said Son. He admitted mistakes with young companies like Wework or Greensill, but argued again that the successful companies in the portfolio more than made up for failures. With a systematic investment strategy, he wanted to prove that last year’s success was not a one-off stroke of luck, stressed Son.
The entrepreneur, who once started selling software programs, has shaken up the technology investor scene in recent years with the $ 100 billion Softbank Vision Funds 1, which is largely fed by Saudi Arabia. With last year’s poor results, Softbank tried in vain to find investors for a second investment fund. Softbank invested around 30 billion dollars in Vision Funds 2 alone.
Son said he currently has no plans to open this fund to outside investors. Last year, under the impression of the corona pandemic, Softbank had wholly or partially cashed in investments such as the Chinese Internet department store Alibaba, the American telephone service provider Sprint or the British computer chip manufacturer ARM. Softbank currently has enough of its own funds for its investments, said Son.
On Wednesday, the company completed a share buyback program totaling $ 23 billion. Son announced no successor program. The Softbank Group’s share price has fallen around 14 percent since its mid-March high.