Forecasts of Full-Year Financial Results
SoftBank Group Corp. (“SBG”) announced today its forecasts of financial results for the fiscal year ended March 31, 2020 (April 1, 2019 to March 31, 2020, “fiscal 2019”) as below. These forecasts are intended to provide investors with prompt information on estimates of financial results in light of the deterioration in the current market environment.
1. Results forecasts for fiscal 2019 and year-on-year differences
(Millions of yen)
| Net sales | Operating income | Income before income tax | Net income attributable to owners of the parent | |
|---|---|---|---|---|
| Fiscal 2018 results (A) (fiscal year ended March 2019) | 9,602,236 | 2,353,931 | 1,691,302 | 1,411,199 |
| Fiscal 2018 results (B) (fiscal year ended March 2019; after Sprint reclassified as discontinued operations (Note 2)) | 6,093,548 | 2,073,636 | 1,682,672 | 1,411,199 |
| Fiscal 2019 forecasts (C)(Fiscal year ended March 2020) | 6,150,000 | (1,350,000) | 250,000 | (750,000) |
| Change (C-A) | (3,452,236) | (3,703,931) | (1,441,302) | (2,161,199) |
| Change % | (36.0%) | -% | (85.2%) | -% |
| (Reference) | ||||
|---|---|---|---|---|
| Change (C-B) | 56,452 | (3,423,636) | (1,432,672) | (2,161,199) |
| Change % | 0.9% | -% | (85.1%) | -% |
2. Reasons for year-on-year differences (C-A above) in financial results
The difference in net sales is mainly due to presenting the net income and loss of the U.S. subsidiary Sprint Corporation (“Sprint”) as “net income or loss from discontinued operations,” separately from continuing operations. See (Note 2) below for details.
The difference in operating income is mainly attributable to the expected recording of investment loss of approximately JPY 1.8 trillion at SoftBank Vision Fund* for fiscal 2019, resulting from a decrease in the fair value of investments due to the deteriorating market environment.
The difference in income before income tax is, in addition to the above, mainly due to the expected recording of non-operating loss totaling approximately JPY 800 billion for fiscal 2019 on investments held outside of SoftBank Vision Fund, including The We Company (WeWork) and WorldVu Satellites Limited (OneWeb). The loss represents the sum of loss from financial instruments at FVTPL, derivative loss, provisions for doubtful accounts, and impairment loss on equity method investments. This will be partially offset by the gain relating to the settlement of variable prepaid forward contract using Alibaba shares recorded in the first quarter of fiscal 2019 and the dilution gain from changes in equity interest in Alibaba recorded in the third quarter of fiscal 2019, as well as an expected year-on-year increase in income on equity method investments related to Alibaba.
There are no changes to SBG's existing financial policies regarding LTV and cash position.
SoftBank Vision Fund L.P. and its alternative investment vehicles (including their subsidiaries)
The forecasts above are based on available information and certain presumptions deemed be reasonable as of the date of this disclosure. Actual financial results may differ from forecasts due to various factors including additional information obtained during the process of finalizing financial results and changes in estimates.
Regarding the merger of Sprint and T-Mobile US, Inc. (“T-Mobile”) in an all-stock transaction (the “Transaction”), as of March 31, 2020, SBG determined that the closing of the Transaction is highly probable. Based on this determination, in SBG’s consolidated statement of income for fiscal 2019, Sprint’s net income and loss will be presented as “net income or loss from discontinued operations,” separately from continuing operations. Sprint’s net income and loss for the previous fiscal year will also be retrospectively revised and presented as “net income or loss from discontinued operations.” In SBG’s consolidated statement of financial position, assets and liabilities of Sprint are expected to be presented as assets and liabilities held for sale. Based on this planned change, the (C-B) in the above table provides comparison between results forecasts for fiscal 2019 and financial results for the previous fiscal year after reflecting the reclassification of Sprint as discontinued operations. As announced in “Completion of Merger of Sprint and T-Mobile” dated April 2, 2020, Sprint and T-Mobile completed the Transaction on April 1, 2020 (ET).
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