TOKYO: SoftBank Group on Tuesday reported a $12 billion quarterly net profit to June, recovering from eye-watering losses as tech stocks rally and the firm sheds assets to shore up its finances.
The results will be a relief for chief Masayoshi Son, who has faced an increasing drumbeat of criticism after recent record losses for the firm.
Son transformed what began as a telecoms company into an investment and tech behemoth with stakes in some of Silicon Valley’s hottest start-ups through its $100 billion Vision Fund.
But he has battled opposition to his strategy of pouring money into start-ups — including troubled office-sharing firm WeWork — which some analysts say are overvalued and lack clear profit models.
The 11.9 percent rise in net profit to $12 billion puts SoftBank back in the black after a turbulent financial year that saw its investment woes magnified by the coronavirus pandemic and plunges in global stock markets.
Son has insisted that his strategy is sound, and that SoftBank’s portfolio is broad enough to weather the storm, but acknowledged the challenges when the firm reported an eye-watering $8.9 billion annual net loss in May, hit by the WeWork debacle and stock crashes.
The results come after SoftBank launched an aggressive plan to sell up to $41 billion in assets to finance a stock buy-back, after Son said shares were undervalued.
The fundraising was also intended to reduce the firm’s debts and increase cash reserves.
Paired with the recent recovery in tech stock prices, the strategy appears to be paying off, analysts said.
But it warned that the pandemic continued to cause uncertainty, bolstering its investments in e-commerce and food delivery firms, but hammering those in the hotel and hospitality sectors.
It said it would not offer a forecast “due to numerous uncertainties affecting earnings.”
Son has struggled to interest investors in a second round of the Vision Fund as he deals with the woes of some of his most high-profile investments, notably WeWork.
Once hailed as a dazzling unicorn valued at $47 billion, the office-sharing start-up has suffered a stunning fall from grace.
Son stood by his investment, even upping his stake, but things began to unravel last year as WeWork haemorrhaged cash and canceled its share offering, with founder Adam Neumann pushed out.
SoftBank this year scrapped a plan to buy up to $3 billion WeWork shares as part of a restructuring program, and the start-up is now suing for alleged breach of contract.
SoftBank back to black with $12 billion profit after record losses
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SoftBank back to black with $12 billion profit after record losses
- Results come after SoftBank launched an aggressive plan to sell up to $41 billion in assets to finance a stock buy-back
Acwa signs key terms to develop 5GW of renewable energy capacity in Turkiye
JEDDAH: Saudi utility giant Acwa has signed key investment agreements with Turkiye’s Ministry of Energy and Natural Resources to develop up to 5 gigawatts of renewable energy capacity, starting with 2GW of solar power across two plants in Sivas and Taseli.
Under the investment agreement, Acwa will develop, finance, and construct, as well as commission and operate both facilities, according to a press release.
The program builds on the company’s first investment in Turkiye, the 927-megawatt Kirikkale Independent Power Plant, valued at $930 million, which offsets approximately 1.8 million tonnes of carbon dioxide annually, the statement added.
A separate power purchase agreement has been concluded with Elektrik Uretim Anonim Sirketi for the sale of electricity generated by each facility.
Turkiye aims to boost solar and wind capacity to 120GW by 2035, supported by around $80 billion in investment, while recent projects have already helped prevent 12.5 million tonnes of CO2 emissions and reduced reliance on imported natural gas.
Turkiye’s energy sector has undergone a rapid transformation in recent years, with renewable power emerging as a central pillar of its strategy.
Raad Al-Saady, vice chairman and managing director of ACWA, said: “The signing of the IA (implementation agreement) and PPA key terms marks a pivotal moment in Acwa’s partnership with Turkiye, reflecting the country’s strong potential as a clean energy leader and manufacturing powerhouse.”
He added: “Building on our long-standing presence, including the 927MW Kirikkale Power Plant commissioned in 2017, this step elevates our partnership to a new level,” Al-Saady said.
In its statement, Acwa said the 5GW renewable energy program will deliver electricity at fixed prices, enhancing predictability for grid planning and supporting long-term industrial investment.
By replacing imported fossil fuels with domestically generated clean energy, the initiative is expected to reduce Turkiye’s exposure to global energy market volatility, strengthening energy security and lowering long-term power costs.
The company added that the economic impact will extend beyond the anticipated investment of up to $5 billion in foreign direct investment, with thousands of jobs expected during the construction phase and hundreds of high-skilled roles created during operations.
The energy firm concluded that its existing progress in Turkiye reflects a strong appreciation for Turkish engineering, construction, and manufacturing capacity, adding that localization has been a strategic priority, and it has already achieved 100 percent local employment at its developments in the country.
