Softbank companies start earnings reports with rise in profits

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) – Japanese IT services firm SB Technology Corp booked a 41% rise in quarterly profit on Tuesday, marking the season’s first earnings report of dozens of SoftBank Group Corp units watched for hints about the parent’s financial health.

The firm, 48% owned by SoftBank Corp, reported operating profit for the three months through September of 794 million yen ($7.29 million) versus 563 million yen in the same period a year prior. It attributed the rise to a shift from providing IT consulting for local governments to cloud services.

The company maintained its full-year profit forecast at 3 billion yen.

SB Technology’s share price has risen almost 8% year-to-date. In Tuesday trade, it ended down 0.8% whereas the benchmark Nikkei index closed up 0.5%.

SoftBank founder Masayoshi Son spends much of his time managing the group’s $100 billion Vision Fund while other businesses, such as Japanese telecoms network operator SoftBank Corp, are run day to day by trusted managers.

The entrepreneur has struggled to garner funds for a second major technology fund following the aborted public offering of office-rental firm WeWork. SoftBank has pledged $38 billion to Vision Fund 2, but recent investment setbacks and a shortage of available cash have cast doubt on that commitment.

WeWork’s parent, The We Company, withdrew the planned listing after ousting its chief executive officer, Adam Neumann. That decision put pressure on WeWork to find alternative funding, with analysts predicting that the company will need several billion dollars over the next few years.

($1 = 108.9700 yen)

(Reporting by Tim Kelly; Editing by Christopher Cushing)

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