SoftBank Vision Fund incurred a 3.5 trillion yen loss in the last fiscal year

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Photo: SoftBank

Softbank has mentioned It posted a net loss of 1.7 trillion yen for the year ending in March, sharply dropping the 4.99 trillion yen profit recorded in the previous year and exceeding ¥ 1.36 trillion net loss two years ago.

The Japanese giant’s problems were primarily driven by its Vision Fund’s 3.5 trillion yen loss, the fund’s biggest loss since its inception in 2017.

View box result list blatant contradiction to earnings of 4.03 trillion yen announced for the year ending March 2021. This strong performance came largely on the back of gains from recently listed Coupang and DoorDash, which provided unrealized valuation gains of $25.3 billion and $7.6 billion, respectively.

This year instead presented an unrealized valuation loss totaling 3.63 trillion yen for all listed SoftBank portfolio companies, including losses of 1.65 trillion yen registered with Coupang and 911 billion yen for DiDi.

In addition, SoftBank’s investment in the equity method related to Alibaba was 388 billion yen, down 185 billion yen year on year. The company claimed in its report that this was mainly due to lower investment gains in Alibaba’s investments classified as financial assets. This decline is attributed to increased investment for growth initiatives, increased spending on user improvements, and increased support for e-commerce merchants.

Presenting full-year results, SoftBank CEO Masayoshi Son said that the fund should be put in a “defense mode”, and that the goal should be “to raise a lot of money on hand.”

“No one knows what will happen tomorrow, in this type of market, so we have to prepare for the worst,” Son said.

Sun claimed that higher interest rates were putting pressure on the market and was partly responsible for the loss as technology stocks continued to slide.

In addition, the company noted that there are growing fears of a global economic slowdown with rising energy prices as part of the fallout from economic sanctions against Russia after its invasion of Ukraine, along with the onset of tightening in the United States to curb inflation, and supply chain disruptions continuing – particularly in China. – Because of COVID-19.

Despite the gloom and gloom, the CEO was adamant that the long-term future of the Vision Fund remains bright.

“I’m a big believer in technology development – so this is probably the best time to buy,” Sun added.

Meanwhile, SoftBank posted a valuation gain of 864 billion yen for unlisted portfolio companies. The company claimed that for the entire fiscal year, the net valuation gain was recorded due to “an overall increase in fair value for those with funding rounds, those expected to be included, and those whose performance is progressing faster than expected.”

One of those few bright lights in the SoftBank portfolio was chip designer Arm. Total revenue for 2021 saw a 35% increase to $2.7 billion with strong growth in both equity and non-franchisement revenue. The chip designer also saw EBITDA rise 68% year-over-year to $1 billion.

in february, Intended integration Nvidia and Arm were announced dead in the water, with CEO Rene Haas claiming that Arm was “well positioned for future growth”.

at statment Released Thursday, Haas declared that the chip designer’s findings are evidence that “the demand for Arm technology and the strength of the Arm ecosystem has never been greater,” and announced that 29.2 billion chips created on the Arm IP were shipped in fiscal year 21. , including nearly 8 billion in the fourth quarter.

distance Termination of the agreement With Nvidia, the $1.25 billion deposit received by SoftBank at the time of signing in September 2021 was non-refundable. As a result, ¥110 billion, which is equivalent to a 75% stake in SoftBank-owned Arm, was recognized as profit in the fourth quarter.

In September last year, SoftBank announced that it would do so Allocate an additional $3 billion To invest in technology companies in the Latin American market. The new fund was named SoftBank Latin America Fund II, and was intended to build on the initial SoftBank Latin America Fund, which was then earmarked $5 billion.

According to the company, SoftBank Latin American funds made investments totaling $4.3 billion in the fiscal year, including 65 new investments and held 101 investments through the end of fiscal 2021. For this segment of the business, the total unrealized gains from valuation of investments 119 billion

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