14/05/2025

BIZ & FINANCE WEDNESDAY | MAY 14, 2025

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SoftBank Group books first annual profit in four years

COMMERCIAL-SCALE E-METHANOL PLANT OPENS IN DENMARK COPENHAGEN: The world’s first commercial-scale e-methanol plant began operations in Den mark yesterday, with shipping giant Maersk set to buy part of the production as a low-emission fuel for its fleet of container ships. Located in Kasso in southern Denmark, the new plant, which has cost an estimated €150 million (RM721.5 million), will produce 42,000 metric tons, or 53 million litres, of e-methanol per year, its joint owners Denmark’s European Energy and Japan’s Mitsui said. Maersk will be a major customer. It operates 13 dual-fuel methanol container vessels that can be powered with fuel oil and with e-methanol and has ordered another 13 of the vessels. It said, the plant’s annual production is enough to power one large 16,000 container vessel sailing between Asia and Europe. – Reuters HONDA PROJECTS 59% DROP IN FULL-YEAR EARNINGS ONTARIFF BITE TOKYO: Japan’s Honda Motor forecast a 59% profit decrease in the current financial year and said it would put on hold a plan to build an EV supply chain in Canada, amid the uncertainty stemming from US President Donald Trump’s tariffs. Japan’s second-biggest automaker expects operating income to total ¥500 billion (RM14.6 billion) in the year to March 31, 2026, versus ¥1.21 trillion in the year that just ended. Honda’s forecast is the latest signal of the difficulty carmakers are having navigating Trump’s tariffs on foreign-made automobiles at the same time the industry is being hit by the rise of Chinese EV producers. Honda also said it would put on hold for “approximately two years” a plan announced in April 2024 to build an EV supply chain in Ontario, Canada. That decision was taken due to the current slowdown in EV demand, it said. – Reuters

BR I E F S

munications companies, including T-Mobile US and Deutsche Telekom, have been a consistent source of investment gain in recent quarters. T-Mobile shares hit an all-time high in March and ended the quarter up more than 20%. SoftBank is in the midst of its most extensive spending spree since the launch of its Vision Funds – in 2017 and 2019 – this time targeting companies it deems to be leading the development of artificial intelligence. In March, it said it would acquire US semiconductor design company Ampere for US$6.5 billion (RM28.1 billion) and announced new investment of up to US$30 billion in ChatGPT maker OpenAI. SoftBank is also leading financing for the “Stargate” project – a US$500 billion scheme to develop data centres in the United States – saying most of the money would come through lenders in project finance schemes. The scale of the commitments has prompted analysts and investors to question SoftBank’s ability to weather market volatility brought about by new US tariffs. – Reuters

o Japanese conglomerate gets boost from strong performance in telecommunications holdings and higher valuations in its later-stage startups

TOKYO: Japan’s SoftBank Group yesterday reported its first annual profit in four years, likely bringing relief to investors scarred by high profile failures as the tech investor embarks on another series of mammoth investments. The Tokyo-based conglomerate reported ¥1.15 trillion (RM33.68 billion) profit for the year ended March versus a loss of ¥227.6 billion a year earlier. The figure got a boost from the ¥517 billion booked for January-March – more than double that earned in same period a year earlier – on strong performance from telecommunications holdings and higher valuations in its later-stage startups. The turnaround illustrates the risk and

reward of SoftBank’s approach of investing in high-growth technology companies, epito mised by the success of its investment in Chinese e-commerce leader Alibaba Group and bankruptcy of US office-space startup WeWork. Its Vision Fund 1, which invests in later-stage startups, recorded an investment gain of ¥940 billion in the fourth quarter, boosted by increases in the fair value of holdings such as TikTok operator Bytedance and e-commerce platform Coupang . In contrast, its Vision Fund 2, which invests in earlier-stage startups, booked an investment loss of ¥526 billion. SoftBank’s holdings in mature telecom

CATL offers banks slim fees in world’s largest listing this year HONG KONG: Investment banks handling the world’s largest listing so far this year are set to earn underwriting fees well below the industry norm, with advisers willing to endure skinny margins to win business following a prolonged slump in listings. listing last November. CATL said in the filing it may grant a 0.6% discretionary fee as an incentive. The razor-thin fees underscore challenging conditions for banks in Asia’s financial hub, even as a recent surge in trading volumes and new listings has ignited hopes for a revival in large Chinese issuances. International are the sponsors of the CATL deal. Each of the sponsors will earn US$300,000 for the role, which is around half the market average for the last five years, according to Dealogic data. CATL did not immediately respond to a request for comment.

