FIT Group and its affiliates are looking forward to one of the most important events of the restructuring process: the shareholders’ general meeting season – the important decision-making season.
In 2017, the shift towards new business orientation, towards sustainable value for shareholders, has gone hand in hand with important investment decisions made by the Group as well as its affiliates. Specifically, Cuu Long Pharmaceuticals JSC (DCL on the HSX) has bought the Euvipharm plant, built the new Capsule III plant, and especially joined the joint venture to produce Benovas cancer drug with SCIC. At the same time, Can Tho Agricultural Materials JSC (TSC on the HSX) has been cutting down on businesses that are no longer suitable for its ability such as TSP and reducing other commercial activities. Khanh Hoa Mineral Water Joint Stock Company – FIT Beverage (VKD on HNX), which owns Danh Thanh mineral water source with a pH of above or equal 8.5, especially rare in Vietnam, has invested heavily in production system, product design and especially distribution system. And finally, perhaps most importantly, the Group has chosen to follow the path of transparency, efficiency and integrity with the market for what it does.
Restructuring has never been an easy process, and the loss is inevitable. FIT as well as the member companies are not out of the law. The most obvious is the decline in sales in most businesses, as a consequence of the new construction investment process and the reshaping of the business model. Financial data for the end of 2017 shows a 33% decrease in sales compared to 2016. This drop in sales led to a decline in profitability, even not respectively, at 21%. In particular, TSC suffered a loss of 30 billion VND and VKD was not profitable.
But it is a worthwhile tradeoff, as the performance criteria have begun to improve. The norms of profit before tax and after tax compared to sales and gross profit have improved compared to before, averaging among the business segments. One example is that pre-tax profit and after-tax profit grew from 8.1% to 10.1% and from 5.9% to 6.9% respectively in 2017 compared to 2016. Notably, the Group’s operating cash flow increased sharply from 90 billion VND in 2016 to 97 billion VND in 2017. Although new results are beginning, it has slowly proved a viable option: sustainable shareholder value has been chosen to replace short-term flashies.
In general, the process of restructuring and shaping new business models is on the right track. 2018 will be the year in which these tireless efforts, which can be said to be short-term benefit sacrifices, continue to be seen more clearly in business results. It can be seen that the leaders and employees of the Group and its affiliates have been working hard to welcome a new future for the Group. Looking at the business plan which is the result of serious and ongoing discussions between the manager and staff about the company’s capabilities and market potential, we can trust the good results waiting ahead. It is never slow to do the right thing.
