Investment giant SoftBank Group said Tuesday net profit plunged 39 percent in the first quarter, following gains in the same period last year related to the US merger of T-Mobile and Sprint.

Net profit in the three months to June was 761.5 billion yen ($6.9 billion), the Japanese conglomerate said, compared with 1.26 trillion yen in the same period in the previous financial year.

The merger of US telecoms operators T-Mobile and Sprint -- formerly controlled by SoftBank Group -- was completed in April 2020, releasing 734.5 billion in net income, SoftBank said in a statement.

SoftBank Group has poured money into some of Silicon Valley's biggest names and hottest new ventures from AI to biotech through its $100-billion Vision Fund.

Last financial year, the telecoms firm turned investment behemoth reported Japan's biggest ever net profit thanks to tech shares rallies as people moved their lives online during the coronavirus pandemic.

But SoftBank's investment approach means large transactions can cause unpredictable fluctuations in its results, said Mariko Semetko, senior credit officer at Moody's Japan.

"Last year's record high follows the previous year's record loss, and signifies the highly volatile nature of the company's business," she told AFP.

"The company has a very fluid and complex capital structure, and unlisted investments and private financings that have limited transparency and are frequently collateralised."

"Its investment approach results in high governance risks," Semetko added.

In 2019-20, SoftBank reported a net loss of 961.6 billion yen -- its worst ever -- as the start of the pandemic compounded woes caused by its investment in troubled office-sharing start-up WeWork.

But it quickly returned to profit as the impact of Covid-19 lockdowns worked largely in its favour.

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