Some underwriters jostled to win a role in the deal, willing to accept much slimmer fees than normal thus sacrificing margins, three sources with knowledge of the pitching process told Reuters. Goldman Sachs, Morgan Stanley and UBS are joint global coordinators on the CATL Hong Kong listing, with BNP Paribas and Guotai Junan in junior roles. However Goldman Sachs and UBS, both of which have worked on some of CATL’s previous equity deals, decided not to pursue more senior roles on the new listing partly due to the low fees, said two sources familiar with the matter. Goldman Sachs and UBS declined to comment. – Reuters

Nine underwriters of Shenzhen-listed battery giant CATL are slated to receive a maximum of HK$238.7 million (RM132.2 million), the Chinese company said in a securities filing on Monday, with much of that discretionary, based on the success of the deal. The fixed commission on what is Hong Kong’s biggest listing so far this year is just 0.2% of the proceeds raised, well below the industry average. It’s only a third of what home appliance manufacturer Midea paid banks last year for its near $4.6 billion listing in Hong Kong, and one fourth of the 0.8% underwriting fee awarded by China’s largest express delivery company SF Holding in its US$792 million Hong Kong second

“The fee income barely covers the cost, but banks are eyeing the discretionary fees and hope securing a role will help them stay on future deals,” said one source familiar with the pitching process. Banks typically get paid 2% to 2.5% of the total proceeds raised from a Hong Kong initial public offering, bankers say, but deals bigger than US$500 million could compress the fee to 1%. The commission paid to CATL’s underwriters would be 0.76% at its maximum. JPMorgan, Bank of America, China International Capital Corporation (CICC) and China Securities

Nissan posts ¥671 billion net loss for 2024-25, confirms plans to cut 20,000 jobs

former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box. The automaker, whose shares have tanked nearly 40% over the past year, appointed Espinosa CEO in March. Rating agencies have downgraded the firm to junk, with Moody’s citing its “weak profitability” and “ageing model portfolio”. And this month Nissan shelved plans, only recently agreed, to build a US$1 billion (RM4.3 billion) battery plant in southern Japan owing to the tough “business environment”. Of all Japan’s major automakers, Nissan is likely to be the most severely impacted by US President Donald Trump’s 25% tariff on imported vehicles, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP ahead of yesterday’s earnings report. Its clientele has historically been more price-sensitive than that of its rivals, he said. So the company “can’t pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units”, he added. – AFP

loss was ¥684 billion in 1999-2000, during a financial crisis that birthed its rocky partnership with French automaker Renault. The company’s shares closed 3% higher yesterday after reports, later confirmed by Nissan, said it was planning a total of 20,000 job cuts worldwide. As part of recovery efforts Nissan also said it would “consolidate its vehicle production plants from 17 to 10 by fiscal year 2027”. Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands, while its profits are also under threat from US tariffs. “In China, we will strengthen our market performance by unleashing multiple new energy vehicles,” it said in a statement. The possible merger with Japanese rival Honda had been seen as a potential lifeline but talks collapsed in February when the latter proposed making Nissan a subsidiary instead of integrating under a holding firm. Nissan has faced numerous speed bumps in recent years – including the 2018 arrest of

TOKYO: Japan’s Nissan posted a huge annual net loss yesterday while confirming reports that it plans to cut 15% of its global workforce and warning about the possible impact of US tariffs. The carmaker, whose mooted merger with Honda collapsed earlier this year, is heavily indebted and engaged in an expensive business restructuring plan. Nissan reported a net loss of ¥671 billion (RM19.65 billion) for 2024-25 but did not issue a net profit forecast for the financial year that began in April. It did say, however, that it expects sales of ¥12.5 trillion in 2025 26. “The uncertain nature of US tariff measures makes it difficult for us to rationally estimate our full-year forecast for operating profit and net profit, and therefore we have left those figures unspecified,” CEO Ivan Espinosa told reporters. “Nissan must prioritise self-improvement with greater urgency and speed.” The company’s worst ever full-year net

Espinosa speaking at Nissan’s fiscal year 2024 financial results briefing at the company’s headquarters in Yokohama, yesterday. – REUTERSPIC