Japan's Softbank Group seen booking 234 billion yen quarterly profit
The figure is based on the average of four analyst estimates compiled by LSEG
JAPAN’S SoftBank Group is set to make a quarterly net profit of 234 billion yen (S$2.08 billion) on Wednesday (Feb 12) as shares in its telecommunications holdings edge up and the post-listing performance of Swiggy is seen boosting the value of its portfolio of unlisted technology startups.
Analysts are divided, however, on whether the spate of artificial intelligence-related investments SoftBank has announced in recent weeks will help or hurt the Japanese technology investment conglomerate’s bottom line.
The profit of 234 billion yen is based on the average of four analyst estimates compiled by LSEG, and compares with a gain of 950 billion yen in the same period last year. SoftBank is expected to bank further investment gains on US telecommunications subsidiary of Deutsche Telekom T-Mobile US, whose shares hit an all-time high in late November and rose 7 per cent over the quarter.
Also in November, Indian delivery firm Swiggy jumped 17 per cent on its market debut and had risen almost 20 per cent by the end of December.
This may signal a recovery in IPO markets, particularly in India, and so trigger a bump in the valuations of SoftBank’s several-hundred strong portfolio of unlisted tech firms, analysts say.
More uncertain is the future impact of the major artificial intelligence investments announced over the past two months.
SoftBank CEO Masayoshi Son’s pledge in December to invest US$100 billion in AI projects in the US over four years could entail selling or monetising portfolio assets or taking on excessive debt, Jefferies analyst Atul Goyal wrote in a note.
Alongside, last week Son announced a new joint venture with ChatGPT maker OpenAI to offer AI services in Japan for corporate customers and roll out OpenAI products across SoftBank’s portfolio companies. While some analysts say this may bring efficiency gains at portfolio companies, others say the US$3 billion annual usage fee paid to OpenAI could diminish near-term earnings. REUTERS
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