SoftBank Group third-quarter operating profit falls 99%, pulled down by Vision Fund

TOKYO (Reuters) – Japan’s SoftBank Group Corp said on Wednesday its third-quarter operating profit fell 99%, well short of analyst estimates, pulled down by losses at the $100 billion Vision Fund.

The Vision Fund posted an operating loss of 225 billion yen ($2.05 billion) in the quarter compared to 176 billion yen profit in the same period a year earlier.

Profit for the overall group reached 2.6 billion yen for October-December versus 438 billion yen a year prior, the technology investor said in a stock exchange filing.

The result compared with the 345 billion yen average of three analyst estimates compiled by Refinitiv.

The Vision Fund said it had invested $74.6 billion in 88 companies as at the end of December, and that those investments were worth $79.8 billion by year-end.

The results come as SoftBank founder and Chief Executive Masayoshi Son works to attract outside capital for a successor to the Vision Fund, which has Saudi Arabia and Abu Dhabi as its anchor investors.

Son’s investing credentials took a hit in the August-September quarter when the fund was whiplashed by weakness at major bets such as office space-sharing firm WeWork and recorded an $8.9 billion operating loss.

Since then a slew of portfolio companies – from hotel-booking platform Oyo to cloud robotics firm CloudMinds – have cut jobs and come under pressure to demonstrate the long-term viability of their business models.

The fund itself has also been losing key employees.

On Wednesday, SoftBank’s shares surged to their highest price in seven months, buoyed by news that a U.S. federal judge had rejected an antitrust challenge to the proposed takeover of subsidiary Sprint Corp by T-Mobile US Inc.

Nevertheless, SoftBank faces pressure to enhance shareholder value after sources told Reuters last week that U.S. activist hedge fund Elliott Management had amassed a stake of almost $3 billion in the tech conglomerate and is pushing for change including $20 billion in stock buybacks.

Son will speak at a news conference from 0700 GMT.