Earnings Results for Q2 FY2022
Earnings Results for Q2 FY2022 ― November 11, 2022
Highlights (9 minutes)
The Company recorded a total profit of ¥5,371.6 billion as a result of the early physical settlement*1 (the “Early Physical Settlement”) of prepaid forward contracts corresponding to 242 million American Depository Receipts (ADRs) of Alibaba shares from August to September 2022. During the course of the Early Physical Settlement, the Company’s voting ownership in Alibaba fell below 20%, and Alibaba was therefore excluded from the associates of the Company.
|Amount||Account in the condensed interim consolidated statement of profit or loss|
|Gain on settlement of prepaid forward contracts using Alibaba shares pertaining to the Early Physical Settlement||¥584.8 billion||Gain on investments at Investment Business of Holding Companies|
|Gain from remeasurement of Alibaba shares held upon exclusion from associates||¥3,996.7 billion|
|Derivative gain on prepaid forward contracts that are the subject of the Early Physical Settlement||¥790.1 billion||Derivative gain (excluding gain (loss) on investments)|
|Total (contribution to income before income tax)||¥5,371.6 billion|
Apart from the above, the Company recorded an unrealized valuation loss of ¥1,077.1 billion on Alibaba shares that continued to be held, following a decrease in the share price that occurred after Alibaba’s exclusion from the associates of the Company.
Gross performance since inception was a $13.5 billion gain in SVF1 and a $14.6 billion loss in SVF2.*2
3. Highlights of results
|Loss of ¥849.6 billion on investments|
|Income before income tax of ¥292.6 billion (decrease of ¥754.3 billion yoy)|
reflecting the recordings of:
|Net loss attributable to owners of the parent of ¥129.1 billion (deterioration of ¥492.7 billion yoy)|
reflecting the recordings of:
4. Maintained prudent defensive financial management - with continued monetization of, and contraction in investments. These resulted in a large improvement in LTV.*4
|Continued monetization of investments|
|Contraction in investments|
|Integration of international investment functions to improve operational efficiency|
In October 2022, the Company decided to integrate the operations of SBIA and SoftBank Group International,*6 which are collectively responsible for the Company’s global investment activities, to improve the operational efficiency of international investment functions.
5. Reduced interest-bearing debt by ¥2,849.7 billion at SBG, its subsidiaries engaged in fund procurement, etc., from the previous fiscal year-end (excluding a decrease associated with foreign bond repurchases conducted in October), as a result of proactive debt repayment and the Early Physical Settlement.
6. Continued share repurchase
Certain contracts that became due for settlement during the implementation period were also settled.
Gross amounts before deductions such as third-party interests and taxes.
Public portfolio companies are shares traded on stock exchanges or over-the-counter markets. Private portfolio companies are those that do not fall under the category of public portfolio companies. The same applies hereinafter.
The ratio of liabilities to holding assets, which is calculated as adjusted net interest-bearing debt divided by equity value of holdings.
Equity value of holdings and adjusted net interest-bearing debt each exclude amounts to be settled at maturity or borrowings that are part of asset-backed finance. The calculation of adjusted net interest-bearing debt excludes interest-bearing debt and cash and cash equivalents, etc., attributable to entities managed on a self-financing basis, such as SoftBank Corp. (including its subsidiaries such as Z Holdings Corporation), SVF1, SVF2, LatAm Funds, Arm, and PayPay Corporation, as well as SB Northstar.
Includes share exchanges. During the second quarter, SVF1 sold its stake in Grofers International Pte. Ltd. to Zomato Limited in exchange for shares in Zomato Limited as consideration, and LatAm Funds exchanged its shares in Yaydoo, Inc. for shares in PayStand Inc. These share exchanges are treated as full exits (entire sale) from investments and acquisition of new investments, with the sale price and acquisition cost being recorded in gross, respectively, and with the difference between the acquisition cost of shares initially held and sale price (acquisition cost of the exchanged shares) being recorded as realized gain and loss on investments.
Refers collectively to several entities, including SoftBank Group Capital Limited and SB Group US, Inc.
Refer to “Consolidated Financial Report for the six-month period ended September 30, 2022” to find more details and definition of each company name and abbreviation.
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