The divestment of the two subsidiaries is a must, according to FPT chairman Truong Gia Binh, 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 percent and 25 percent to 23 trillion VND (1 billion USD) and 544 billion VND, respectively.

The reason for the decline in FPT’s trading and retail segment mainly came from the fall of mobile phone distribution business. Distributing iPhone products brought FPT a yearly profit of 300 billion VND between 2013 and 2015, but the profit fell 90 percent to only 34 billion VND in 2016.

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

In 2016, Microsoft, another technology company, eliminated its Lumia smart phones 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," Binh 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.

Binh said that the company was amending the divestment plan. The new plan, which would separate the sale of FPT Trading from that of FPT Retail, has drawn attention from some investors.

Regarding the future of FPT Telecom, Binh 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 percent 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 percent dividend in cash for 2017’s performance.

In 2016, FPT recorded a combined revenue of 40.54 trillion VND, equal to the previous year’s number, and a pre-tax profit of 3 trillion VND, 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 trillion VND, a year-on-year rise of 13 percent.

In 2017, FPT will focus its resources on the telecommunication 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 close at 47,300 VND per share.

VNA