Softbank Group Corp. (SFTBY) , the Japan-based group which holds key stakes in tech companies around the world through its Saudi-backed Vision Fund, posted stronger-than-expected second quarter earnings Monday but cautioned that future investments may be impacted by the political fallout linked to the murder of dissident journalist Jamal Khashoggi last month.
Softbank said operating earnings for the three months ending in September, its fiscal second quarter, surged 78% to $6.23 billion thanks in part to better-than-expected sales from its Japan Mobile unit and successful stakes in start-ups such as Uber Technologies, established tech giants such as Alibaba Group Holding (BABA) and U.S. wireless carrier Sprint (S) .
"The Vision Fund is showing profits worthy of SoftBank 2.0," Softbank's founder and CEO, billionaire Masayoshi Son, told reporters in Tokyo. "Next year, I believe we will not only exceed these results, but may even deliver an operating profit on the level that Japan has never experienced before."
Softbank shares closed modestly higher in Tokyo Monday at 8,747 yen each, trimming their October loss to around 20.4%, a move that outpaces both the 9.2% slide for the Nikkei 225 benchmark and the 9.4 pullback in the S&P 500 Information Technology subindex as global tech shares retreated in the face of rising interest rates and a series of weaker-than-expected quarterly outlooks from FAANG stocks such as Apple (AAPL) , Amazon (AMZN) , Alphabet (GOOGL) and Facebook (FB) .
Breaking down some of the Group's individual investments, Son said he was confident that Sprint's planned merger with T-Mobile US (TMUS) would receive regulatory approval, and said the planned IPO of Japan Mobile, would could fetch a record market value of $25 billion, remains on track for late December.
However, Son also also noted that the Khashoggi case would have an impact on future Vision Fund investments -- which are half funded by the Kingdom -- even as he insisted that they're "important to the Saudi people in ensuring their economy diversifies and is no longer dependent on oil."
"It is true that a horrible incident happened," Son said in his first public comments since Khashoggi was presumed murdered in the Saudi embassy in Istanbul on October 2. "On the other hand, we have a responsibility towards the Saudi people, and we must carry out our responsibility rather than turn our backs on them."