SoftBank revises loss estimate to $8.4 billion for FY20 due to WeWork write-down

The company said non-operating losses will touch 1 trillion Yen, of which 700 billion Yen will be attributable to WeWork.

"These non-operating losses were previously expected to total approximately JPY 800 billion, however they are currently expected to total more than JPY 1 trillion. Of this, approximately JPY 700 billion loss is attributable to the investment, loan commitment, and financial guarantee contract in favor of WeWork,” SoftBank said in the release.

Softbank maintained its operating loss. On April 13, SoftBank forecast a 1.35 trillion yen ($12.5 billion) operating loss for FY20 and 1.8 trillion yen loss from its Vision Fund.

“The difference in operating income is mainly attributable to the expected recording of investment loss of approximately JPY 1.8 trillion at SoftBank Vision Fund for fiscal 2019, resulting from a decrease in the fair value of investments due to the deteriorating market environment,” the company had said.

“The difference in income before income tax is mainly due to the expected recording of non-operating loss totaling approximately JPY 800 billion for fiscal 2019 on investments held outside of SoftBank Vision Fund, including The We Company (WeWork) and WorldVu Satellites Limited (OneWeb),” SoftBank had said.

This is first time in 15 years SoftBank expects to see a net loss. In FY19, SoftBank saw a profit of 1.4 trillion Yen.

SoftBank had invested over $13 billion into WeWork, but following troubles at the company, SoftBank also pulled out of its $3 billion bailout plan for the startup, thus getting into a legal battle.