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SoftBank Group first-quarter profit falls 4%, but tops estimates

Japan's SoftBank Group Corp raked in a better-than-expected quarterly operating profit as it saw a leap in investing gains from its $100 billion Vision Fund. The group's results have been increasingly volatile as founder and Chief Executive Masayoshi Son shifts focus from the predictable income of telecoms in favor of bets, through its mega fund, on fast-growing startups with shifting valuations. SoftBank said on Wednesday its operating profit at the Saudi-backed $100 billion Vision Fund surged 66% to 397.6 billion yen for the first quarter ended June. The fund's $66.3 billion investment in 81 firms is now worth $82.2 billion, the group added, as the value of its bets in firms like hotel chain OYO and delivery service Doordash grew. Much of the Vision Fund's gains are paper profits, with its unrealized gains in the first quarter totaling 604 billion yen. That was, however, offset by 195 billion yen in unrealized losses from a drop in value of its stake in firms like ride-hailing firm Uber (N:UBER) that is trading below its IPO price. The giant technology investor's operating profit for the first quarter was 688.8 billion yen ($6.49 billion), down 3.7 percent from a year ago when results were propped up by a stake sale in chip designer Arm's China business. The latest results outstripped a 336 billion yen estimate from five analysts compiled by Refinitiv. The results come as SoftBank prepares to launch a second Vision Fund for which it said last week it has secured $108 billion in pledges. SoftBank plans to commit $38 billion to the new fund. It will be reliant on proceeds from the first Vision Fund to bankroll the contribution, a source has told Reuters. CEO Son will speak at a news conference from 1600 local time (0700 GMT).