FIT 2018 AGM: Restructuring the business towards sustainable value for shareholders

FIT appoints Director of Investment and Director of Legal Department
4 May, 2018
April 2018 IR Newsletter
5 May, 2018

On April 27, 2018, the Annual General Meeting of Shareholders of FIT Group 2018 took place in the 5th floor – Times Tower – HACC1 Complex – 35 Le Van Luong – Thanh Xuan District – Hanoi.

The meeting has approved: Report on business results in 2017; Plan 2018 and other issues under the authority of the General Assembly of Shareholders.

According to FIT’s 2017 business results report, 2017 is not an impressive fiscal year, just looking at absolute numbers. In particular, revenue declined the most, only 67% compared with 2016, while other indicators only reached 80% to 95% over the same period. However, it is worth noting that the operating cash flow increased sharply, from minus 90 billion in 2016 to 97 billion in 2017.

The decline in sales comes from the fact that the Group actively reduces the business activities of the Cantho Agricultural Technology and Technique Joint Stock Co (TSC on the HSX) with the divestment in Can Tho Agro-chemical Joint Stock Company (TSP) from late 2016 and stop of the commercial activities of Nong Tin in 2017. The decrease in sales of the TSC group led to a sharp decline in sales of the Group. However, this decline in sales is necessary because of the future value of shareholders.

In addition to the decline in revenue due to the shrinking of non-core businesses, the concentration of resources on the strengths of Pharmaceuticals and Foodstuffs has led to the acquisition and investment of new plants, contributing to the sluggish business operations. However, these declines are not worrisome as the critical criteria reflecting business performance have been improved. This means that revenue will return to growth after business restructuring and basic investment is completed, and hence the profitability criteria will be better due to improved performance.

In addition, the cash flow has grown sharply and has shifted from negative to positive, indicating to some extent that the Group is operating on a safer basis of finance. In other words, the Group is creating value for its shareholders through greater efficiency in its operations.

The belief in shareholder value in the future is reinforced by looking at the financial position of the Group. It is noteworthy that the value of stocks over the same period in 2017 increased 50% in the context of restructuring Group is a good sign that the market has a positive outlook for the potential value of FIT.

With the ambition of becoming a billion dollar corporation in the future, 2018 is considered to be a year of continued investment, besides continuing to take advantage of financial investment opportunities to promote the strength of the company, contributing to increasing business efficiency. Specifically, net revenue is expected to reach 2,037 billion VND, up 21% while after-tax profit will come in at 127 billion VND, up 13% compared to 2017. As for the food industry, the Group will continue to expand its raw material areas to minimize the risk of external supply, increase production capacity to expand the market as well as improve business performance. With the pharmaceutical industry, continue to closely follow the investment activities to ensure the timely, economical and effective and restructure the member companies to bring DCL to new heights, not just stopping at the profit growth numbers. As for consumer goods, continue investing to stabilize the market, develop new products as well as strengthening and enhancing the brand to step by step bring member companies into the ranks of leading companies in the commodity line.

It can be said that the strategic plan that FIT implemented in 2017 has helped the Group to make strong changes: shaping the business model which focuses on key areas such as pharmaceuticals, foodstuffs, consumer goods, and gradually eliminating ineffective areas. FIT has invested heavily to become a more transparent, friendly group to consumers, shareholders and investors.

And with positive signals from 2017, with plans approved in 2018, the Group will gradually harvest fresh fruits as its core industries are gradually consolidating their position and growth while the ineffective fields will be limited to ensure the safety of the Group’s business operations. With the current performance, FIT is gradually asserting the great potential of an efficient investment finance group, increasing shareholder value through a diversified portfolio of investment advisory services, quality portfolio, professional personnel.