FPT Retail debt hits record high

FPT Retail’s profit rose nearly 20 times year-on-year in 2021, but its liabilities were 5.4 times more than equity, mainly short-term debt.

Consolidated pre-tax profit reached VND554 billion ($4.34 million), 19.5 times higher than 2020 and 4.6 times higher than the plan in 2021, according to the firm’s audited consolidated financial statement.

FPT Digital Retail Joint Stock Company (HoSE: FRT) recorded consolidated revenue of VND22,495 billion ($176 million), a 53% rise year-on-year and 1.4 times higher than the plan.

The company’s profit spike this year is due to the strong growth of the main business segment. In 2019 and 2020, FPT Retail only fulfilled 51% and 14% of its profit plan, respectively.

In the fourth quarter of 2021, the company’s revenue doubled due to the successful launch of iPhones 13 series and Macbook Pro 2021, and the higher demand for laptops as more people work from home amid the pandemic. Long Chau drugstore chain also made a slight profit instead of a loss like in the same period last year.

As of December 31, 2021, FPT Retail’s total assets reached VND10,786 billion ($471 million), doubling the figure of the same period last year. In which, inventory increased by 2.7 times against last year, from VND1,826 billion to VND4,930 billion.

Notably, the company’s liabilities increased 2.2 times to VND9,106 billion ($397 million), 5.4 times higher than equity - the record height, mainly short-term debt.

Loans in USD have interest rates of 1.8 - 2.67%/year and loans in VND bear rates from 1.9 - 4.5%/year.

FPT Retail’s creditors are mainly foreign banks, with HSBC Vietnam lending more than VND965 billion ($42.17 million), Standard Chartered Vietnam VND805 billion, HSBC Hong Kong VND754 billion, DSB Vietnam VND733 billion, Unites Overseas Bank Vietnam VND 675 billion etc. Domestic lenders include Vietcombank, Vietinbank, BIDV, and MB, according to the financial report.

FPT Retail’s soaring debt is mainly used for business capital expansion, it noted.

The firm opened more than 200 Long Chau pharmacy outlets in 2021, raising the total to 400.

On the Ho Chi Minh Stock Exchange, the FRT stock closed at VND124,800 ($5.45) per share on Monday. Since the beginning of the year, the price has increased 24%, from VND100,200 to VND124,800 per share.