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Wed, Nov 21, 2001 - Page 21 News List

Softbank's profits nosedive

AP , TOKYO

Softbank President Masayoshi Son announces the group's financial results in Tokyo yesterday.

PHOTO: AFP

Japanese Internet giant Softbank Corp recorded ?54.3 billion (US$441 million) in losses for the first fiscal half largely because of crumbling losses in investments that had once formed its global empire.

The recent stock market shakeout has forced Softbank to rethink its strategy. It is taking a more cautious approach to investments especially in the US.

The earnings results for the six months ended in September marks a gradual reversal of fortune for the Tokyo-based company, praised for years here as a pioneer in the Internet as well as in venture businesses reflected in the risk-taking spirit of its US-educated president Masayoshi Son.

In the previous fiscal year, Softbank had posted a profit of ?36 billion for the first half and 37 billion yen in profit for the full year ended in March on strong earnings from its Internet financial services. Softbank didn't give an earnings forecast for the year ending in March next year.

For the first half, Softbank recorded sales of ?183 billion (US$1.5 billion), up 2 percent from ?180 billion a year ago on strong earnings from Yahoo and Softbank Commerce, an electronic commerce unit.

The company, however, took a special charge of ?71 billion (US$577 million), including about ?56 billion (US$455 million) in securities holdings-related losses.

While acknowledging uncertainties remained both in the global economies and the stock market, Softbank reaffirmed its faith in the digital industry as a viable business for the future, if not the immediate future.

It said it will continue to work on a recently started broadband Internet-access service in Japan. It will also more strictly monitor the performance of the companies it invests in. It has already withdrawn from eight companies during the first half and plans to abandon 10 more during the rest of the fiscal year, Softbank said.

Analysts say Softbank can no longer rely on its past strategy of betting heavily on Internet start-ups and using the proceeds from their initial public offerings to finance more deals.

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