Earnings Results for Q3 FY2023
Earnings Results for Q3 FY2023 ― February 8, 2024
SoftBank Group Corp. announced on February 8, 2024 its earnings results for the third quarter of the fiscal year ending March 31, 2024.
Webcast
Full-length (1:22:28)
7-minute highlight video is also available.
[Short Video] SoftBank Group Earnings : Q3 FY2023 by Yoshimitsu Goto, Board Director, Corporate Officer, Senior Vice President, CFO & CISO
Earnings Highlights (Nine-month period ended December 31, 2023)
1. Listing of Arm on the Nasdaq Global Select Market
- Arm was listed on the Nasdaq Global Select Market on September 14, 2023. In the IPO, a wholly owned subsidiary of the Company disposed of 102,500,000 American depositary shares (“ADSs”), representing 10% of Arm’s outstanding ordinary shares,*1 and received proceeds of $5.12 billion.
- No gain on the disposal is recorded in the consolidated statement of profit or loss as Arm continues to be a subsidiary of the Company after the disposal. However, in the consolidated statement of financial position, ¥674.4 billion ($4.65 billion), which represents the gain on disposal, was recorded as capital surplus.
2. Acquisition of T-Mobile 48.8 million shares for no additional consideration upon satisfaction of contingent consideration condition
The Company acquired 48.8 million shares of T-Mobile stock equivalent to $7.74 billion (¥1.1 trillion) for no additional consideration on December 28, 2023, following the satisfaction of the contingent consideration condition on December 22, 2023. This was part of the consideration the Company received for the merger between T-Mobile US and the Company’s then-U.S. subsidiary Sprint, which closed on April 1, 2020.
3. Results highlights
¥538.9 billion investment loss (¥1,361.2 billion loss for the same period of the previous fiscal year)
- ¥583.4 billion investment loss at Investment Business of Holding Companies
- Derivative gain of ¥225.4 billion on investments, while realized and unrealized valuation losses on Alibaba shares totaled ¥943.0 billion
Note: The ¥943.0 billion realized and unrealized valuation losses on Alibaba shares were offset by a derivative gain of ¥1,204.7 billion, which arose from prepaid forward contracts using Alibaba shares and is recorded separately as “derivative gain (excluding gain or loss on investments).”
- ¥52.0 billion investment loss at SoftBank Vision Funds (excluding gains associated with SVF’s investments in the Company’s subsidiaries)
Note: The SoftBank Vision Funds segment recorded ¥781.9 billion gain on investments. This included gains associated with SVF’s investments in Arm and other subsidiaries of the Company.
- An investment gain of ¥531.3 billion was recorded for the third quarter, driven by higher share prices of public portfolio companies*2 and an increase in the fair value of ByteDance due to its strong performance. However, the period nevertheless saw an investment loss of ¥52.0 billion, primarily resulting from markdowns of weaker-performing private portfolio companies.*2
¥264.1 billion gain before income tax (improvement of ¥554.1 billion YoY)
reflecting the recordings of:
- Finance cost of ¥426.8 billion
- Foreign exchange loss of ¥308.2 billion due to the impact of the weaker yen. This was a result of net excess of U.S. dollar-denominated liabilities (net) mainly at SBG over its U.S. dollar-denominated cash and cash equivalents and loans receivable
- Derivative gain (excluding gain or loss on investments) of ¥1,180.3 billion, arising from a gain relating to prepaid forward contracts using Alibaba shares following a fall in Alibaba’s share price, which offset the previously mentioned realized and unrealized valuation losses on these shares
¥458.7 billion net loss attributable to owners of the parent (improvement of ¥453.8 billion YoY)
reflecting the recordings of:
- Income tax of ¥383.8 billion
- Net income attributable to non-controlling interests of ¥339.0 billion
4. Balancing defense and offense
LTV*3 remained nearly unchanged from the previous fiscal year-end as a result of ongoing monetization initiatives
- Raised $4.39 billion through prepaid forward contracts using Alibaba shares
- Received proceeds of $5.12 billion through the disposal of 10% of Arm’s outstanding shares in its IPO
- Received proceeds totaling $3.93 billion from sales of investments by SVF*4
Expanded investments
- $1.45 billion for acquisition of investments by SVF*4
- ¥309.2 billion primarily for strategic investments by SBG and its wholly owned subsidiaries*5
5. SVF
Gross performance since inception was $16.7 billion in gain for SVF1 and $19.0 billion in loss for SVF2.*6
6. Completed replacement of USD-denominated NC6 undated hybrid notes
In April 2023, the Company issued domestic hybrid bonds totaling ¥222.0 billion. This was followed by a hybrid loan*7 of ¥53.1 billion incepted in May 2023. With these funds, the Company completed the replacement of USD-denominated NC6 undated hybrid notes ($2.0 billion), which had their first voluntary call date in July 2023. Additionally, in September 2023, the Company replaced domestic hybrid bonds (¥15.4 billion), coinciding with their first voluntary call date in the same month.
