SoftBank’s telecommunications subsidiary forecasts stable operating profit
SoftBank’s telecommunications subsidiary has forecast operating profit of £6.92bn, largely unchanged from a year earlier.
The wireless carrier, SoftBank Corp, is an important source of cash for its parent company SoftBank Group Corp, which is expected to post a record annual operating loss next week.
The Japanese conglomerate has warned of further losses on its investments outside its Vision Fund, which has piled pressure on founder Masayoshi Son.
However, telco SoftBank Corp reported a 32 per cent rise in operating profit, from 88.7bn yen to 116.6bn, in the three months ended March. The telecommunications company is considered a target for SoftBank’s plans to raise billions through asset sales to bolster its balance sheet.
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Two of SoftBank’s biggest investments – Uber and WeWork – have both been hit hard by the social distancing measures sparked by the coronavirus crisis. In March, Son announced a surprise sale of $41bn of assets to slash the company’s huge debt pile.
SoftBank widened its forecast for a net losses in the year ended in March from 750bn to 900bn yen, last month.
In a statement the firm said: “The expected amount of such loss has increased compared to the previous forecasts as SoftBank expects to recognise new losses arising from the fair value measurement of the loan commitment and financial guarantee contract in favour of WeWork.”
It came just two weeks after the bank warned of a $16.7bn (£13.3bn) loss on tech startups it has invested in through its Vision Fund this year.
Shares in Tokyo-listed SoftBank Corp are up one per cent.
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