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TOKYO (Reuters) - 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, as it continues to generate cash amid the coronavirus-induced economic downturn.
Japan's third-largest wireless carrier is a vital source of funds 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’s expectation of lacklustre profit growth reflects how demand driven by the shift to teleworking to slow the spread of the virus is being offset by a drop in traffic by mobile customers in the retail network.
SoftBank Corp reported a 32% rise in operating profit in the three months ended March to 116.6 billion yen, undershooting 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.
The telco's shares closed up 1% ahead of the earnings in line with the benchmark index .N225. Its shares are flat year-to-date.
Reporting by Sam Nussey; Editing by Christopher Cushing
