FILE PHOTO: A woman using a mobile phone walks past the logo of SoftBank Corp in Tokyo, Japan December 18, 2014. REUTERS/Toru Hanai
TOKYO (Reuters) – Japanese telco SoftBank Corp (9434.T) on Monday forecast operating profit for the current financial year at 920 billion yen ($8.6 billion), largely unchanged from a year earlier.
Japan’s third-largest wireless carrier is a vital source of cash for highly leveraged parent SoftBank Group Corp (9984.T), which is set to post a record annual operating loss next week as Chief Executive Masayoshi Son’s tech investments curdle.
SoftBank Corp reported a 32% rise in operating profit in the three months ended March to 116.6 billion yen, compared with 88.7 billion yen a year earlier.
The result undershot the 127 billion yen average of four analyst estimates in a Refinitiv poll.
The telco is seen as a target for SoftBank Group’s plan to raise up to $41 billion through asset sales to shore up its balance sheet, although analysts expect the parent to retain a controlling stake. It has already pledged part of its stake as collateral for loans.
SoftBank Corp launched next-generation 5G services at the end of March but the industry faces new competition from e-commerce firm Rakuten Inc (4755.T), which has launched aggressively low-priced plans in an attempt to take share from the three incumbents.
Reporting by Sam Nussey; Editing by Christopher Cushing