SSI Research forecasts that the profit of the Long Châu pharmacy chain in 2024 could reach VNĐ385 billion, while the profit of the FPT Shop chain could recover to around VNĐ155 billion if the number of stores is not further reduced. — Photo FPT Retail Corporation
FPT Retail Corporation (FRT) announced that the revenue of its Long Châu pharmacy chain in Q4/2023 grew by 60 per cent, becoming the new growth driver of the company.
FPT Retail Corporation has just released its consolidated financial report for the fourth quarter of 2023, with net revenue reaching VNĐ8.69 trillion, a 3 per cent increase compared to the same period in 2022.
Among them, the Long Châu pharmacy chain has become a new growth driver with a revenue increase of up to 60 per cent.
On the other hand, the revenue of the FPT Shop electronics and appliances retail chain decreased by 27 per cent, mainly due to weak demand, especially as demand for iPhone 15 cooled down quickly after the late third quarter sales.
After deducting the incurred expenses in business operations, FPT Retail reported a consolidated pre-tax loss of VNĐ97 billion for the fourth quarter of 2023, compared to a profit of VNĐ113 billion in the fourth quarter of 2022.
Representatives of FPT Retail stated that the main reason for the loss was the emergence of certain one-time expenses, including: business efficiency bonuses when the results of the Long Châu chain far exceeded the 2023 plan (by nearly VNĐ1.9 trillion) and the opening of about 100 more stores compared to the year's target; expenses for expired products of the Long Châu chain; costs of closing 36 inefficient FPT Shop stores; and investment costs in vaccination centres and digital transformation.
According to FPT Retail representatives, if excluding the aforementioned expenses, the Long Châu chain would achieve equivalent efficiency to previous quarters, and the business efficiency of this pharmacy chain is expected to be maintained in the coming quarters.
For the entire year of 2023, FPT Retail recorded total revenue of VNĐ31.9 trillion, a 6 per cent increase compared to 2022. The Long Châu chain contributed 50 per cent of the consolidated revenue with a growth rate of 66 per cent, while the revenue of the FPT Shop chain declined by 22 per cent year on year.
As a result, FPT Retail reported a consolidated pre-tax loss of VNĐ294 billion for the whole year, compared to a profit of over VNĐ485 billion in 2022. This retail company achieved 93.6 per cent of the annual revenue target but did not achieve the profit target of VNĐ240 billion.
Many financial institutions assess that the Long Châu chain will be the long-term growth driver for FPT Retail in the context of the electronics retail sector reaching saturation. In 2023, the Long Châu chain opened an additional 560 stores, bringing the total number of pharmacies to 1,497. The average revenue per pharmacy per month remains at VNĐ1.1 billion. In terms of scale and business efficiency, the Long Châu chain is surpassing its competitors in the market.
According to SSI Research, the Long Châu chain possesses certain competitive advantages compared to other companies in the same industry, such as a wider product range, larger scale, and higher revenue from prescription drugs, which helps the chain gain market share from the hospital channel.
SSI Research forecasts that the profit of the Long Châu chain in 2024 could reach VNĐ385 billion, while the profit of the FPT Shop chain could recover to around VNĐ155 billion if the number of stores is not further reduced.
In 2023, the FPT Shop chain reduced its number of stores by 31 to 755 stores. Some of these stores were converted to the Long Châu chain, taking advantage of their convenient locations and suitability for the pharmacy model. — VNS