Programmers work at FPT Corporation (Illustrative image. Source: internet) The divestment of the two subsidiaries is a must, accordingto FPT chairman Truong Gia Binh, as FPT targets to be a pure ICT group withrapid and sustainable growth, while many investors have expected the group topart with the trading and retail units.
The group’s trading and retail units recorded a negativegrowth rate with its revenue and pre-tax profit falling 9 percent and 25 percentto 23 trillion VND (1 billion USD) and 544 billion VND, respectively.
The reason for the decline in FPT’s trading and retailsegment mainly came from the fall of mobile phone distribution business.Distributing iPhone products brought FPT a yearly profit of 300 billion VND between2013 and 2015, but the profit fell 90 percent to only 34 billion VND in 2016.
The US-based tech giant Apple changed its distributionpolicy for Vietnam’s market by allowing local retailers such as Mobile World todirectly import iPhone models.
In 2016, Microsoft, another technology company, eliminatedits Lumia smart phones and relevant services, forcing FPT to cut prices forLumia products and reduce its stockpiles of those products.
"The company will not hold the controlling stakes inthe two subsidiaries after the divestments are complete," Binh said.
"The income from the divestment deal will be recordedin FPT’s earnings report after 2017," he added.
FPT planned to offload parts of its ownership in FPTTrading and FPT Retail as a whole in 2016, however, the plan did not work outas the group failed to negotiate with buyers.
Binh said that the company was amending the divestmentplan. The new plan, which would separate the sale of FPT Trading from that ofFPT Retail, has drawn attention from some investors.
Regarding the future of FPT Telecom, Binh said that thegroup might increase its stake in FPT Telecom in case the Government sells itsstake in the company but the future remains uncertain.
At the annual shareholder meeting, shareholders approvedthe group’s plan to pay a 20 percent dividend in cash for 2016’s performance.Half of the dividend was paid in August 2016, the other will be paid in thesecond quarter of 2017.
Shareholders also approved the plan to pay a 20 percentdividend in cash for 2017’s performance.
In 2016, FPT recorded a combined revenue of 40.54 trillionVND, equal to the previous year’s number, and a pre-tax profit of 3 trillionVND, a yearly increase of 6 percent.
For 2017, FPT targets combined revenue of 46.6 trillion VND,a yearly increase of 15 percent from 2016, and pre-tax profit of 3.4 trillionVND, a year-on-year rise of 13 percent.
In 2017, FPT will focus its resources on thetelecommunication business and penetrating the 4G market.
FPT is listed on the Ho Chi Minh Stock Exchange (HOSE)under code FPT. The company’s shares on March 31 went up 0.4 percent to closeat 47,300 VND per share.-VNA
