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SoftBank Group logs $7.2 billion full-year loss on tech woes
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Pedestrians walk outside the headquarters of SoftBank Group in Tokyo on May 11, 2023. (AFP/Richard A. Brooks)
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oftBank Group reported an annual net loss of over US$7.2 billion on Thursday after a bruising year for the tech startup sector in which it is heavily invested.
The company said its annual net loss came to 970 billion yen ($7.2 billion) on sales of 6.57 trillion yen, reflecting in part major losses from its Vision Fund portfolios.
The Vision Fund 1 and 2 (VF1, VF2) vehicles were hit by the global tech rout, SoftBank Group said in a statement.
"Share prices of numerous public portfolio companies declined for the fiscal year amid the weakness in global stock markets, although share prices of several companies rose in the fourth quarter," it said.
"The fair value of a wide range of private portfolio companies also decreased, reflecting markdowns of weaker-performing companies and share price declines among market comparable companies."
The two funds recorded a whopping 4.3 trillion yen in losses ($32 billion), SoftBank said -- a record, according to Bloomberg News.
It took hits across a range of start-up investments, from long-struggling WeWork to delivery service DoorDash.
The Japanese group has made aggressive investments in tech startups and has been exposed to fickle market forces.
"SoftBank Group's performance very much depends on share prices," Hideki Yasuda of Toyo Securities told AFP ahead of the company's announcement.
And analysts fear that more bad news may be on the cards.
"We believe that the private company portfolios... are at risk of further meaningful markdowns going forward," wrote Victor Galliano, an analyst who publishes on SmartKarma.
Vision Fund vehicles had reported losses for four straight quarters through December.
Risk evaluator Standard and Poor's gave SoftBank Group's long-term bonds a BB+ rating in February.
The company said earlier this year that it was focused on "defense", though it was convinced of investment opportunities for artificial intelligence.
