SoftBank slides to quarterly loss on WeWork collapse

Softbank Group posted a multi-billion pound loss on Thursday, after the Japanese conglomerate was hit by the collapse of WeWork.

The firm reported a ¥931.1bn (£5.03bn) net loss for the three months to September end, after recording ¥234.4bn of losses in the first half related to its exposure to the US workspace specialist.

SoftBank made Y3trn profit a year previously, when it sold down its stake in Chinese e-commerce giant Alibaba.

Second-quarter net sales came in at ¥1.67trn, marginally higher than the ¥1.6trn expected.

WeWork, which at its 2019 peak was privately valued at $47bn and was backed heavily by SoftBank, filed for Chapter 11 bankruptcy protection on Monday. The US firm signed a number of expensive leases prior to Covid-19, only to see demand to slump as hybrid working took off post-pandemic.

Chief financial officer Yoshimitsu Goto called the bankruptcy "a great shame". The losses offset gains SoftBank made from the initial public offering of chip designer Arm Holdings earlier this year.

The weaker yen had also weighed on the figures, as a number of SoftBank’s portfolio companies are valued in dollars.

For the first half of the year, SoftBank posted a ¥1.41trn loss on ¥3.2trn of net sales.