TOKYO Japan's SoftBank Group returned to profit for the first time in five quarters on Thursday, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies, sparking hope it was emerging from a period of retrenchment.

Net profit totalled ¥985.5 billion (US$6.6 billion or RM31.6 billion) in the three months to December, versus a ¥744.7 billion loss in the same period a year earlier.

SoftBank shares jumped 11% on Thursday to their highest level since September 2021, helped by an upbeat revenue forecast provided by chip design unit Arm overnight.

Founded by chief executive Masayoshi Son, SoftBank and its Vision Fund investment arm have gone through a period of slashing investment activity and selling off assets. Stakes in high-growth startups were particularly hit under the higher interest rate environment that followed the coronavirus pandemic.

While SoftBank's results are often volatile, Thursday's numbers could give investors some relief. SoftBank's closely watched Vision Fund arm booked an investment profit of ¥600.73 billion.

"There have been higher valuations in recent funding rounds for Vision Fund companies. It looks like the environment for tech startups is taking a positive turn," said Rolf Bulk, an analyst at New Street Research.

SoftBank has ramped up new investment activity, including ¥309 billion together with wholly owned subsidiaries, as well as US$1.45 billion in new Vision Fund investment.

The Vision Fund unit was helped by higher valuation of such firms as ride hailing company Didi Global, TikTok owner ByteDance and robotics firm AutoStore Holdings, while its investment in office-share company WeWork was written down to zero in the quarter.

SoftBank also netted US$1.825 billion in gains on the T-Mobile US shares it received last year after conditions in its 2020 deal to sell US mobile carrier Sprint to T-Mobile were met. The gains reflect an accounting time lag in assessing the fair value of the shares.

Son is known for having made canny bets on emerging technology such as on mobile internet and today's big names such as e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.

However, some of his more recent wagers have turned sour, most notably WeWork that was once privately valued at US$47 billion but filed for bankruptcy in November. 

  - Reuters