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Earnings Results for FY2022

Earnings Results for FY2022 ― May 11, 2023

SoftBank Group Corp. announced on May 11, 2023 its earnings results for the fiscal year ended March 31, 2023.

Consolidated Financial Report for the fiscal year ended March 31, 2023(1.97MB/99 pages)

Webcast

Full-length (1:29:52)

5-minute highlight video is also available.

[Short Video] SoftBank Group Earnings : FY2022 by Yoshimitsu Goto, Board Director, Corporate Officer, Senior Vice President, CFO & CISO

Earnings Highlights

1．Alibaba

The Company recorded gains and losses as a result of the physical settlement of prepaid forward contracts corresponding to 296 million American Depositary Receipts (ADRs) of Alibaba shares (c and e in the following table). During the course of the physical settlement, the Company’s voting ownership in Alibaba fell below 20% in the second quarter and Alibaba was therefore excluded from the associates of the Company. Remeasurement gain was recorded on the shares that continued to be held upon exclusion (d in the following table).

Gains and losses related to Alibaba shares in the fiscal year

Gains and losses while an associate of the Company
a. Loss on equity method investments¥(25.4) billion
b. Dilution gain from changes in equity interest (net)¥75.7 billion
c. Gain on settlement of prepaid forward contracts using Alibaba shares (gain on sale from physical settlement)¥841.6 billion
Gains and losses upon exclusion from associates of the Company
d. Gain from remeasurement of Alibaba shares held upon exclusion from associates¥3,996.7 billion
Gains and losses after exclusion from associates of the Company
e. Realized loss on investments (loss on sale from physical settlement)
representing the difference between fair value at exclusion from associates and at settlement		¥(210.9) billion
f. Unrealized loss on valuation of investments
representing a change in the fair value of Alibaba shares that continued to be held at the fiscal year-end after exclusion from associates		¥(254.4) billion
Gains and losses associated with financing activities
g. Finance cost¥(107.9) billion
h. Derivative gain (excluding gain (loss) on investments)¥24.9 billion
Total (contribution to income before income tax)¥4,340.3 billion
2. SVF

Gross performance since inception was an $11.4 billion gain in SVF1 and an $18.3 billion loss in SVF2.*1

3. Results highlights
¥835.1 billion investment loss (¥526.1 billion gain for the fourth quarter)
  1. ¥4,560.5 billion investment gain at Investment Business of Holding Companies (including a ¥860.9 billion gain for the fourth quarter), which included
  • Gain of ¥4,838.3 billion relating to settlement of prepaid forward contracts using Alibaba shares (total of c and d in the above table)
  • Realized loss of ¥238.0 billion and unrealized valuation loss of ¥142.4 billion
  1. ¥5,322.3 billion investment loss at SoftBank Vision Funds (including a ¥315.5 billion loss for the fourth quarter), which included
  • Realized gain (net) of ¥81.7 billion and unrealized valuation loss (net) of ¥1,952.0 billion at SVF1
  • Realized loss (net) of ¥3.5 billion and unrealized valuation loss (net) of ¥2,527.5 billion at SVF2

Share prices of numerous public portfolio companies*2 declined for the fiscal year amid the weakness in global stock markets, although share prices of several companies rose in the fourth quarter. The fair value of a wide range of private portfolio companies*2 also decreased, reflecting markdowns of weaker-performing companies and share price declines among market comparable companies.
Loss before income tax of ¥469.1 billion (improvement of ¥400.4 billion yoy)

reflecting the recordings of:

  1. Finance cost of ¥555.9 billion
  2. Foreign exchange loss of ¥772.3 billion due to the impact of the weaker yen amid an excess of U.S. dollardenominated liabilities (net) mainly at SBG over its U.S. dollar-denominated cash and cash equivalents and loans receivable
  3. Decrease in third-party interests at SVF of ¥1,127.9 billion
Net loss attributable to owners of the parent of ¥970.1 billion (improvement of ¥737.9 billion yoy)

reflecting the recordings of:

  1. Income tax of ¥320.7 billion
  2. Net income attributable to non-controlling interests of ¥180.3 billion
4. Maintained prudent defensive financial management with continued monetization of and contraction in investments, resulting in an improvement in LTV (Loan-to-Value)*3 from the previous fiscal year-end.
Continued monetization of investments
  1. Raised $35.46 billion through prepaid forward contracts using Alibaba shares during the fiscal year.
  2. SVF1 and SVF2 sold investments (including those through share exchanges) for a total of $6.47 billion in the fiscal year, including full exits of ten portfolio companies, such as Uber and KE Holdings, and partial exits of several public portfolio companies.
  3. Sold 21.2 million T-Mobile shares for $2.40 billion in the first quarter.
  4. Raised $4.10 billion through prepaid forward contracts using Alibaba shares, subsequent to the fiscal year-end.
Contraction in investments

SVF1 and SVF2 made new and follow-on investments (including those through share exchanges) totaling $3.14 billion in the fiscal year, a significant reduction from $44.26 billion in the previous fiscal year.

