Leading business conglomerate Vingroup, one of the nation’s largest real estate developers and a retail sector giant, targets higher revenues but expects lower net profit this year.
At the group’s annual shareholders meeting held on Wednesday in Ha Noi, the board of shareholders approved a total revenue target of VND80 trillion (US$3.5 billion) for the year, and a post-tax income of VND3 trillion ($134.2 million).
In 2016, the company earned net revenues of VND57.61 trillion ($2.57 billion), up 69 per cent over 2015, and a post-tax income of VND3.51 trillion ($157 million).
The group’s 2017 targets show a year-on-year drop of 15 per cent in post-tax income, but a 40 per cent increase in revenues.
The value of real estate transactions was VND83 trillion ($3.7 billion), with 15,000 apartments, villas, townhouses and hotel condos sold.
Vingroup Chairman Pham Nhat Vuong said that increase in revenues do not necessarily mean an equally high increase in profits, because of changing market conditions.
Vingroup paid VND6.18 trillion ($276 million) in taxes in 2016.
The group informed its shareholders that it would continue to issue new shares and intensify focus on its retail sector operations.
The group’s stocks are publicly traded on the HCM Stock Exchange under the stock code of VIC. On Thursday, VIC stock stood at VND40,900 per share.
Announcing its audited, consolidated earning results for 2016, the group said net profit attributable to the shareholders was VND2.43 trillion or VND1,178 per basic and diluted share compared to VND1.21 trillion or VND558 per basic and diluted share the year before.
All of Vingroup’s core businesses grew and secured significant market shares last year, the meeting heard.
The retail sector showed the most significant growth last year, as its supermarket chains, convenience stores and other retail outlets posted a 115 per cent increase over 2015, earning total revenues of VND9.24 trillion ($413.4 million).
Three years after it entered the sector, the group now operates more than 1,000 retail stores across the country, serving more than 56 million customers.
Other areas earning high returns in 2016 included the hotel, travel and recreation business with VND4.25 trillion ($190 million) for a 49 per cent increase from 2015’s figure; the health and medical care service sector with VND1.09 trillion ($48.77 million) for a 42 per cent increase; and the education sector with VND713 billion ($31.9 million), a 39 per cent increase.
Vingroup opened two new hotels and 10 new shopping malls in 2016, bringing the total to nine hotels and 32 malls.
The board’s decisions and future business plans received near unanimous approval of 96 to 100 per cent from shareholders. — VNS