Top electronics retailers Mobile World and FPT Retail see profits fall

FPT Retail is the parent company of consumer electronics chain FPT Shop and pharmacy chain Long Chau, while Mobile World presides over electronics chain stores The Gioi Di Dong and Dien May Xanh, as well as drugstore chain An Khang.

FPT Retail reported a consolidated post-tax profit of VND2 billion (US$84,746) in the first quarter, decreasing 99%, and realizing 8.3% of its full-year profit target.

FPT Retail plans to make pre-tax profits of VND240 billion in 2023, down from VND485 billion in 2022 and VND554 billion in 2021.

According to its Q1 financial statement, FPT Retail’s selling expenses rose by 25% to VND913 billion, and its financial expenses, mainly interest rates, nearly doubled to VND85 billion.

The revenue of FPT Shop dropped by 20% to VND4.5 trillion.

Meanwhile, Mobile World’s consolidated net profit plunged more than 90% to VND21 billion, the lowest quarterly profit since the corporation was listed in 2014.

Its consolidated revenue declined by 25% to VND27.3 trillion.

While consumers tightened spending, making fewer installment purchases, its chain stores had to conduct more promotions.

Mobile World Chairman Nguyen Duc Tai forecasts the retail market will not improve until the last two quarters of this year when production and exports show signs of recovery and interest rates stabilize.

The company plans to see revenues rise a modest 1% to VND135 trillion this year, the company’s lowest growth rate since 2009.

FPT Retail said it was difficult to predict when the retail market would recover so it would be cautious in opening new FPT Shop stores this year.

However, it plans open at least 400 more Long Chau pharmacies by the end of the year, increasing the total to 1,600.

Long Chau saw revenues surge 50% year-on-year to VND3.284 trillion in the first quarter.

Its 2022 revenues increased 2.4 times against 2021, with the pharmacy chain continuing to prove itself a growth engine for FPT Retail so far this year.