SoftBank Group suffered a net loss of 1,708 billion yen (nearly 13 billion francs) in its 2021/22 financial year. The Japanese giant of investments in new technologies has been a victim of the collapse of global tech on the markets.
This year, which ended at the end of March, is a new record annual loss for SoftBank, worse than the one it suffered two years ago.
His new fall is all the more dizzying as he had recorded record net profit of 4988 billion yen in 2020/21, a historic high for a Japanese company.
In its last fiscal year, SoftBank suffered monstrous investment losses (more than 3.4 trillion yen), mainly related to its Vision Fund 1 fund.
In a statement, SoftBank Group explained the rout of its main investment fund by “a decline in the value of the shares of most of its portfolio companies, caused by multiple factors” including the climate of widespread concern over the markets, regulatory tightening and investors’ aversion to tech in the face of monetary tightening.
Not only is American tech brooding over a background of high inflation in the United States pushing the Fed to raise its rates, but Chinese tech, on which SoftBank Group had bet heavily in the past (it is notably the largest shareholder of Alibaba), is weakened by Beijing’s regulatory tightening in the sector.
SoftBank Group has been ultra-exposed to market volatility since its CEO-founder Masayoshi Son reoriented its business model from 2017 towards a financial holding company specializing in investments in tech, a risky area.
‘The entire structure of SoftBank’s business is dependent on a single assumption, namely ever-growing stock values,’ Asymmetric Advisors analyst Amir Anvarzadeh recently said in a note. However, ‘this original flaw is increasingly exposed to a pessimistic market’.
The value of SoftBank Group shares has fallen 17% since the start of the year on the Tokyo Stock Exchange, and more than 57% since its high reached in March 2021.
As usual, SoftBank Group did not publish earnings forecasts for its new 2022/23 fiscal year, which started on April 1.
/ATS