SoftBank profit up 49 per cent on Flipkart, ARM stake sales

New Delhi: Japanese conglomerate SoftBank Group on Monday said its operating profit has jumped over 49 per cent in the June quarter, helped by its sale of shares in Indian e-commerce firm Flipkart.

The company, which registered operating income of 715 billion yen (USD 6.42 billion) during the quarter, also attributed the growth to sale of the majority of chip designer ARM Holding's Chinese operations.

"(Operating income was) Boosted by valuation gain of ¥244.9 billion at SoftBank Vision Fund: valuation gain of ¥164.3 billion (USD 1.4 billion) was recorded for Flipkart based on the expected sales price, following the sales agreement," SoftBank said in a statement.

It also recorded a "one-time gain of ¥161.3 billion following Arm's China business becoming an associate from a subsidiary due to the establishment of a joint venture", it added.

SoftBank said it estimates that the sale of Flipkart shares will occur within 24 months of the inception of the investment. It added that the company has "calculated the deferred tax at 43.68 per cent, being the Indian short-term capital gains tax rate expected to apply to the sale of Flipkart shares".

In May this year, SoftBank had decided to sell its about 20 per cent stake in Flipkart to US retailer Walmart. The deal is estimated to help SoftBank rake in about USD 4 billion from the sale. SoftBank had invested USD 2.5 billion in Flipkart last year through Vision Fund that is touted to be one of the world's largest private equity fund.

"Investments totaling USD 27.1 billion to date at SoftBank Vision Fund amounted to fair value of USD 32.5 billion... Total committed capital of USD 97.7 billion at SoftBank Vision Fund and Delta Fund," SoftBank said.