Softbank reported another surge in net profit for its fiscal first half to September, with the result jumping 719 percent to JPY 840.1 billion from JPY 102.6 billion a year ago. The growth was driven by gains on its investment portfolio, while revenues rose a more modest 6 percent year-on-year to JPY 4.65 trillion. Operating profit was up 62 percent to JPY 1.42 trillion, supported by improvement at Sprint.
At its domestic telecom business, which the Japanese company is preparing to spin off in order to focus on its investments, revenues in the first half rose 9 percent to JPY 446.9 billion. Adjusted EBITDA rose to JPY 672.7 billion from JPY 637.2 billion a year ago (adjusted for new accounting standards), and adjusted free cash flow increased 11 percent to JPY 366 billion. Capex rose to JPY 184 billion from JPY 129 billion a year earlier.
Softbank said it saw steady growth at the mobile business under its three brands Softbank Mobile, Y! Mobile and Line Mobile, with the low-cost Y! service growing to 20 percent of all customers. In the second quarter, net additions were similar to a year earlier, at 344,000, taking the total base to 33.954 million at the end of September (excluding 7.15 mln M2M Sims and 2.24 mln PHS line). ARPU dipped to JPY 4,330 from JPY 4,340 a year ago, while churn fell in Q2 on an annual and sequential basis to 0.93 percent.
The operator said it launched a new pricing system in September for the Softbank brand, separating the cost of the service plan from the handset. The same method will be introduced in FY 2019 for the Y! brand. The company is hoping its segmentation, with Y! focusing on the low-cost segment and Softbank targeting heavy data users, will allow it to respond to the political and regulatory pressure in Japan to simplify mobile pricing and reduce costs for consumers. Pressure on revenues will be offset by its efforts to boost workforce productivity and lower operating costs.
In the fixed broadband market, the company added another 166,000 new customers in the three months for a total of 7.385 million. The increase was largely at the Softbank Hikari fibre service, which finished the period with 5.5 million customers, while the Yahoo brand lost fibre and DSL customers in the quarter.
Softbank said it's still preparing for the IPO of the telecom business. Over the full fiscal year, it expects to report higher revenues and profit and stable free cash flow. The company will focus on its 'beyond carrier' strategy, to develop new revenue-generating services thanks to cooperation with other Softbank group companies, such as the Digi taxi-hailing service launched in September and the PayPay joint venture with Yahoo Japan.
