Tokyo (AFP) - Japan's SoftBank Group on Tuesday reported a surprise $5.9 billion net loss in the third quarter, as a slump in the tech sector continued to hit the investment behemoth's bottom line.
The loss compared with the net profit of 29 billion yen ($219 million) the firm reported in the same three-month period last year.
Its two Vision Fund investment vehicles alone lost 660 billion yen ($5 billion) in October-December, "reflecting declines in the share prices of a wide range of portfolio companies", SoftBank said.
The firm has made huge bets to find and grow hot new tech ventures around the world, but that has left its earnings vulnerable to fickle market forces, and its Vision Funds have reported losses for four straight quarters.
Interest rate hikes by the US Federal Reserve and other central banks to tackle inflation have weighed on global tech shares, putting pressure on SoftBank.
"In the past year or so, the environment has been very tough," chief financial officer Yoshimitsu Goto told reporters."We cannot be optimistic yet."
Results have lurched between dizzying highs and lows in recent years, with China's crackdown on its tech sector taking a toll on the company.
Second-quarter earnings were boosted by the sale of some shares in Alibaba as SoftBank reduced its stake to around 15 percent from 24 percent.
But it reported a record quarterly net loss for the first quarter, as tech shares tanked on interest rate hikes, a trend analysts said was likely to continue.
"Weakness in global equity markets remains the main risk to the SoftBank story," said Kirk Boodry, an analyst at Redex Research who publishes on SmartKarma.
CEO Masayoshi Son has regularly defended his strategy of making major bets on high-tech firms and start-ups, insisting that the approach will lead to a handful of significant wins that outweigh losses.
But his tactics have come under increasing scrutiny given the firm's successive losses, and Son will no longer deliver the company's results presentation.
'Very tough'
Son's unusual presentation style, complete with images of unicorns riding over troughs, have been a staple of SoftBank's quarterly results.
On Tuesday, the main speaker was Goto, who said SoftBank was in "solid defence mode" with "a very ample cash position".
"We can change to offence mode any time...we don't have to rush," he said, stressing the importance of stability.
Analysts said there was good reason to be cautious.
"The overall investment environment is very tough including on US shares," Hideki Yasuda, an analyst at Toyo Securities, told AFP before the results.
But he and other observers think SoftBank could start to see the benefits of an improving situation in China, with Boodry noting that Beijing's crackdown on tech firms and its anti-Covid policies "appear to be levelling out".
SoftBank plans to take its chip-design powerhouse Arm Holdings public in 2023, but no decision has been made on where it will be listed, the UK-based company's vice president of investor relations Ian Thornton said Tuesday.
"We are looking at all available markets...we are indeed considering Nasdaq, NYSE, and London," Thornton said.
"Arm's IPO preparations are well advanced.Markets appear to be improving, and hopefully will continue to do so.Arm itself remains fully committed to this thing in calendar (year) 2023."
