SoftBank Group reports record losses as Ma quits board

TOKYO (AFP) - Struggling Japanese conglomerate SoftBank Group on Monday reported record losses, as the coronavirus pandemic compounded woes caused by its investment in troubled office-sharing start-up WeWork.

The losses were announced shortly after the firm said Chinese tycoon and Alibaba co-founder Jack Ma would resign as a director of the board next month.

The telecoms and investment giant had already sounded the alarm, warning last month that the "deteriorating market environment" would hit its bottom line.

But the results were slightly worse than it had forecast, with net losses for the year that ended in March coming in at 961.6 billion yen ($8.9 billion), rather than the estimated $8.4 billion.

Operating losses for the year were 1.36 trillion yen, having forecast 1.35 trillion last month.

The conglomerate headed by flamboyant chief Masayoshi Son said it had been "adversely affected" by the global health crisis.

And it warned that "if the pandemic continues, the company expects that uncertainty in its investment businesses will remain over the next fiscal year".

Its investment funds, including the key Vision Fund, recorded operating losses of 1.9 trillion yen, and the company said it was working with firms in the Vision Fund portfolio to prepare them for a "further deterioration in business conditions".

The results are the latest blow to Son, who has transformed what began as a telecoms company into an investment and tech behemoth with stakes in some of Silicon Valley’s hottest start-ups through its $100-billion Vision Fund.

He has faced increasing criticism over his determination to pour money into start-ups that some analysts say are overvalued and lack clear profit models.

His biggest headache has come from WeWork, once hailed as a dazzling unicorn valued at $47 billion.

Son stood by his investment, even upping his stake, despite mounting questions about WeWork’s strategy.