Japan-based SoftBank reported a sharp drop in net profit for its fiscal Q2 ending 30 September as its telecoms operations in Japan and the US continued to face headwinds, while its Vision Fund saw strong gains.

The company’s net profit attributable to owners of the parent in the quarter dropped to JPY97.1 billion ($851 million) from JPY511.4 billion in fiscal Q2 2016. The decline was, in part, due to lower equity gains on its shares in Alibaba as well as lower forex gains compared with a year ago.

Operating income for the July to September quarter increased 21 per cent year-on-year to JPY396 billion. Excluding JPY81 billion in income from its $98 billion Vision Fund, operating income would have been down 4 per cent.

Despite lower turnover in the quarter from its telecoms operations in Japan, total revenue increased 3.7 per cent year-on-year to JPY2.23 trillion.

Domestic telecom sales fell 2.5 per cent to JPY773 billion, and total ARPU declined 5 per cent to JPR4,340. The operator added about 500,000 subscribers over the past year to take its total to 32.8 million at end-September.

Revenue at US subsidiary Sprint rose 4 per cent to JPY883 billion during fiscal Q2, but in US dollar terms dropped $320 million year-over-year to $7.9 billion, as wireless service revenue slid $368 million to $5.6 billion. Net loss for the period fell from $142 million in the 2016 period to $42 million in the recent quarter.

Yahoo Japan posted a 4.7 per cent increase in revenue in the quarter to JPY214 billion, while the company’s chip unit ARM saw net sales rise to JPY46.6 billion from JPY14.4 billion in Q2 2016. The gain was due mostly to the 2016 results reflecting only the period from 6 September to 30 September, while 2017 results covered the full three-month period.

Boosting Sprint stake
Over the weekend Sprint announced discussions with T-Mobile about a potential merger had ended without an agreement being reached.

Following the announcement, SoftBank said it will increase its stake in Sprint to not more than 85 per cent “subject to market conditions”. It currently holds an 82 per cent stake.

Masayoshi Son, chairman and CEO of SoftBank and chairman of Sprint (pictured), said: “Sprint is a critical part of our plan to ensure that we can deliver our vision to American consumers and we are very confident in its future.”

In a statement announcing the end of talks, Sprint president and CEO Marcelo Claure said the companies had recognised the “benefits of scale” the deal would have brought, but said Sprint is capable of going it alone: “We know we have significant assets, including our rich spectrum holdings”.

Claure thanked Son for the renewed commitment in a tweet.

SoftBank is reportedly weighing a move for cable provider Charter as the Japan-based company assesses options outside of a T-Mobile deal for Sprint.