By Ambar Warrick
Investing.com -- Japanese investment house Softbank Group Corp (TYO:9984) logged an unexpected net loss in the December quarter amid deeper declines in the value of its major technology holdings, with an uncertain outlook for U.S. interest rates offering little relief to the firm.
Softbank posted a net loss attributable to owners of ¥783.42 billion ($1 = ¥132.18) in the three months to December 31, compared to a profit of about ¥29B last year, the company said in a statement. The figure missed Reuters' expectations for a profit of ¥103.7B.
The firm logged a total loss on investments of ¥511.57B, much deeper than the ¥156.53B loss seen last year.
Returns from its premier venture capital Vision Funds were a loss of ¥653.21B, compared with a gain of ¥55.66B from the prior year.
The dismal results come amid a sustained decline in the technology sector through the December quarter, as uncertainty over U.S. interest rates and fears of a looming recession saw investors dumping growth stocks en masse.
The December quarter now puts Softbank back in loss-making territory, after the investment house reported a ¥3 trillion profit in the July-September quarter on the sale of its stake in Chinese internet giant Alibaba Group Holdings Ltd (NYSE:BABA). The firm had also exited its stakes in several major firms earlier this year, including ride-hailing service Uber Technologies Inc (NYSE:UBER).
But British chip designer Arm, which the firm bought in 2016, remained among the few bright spots on Softbank’s balance sheet, with the chipmaker logging a 3.7% rise in net sales in the nine months to December 31.
Softbank reiterated that the unit is still preparing for a public offering, which analysts say is crucial to improving the investment house’s financial performance. The offering is expected to be launched by late-2023.
Depreciation in the yen also helped ease some losses for Softbank, given that a bulk of its investments are offshore. But this was largely offset by overwhelming losses on most of its holdings.
Shares of the firm were trading down 1% by the close of trade on Tuesday, while the broader Nikkei 225 index ended flat.