7. Completion of the intragroup reorganization involving Z Holdings and its core wholly owned subsidiaries, primarily LINE and Yahoo Japan
As of October 1, 2023, Z Holdings successfully completed the scheduled intragroup reorganization procedures, including a merger primarily among the company and its core wholly owned subsidiaries, LINE and Yahoo Japan, and changed its trade name to LY Corporation. The revised organizational structure, with a further emphasis on products, is expected to accelerate synergy expansion through business integration.
The calculation is based on the 1,025,234,000 company shares issued and outstanding on September 30, 2023.
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.
- Loan-to-Value (LTV) refers to the ratio of liabilities to holding assets, calculated by dividing the adjusted net interest-bearing debt by the equity value of holdings. Both the equity value of holdings and adjusted net interest-bearing debt exclude amounts to be settled at maturity or borrowings associated with asset-backed finance. In computing the adjusted net interest-bearing debt, the calculation omits 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 LY Corporation and PayPay Corporation), SVF1, SVF2, LatAm Funds, and Arm. In addition, interest-bearing debt and cash and cash equivalents, etc. attributable to SB Northstar are excluded, with the exception of certain portions of interest-bearing debt, cash and cash equivalents, and bond investments.
The amounts recorded in the condensed interim consolidated statement of cash flows
The amount comprises the investment outlay by SBG and its primary wholly owned subsidiaries (excluding investments in U.S. Treasury Bonds), as accounted for under “Acquisition of investments” in the condensed interim consolidated statements of cash flows, combined with the amount paid to third-party shareholders in connection with the subsidiary acquisitions of Berkshire Grey, Inc. in July 2023 and Balyo SA in October 2023, net of cash and cash equivalents held by these companies.
Gross amounts before deductions, such as third-party interests and taxes
The hybrid loan is eligible for 50% equity treatment for the drawn down amount by Japan Credit Rating Agency, Ltd. and S&P Global Ratings Japan Inc.
Refer to “ Consolidated Financial Report for the nine-month period ended December 31, 2023” to find more details and definition of each company name and abbreviation.
Materials＆News
| Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|
| FY2023 | Aug. 8, 2023 | Nov. 9, 2023 | Feb. 8, 2024 | − |
| Webcast | Video | Video | Video | − |
| CFO Reflections | Video | Video | Video | − |
| Highlights | Video | Video | Video | − |
| Presentation |
|
|
| − |
| Quarterly Results |
|
|
| − |
| Data Sheet |
|
|
| − |
|
|
| − | |
| FY2022 | Aug. 8, 2022 | Nov. 11, 2022 | Feb. 7, 2023 | May 11, 2023 |
| Webcast | Video | Video | Video | Video |
| CEO/CFO Reflections | Video | − | − | Video |
| Highlights | Video | Video | Video | Video |
| Presentation |
|
|
|
|
| Quarterly Results |
|
|
|
|
| Data Sheet |
|
|
|
|
|
|
|
|
Go to Events and Presentations to find archived videos and other materials including for Earnings Investor Briefings.
The latest Net Asset Value per Share is available here.
Official social media account
Disclaimer
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.
Statements in the webcasts that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements.
Forward-looking Statements are subject to various risks and uncertainties, including, without limitation, general economic conditions, general market conditions, customer demand for products and services, increased competition, inherent risks in international operations and other important factors, which may cause actual results to differ materially from those expressed or implied in any Forward-looking Statement.
The presentation and comments contained in the webcasts (including the posts from the official social media accounts) regarding companies other than SBG and other companies within the SoftBank Group is quoted from public sources and others, and we have neither verified nor are we responsible for the accuracy of information.
SBG expressly disclaims any obligation or responsibility to update revise or supplement any Forward-looking Statement in any presentation material or generally to any extent. Use of or reliance on the information in the webcasts is at your own risk.
Video and audio difficulties may result depending on the communication and network environment.
Communication charges at the viewer's expense may be required to view SoftBank Group Corp.'s webcast, live streaming or video on demand.
A Wi-Fi environment is recommended for comfortable viewing on smartphones or tablets.
A notification will appear on this page if for some reason the live streaming cannot be provided.
