SoftBank clocks smaller annual loss as Arm unit logs record sales

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SoftBank’s net loss attributable to shareholders was ¥970.14 billion ($1 = ¥134.21) in the year to March 31, 2023, compared to a loss of ¥1.708 trillion in the prior year.

The smaller loss comes as the firm saw some improvement in the value of its publicly held equity over the past quarter, especially as bets on a pause in the Federal Reserve’s rate hike cycle and strong earnings spurred some gains in technology stocks.

SoftBank’s chip designing unit Arm Ltd saw net sales rise 5.7% to a record high of ¥381.75B, on strong growth in royalty revenues. Arm is among the few bright spots in SoftBank’s holdings, with the unit’s proposed public listing presenting a potential capital injection for the Japanese firm. 

SoftBank’s flagship Vision Fund segment logged an investment loss of ¥5.322T, compared to a net loss on investments of ¥3.625T last year. The firm logged a small gain on exiting its stake in eight portfolio companies, mainly ride-hailing service Uber Technologies Inc (NYSE:UBER). 

This saw the carrying amount of investments in its Vision Fund fall by ¥4.419T to ¥10.489T at the end of the year. 

Depreciation in the Japanese yen offered some relief to SoftBank’s earnings, given that most of its major holdings are offshore. The Japanese currency fell sharply in recent weeks as the Bank of Japan signaled that it will maintain its ultra-loose monetary policy in the near-term. 

The firm has been offloading more of its stake in Chinese e-commerce giant Alibaba Group Holdings Ltd (NYSE:BABA) to offset losses in its other investments. SoftBank saw an annual gain related to the settlement of prepaid forward contracts using Alibaba shares of ¥4.838T. 

But sales of its stakes in Alibaba saw SoftBank’s overall holdings in the firm fall below 20% over the year.