Friday, August 18 2017

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FPT looks to sell trading and retail units in 2017

Update: April, 01/2017 - 09:00
Programmers work at FPT Corporation. Viet Nam’s largest ICT group saw a slight increase in its pre-tax profit for 2016. — Photo chungta.vn
Viet Nam News

HÀ NỘI — FPT Corporation may complete its divestment from FPT Trading and FPT Retail sub-units in 2017, officials said at the company’s annual shareholder meeting yesterday.

The divestment of the two subsidiaries is a must, according to FPT chairman Trương Gia Bình, as FPT targets to be a pure ICT group with rapid and sustainable growth, while many investors have expected the group to part with the trading and retail units.

The group’s trading and retail units recorded a negative growth rate with its revenue and pre-tax profit falling 9 per cent and 25 per cent to VNĐ23 trillion (US$1 billion) and VNĐ544 billion, respectively.

The reason for the decline in FPT’s trading and retail segment mainly came from the fall of cellphone distribution business. Distributing iPhone products brought FPT a yearly profit of VNĐ300 billion between 2013 and 2015. In 2016, profit from iPhone distribution fell 90 per cent to only VNĐ34 billion.

The US-based tech giant Apple changed its distribution policy for Viet Nam’s market by allowing local retailers such as Mobile World to directly import iPhone models.

In 2016, Microsoft, another technology company, eliminated its Lumia smartphones and relevant services, forcing FPT to cut prices for Lumia products and reduce its stockpiles of those products.

"The company will not hold the controlling stakes in the two subsidiaries after the divestments are complete," Bình said.

"The income from the divestment deal will be recorded in FPT’s earnings report after 2017," he added.

FPT planned to offload parts of its ownership in FPT Trading and FPT Retail as a whole in 2016, however, the plan did not work out as the group failed to negotiate with buyers.

Bình said that the company was amending the divestment plan. The new plan would separate the sale of FPT Trading from that of FPT Retail and had drawn attention from some investors.

Regarding the future of FPT Telecom, Bình said that the group might increase its stake in FPT Telecom in case the Government sells its stake in the company but the future remains uncertain.

At the annual shareholder meeting, shareholders approved the group’s plan to pay a 20 per cent dividend in cash for 2016’s performance. Half of the dividend was paid in August 2016, the other will be paid in the second quarter of 2017.

Shareholders also approved the plan to pay a 20 per cent dividend in cash for 2017’s performance.

In 2016, FPT recorded a combined revenue of VNĐ40.54 trillion, equal to the previous year’s number, and a pre-tax profit of VNĐ3 trillion, a yearly increase of 6 per cent.

For 2017, FPT targets combined revenue of VNĐ46.6 trillion, a yearly increase of 15 per cent from 2016, and pre-tax profit of VNĐ3.4 trillion, a year-on-year rise of 13 per cent.

In 2017, FPT will focus its resources on the telecommunication business and penetrating the 4G market.

FPT is listed on the HCM Stock Exchange under code FPT. The company’s shares yesterday went up 0.4 per cent to close at VNĐ47,300 per share. — VNS

 

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