5. Reduced interest-bearing debt of SBG and its subsidiaries engaged in fund procurement, etc. by ¥2,233.8 billion from the previous fiscal year-end as a result of proactive debt repayment and the physical settlement of prepaid forward contracts
  1. Reduced financial liabilities relating to the sale of shares through prepaid forward contracts by $40.45 billion (including $13.47 billion relating to contracts concluded during the fiscal year) due to the physical settlement of prepaid forward contracts corresponding to 296 million ADRs of Alibaba shares in the fiscal year.
  2. Repaid borrowings of $4.5 billion made through commitment lines in the first quarter.
  3. Repaid the entire ¥325.2 billion of bank loans (senior loans) in the second quarter, including early repayment of ¥292.7 billion.
  4. Repaid in full $6.0 billion in a margin loan borrowed through Alibaba shares in the second quarter.
  5. Repaid $2.06 billion in a margin loan borrowed through T-Mobile shares in the six-month period ended September 30, 2022.
  6. Repurchased a total of $2.07 billion worth of foreign currency-denominated senior notes (at face value) and $0.75 billion worth of USD-denominated Undated Hybrid Notes (at face value) in the fiscal year. The latter is classified as equity instruments in accordance with IFRSs.
6. On track with replacement of USD-denominated Undated Hybrid Notes

Subsequent to the fiscal year-end, the Company issued domestic Hybrid Notes of ¥222.0 billion in April 2023. Together with the borrowings made through the Hybrid Loan*4 in May 2023, the Company completed the financing for the replacement of the USD-denominated Undated Hybrid Notes ($2.0 billion) and JPYdenominated Hybrid Notes (¥15.4 billion) with the first voluntary call dates in July 2023 and in September 2023 respectively.

7. Share repurchase of ¥1.4 trillion completed
  1. On October 17, 2022, SBG completed the full repurchase of shares under the ¥1 trillion share repurchase program authorized in November 2021.
  2. On November 10, 2022, SBG completed the full repurchase of shares under the ¥400 billion share repurchase program authorized in August 2022.
  3. SBG retired 252,958,500 treasury shares (14.68% of the total number of shares issued prior to the retirement) on March 30, 2023, a number equal to the total number of shares acquired under the above two programs.
8. Reorganization is planned among Z Holdings and primarily LINE and Yahoo Japan

Z Holdings plans to reorganize its corporate group as of October 1, 2023, primarily among itself and its core wholly owned subsidiaries, LINE and Yahoo Japan, to build an organization structure that puts more emphasis on products, to accelerate the expansion of synergies from the business integration.

9. Confidential submission of draft registration statement on Form F-1 by Arm

Subsequent to the fiscal year-end, Arm announced in April 2023 that it has confidentially submitted a draft registration statement on Form F-1 to the U.S. Securities and Exchange Commission relating to the proposed initial public offering of American depositary shares representing Arm’s ordinary shares. The Company intends that Arm will continue to be a consolidated subsidiary following the completion of the proposed initial public offering. The Company does not expect that any such offering would have a material effect on its consolidated results or financial position.

  1. Gross amounts before deductions such as third-party interests and taxes.

  2. 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.

  3. 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 and PayPay Corporation), SVF1, SVF2, LatAm Funds, and Arm, as well as SB Northstar.

  4. The Hybrid Loan is eligible for 50% equity treatment for the drawn down amount from Japan Credit Rating Agency, Ltd. and S&P Global Ratings Japan Inc.

Materials＆News

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FY2022Aug. 8, 2022Nov. 11, 2022Feb. 7, 2023May 11, 2023
Webcast
CEO/CFO Reflections − −
Highlights
Presentation


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Quarterly Results


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Data Sheet


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FY2021Aug. 10, 2021Nov. 8, 2021Feb. 8, 2022May 12, 2022
Webcast
CEO Reflections − −
Highlights
Presentation


  • (24.1MB/71 pages)


  • (2.66MB/118 pages)


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Quarterly Results


  • (1.97MB/95 pages)


  • (2.66MB/118 pages)


  • (2.24MB/116 pages)


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Data Sheet


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The presentation and comments (including the posts from the official social media accounts) is made based on information available at the time it was made.
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