FPT Retail expects $10 mln profit in 2023

FPT Retail, owner of FPT Shop and Long Chau Pharmacy, is targeting revenue of VND34 trillion ($1.45 billion) and pre-tax profit of nearly VND240 billion ($10.2 million) in 2023, up 13% and down 51% year-on-year, respectively.

The figures were released at the company's 2023 annual general meeting of shareholders on Friday.

At the meeting, Nguyen Bach Diep, who runs the Long Chau drugstore chain, said that most of the stores have sales of over VND550 million ($23.45 million) per month, and are starting to profit after half a year of operation.

"We have a clear goal when opening a store, which is to make a profit after six months. Of course, some stores don't, but in general 99% of stores have done this," she told the meeting.

Diep said that Long Chau's profit margin in the next five years will certainly improve year by year, but the company remains loyal to the orientation of supplying cheap goods to Vietnamese consumers. The absolute value of annual profit will grow well.

According to Diep, by the end of Q1/2023, the company has opened 100 stores. Most are located in districts and townships. "The first goal is to meet the characteristics of the drug industry: convenient, close to home. FPT Retail is penetrating deep inside residential areas."

Diep said that although consumers are tightening their spending, medicine is an essential product, so basically it won't be too affected. Of course, supplements or medical devices may be slightly affected.

Long Chau Pharmacy expects its drugstore chain to achieve a full-year revenue of VND14 trillion ($597 million) in 2023, up 46% year-on-year. This figure takes into account the sharp decline in purchasing power because of consumers' spending tightening. Profit is expected to double compared to the VND52 billion ($2.22 million) last year, thereby becoming the main growth driver for the parent company.

"The market potential is great, so the average revenue per store cannot stop at the current VND1 billion ($42,650). We will add many services to increase revenue, not just opening and selling pharmacies," Diep added.

Early March, Bayer Vietnam of German healthcare and nutrition corporation Bayer and FPT Retail’s Long Chau Pharmacy chain had embarked on a strategic partnership in advancing community healthcare in Vietnam.

Under the partnership, the two sides join hands in further training Long Chau pharmacists and organizing programs providing common knowledge on pathology.

The two partners will also use their digital technology and available resources in three areas, namely improving the professional capacity of the chain’s pharmacists, providing knowledge on pathology, and ensuring medicine supply for patients.

In 2022, FPT Retail, listed on the Ho Chi Minh Stock Exchange as FRT, recorded consolidated revenue of VND30.17 trillion ($1.29 billion) and pre-tax profit of VND486 billion ($20.73 million).

Of this, FPT Shop achieved a revenue of VND20.69 trillion ($882.28 million), up 11% year-on-year, while Long Chau Pharmacy's revenue reached VND9.6 trillion ($409.22 million), 2.4 times.

The FRT share price hit VND65,000 ($2.8) per unit at Friday's closing session.