On April 27, Viettel Post Joint Stock Corporation (Viettel Post – code VTP) held its 2024 Annual General Meeting of Shareholders to approve the business plan with a consolidated revenue target of VND 13,189 billion and a profit after tax of VND 370 billion. In 2024, Viettel Post continues to narrow down its scope of business by reducing the sale of phone SIM cards to focus on the delivery and logistics sectors, which offer better profit margins. The Corporation stated that this narrowing of scope has an insignificant impact on absolute profit and will help improve the overall profit margin. This year, Viettel Post sets a revenue target of VND 9,147 billion for the delivery and logistics sectors, a 33.3% increase compared to 2023.
With the mission of pioneering in planning and building smart, green, and efficient national logistics infrastructure, Viettel Post is striving to develop a comprehensive logistics infrastructure plan, including logistics parks, bonded warehouses, and inland ports to connect farming regions, industrial parks, and transportation hubs such as roads, railways, airports, seaports, and border gates. This will ensure the fastest and most cost-effective circulation of goods.
In the first quarter of 2024, Viettel Post recorded positive results, especially in the services sector, with delivery revenue reaching VND 1,853.2 billion, a 53.6% increase compared to the same period in 2023. Revenue from the logistics sector reached VND 222.8 billion, a 31.6% increase compared to Q1/2023. Pre-tax profit for the quarter was VND 73.6 billion, exceeding the plan by 13.2%.
Aiming for a Tenfold Increase in Revenue within Five Years
In response to a shareholder’s question about the vision for 2024-2029, with a target of ten times the revenue of 2023, Mr. Hoang Trung Thanh, CEO of Viettel Post, shared that this goal represents the company’s aspiration and vision to continuously develop and enhance its position over the next five years. Viettel Post’s goal and aspiration are to achieve a tenfold increase in revenue within the next five years. Each year, the company’s management sets specific targets. “For 2024, we presented a target of over 30% growth in delivery and logistics revenue to our shareholders, but our management team set a goal of 45% growth. Setting higher operational targets is how Viettel Post turns its aspirations into reality,” said the CEO of Viettel Post.
When assessing the Vietnamese e-commerce market, reports indicate that Vietnam is the fastest-growing e-commerce market in the ASEAN region and one of the fastest-growing in the world, with an average annual growth rate of 30-35%. If Viettel Post aims for a higher growth rate than the market, around 50-55%, it will achieve a tenfold increase in revenue within five years.
Regarding this ambitious goal, Mr. Nguyen Thanh Nam, Vice President of Viettel Group and Chairman of Viettel Post’s Board of Directors, added that to maintain the expected growth rate and profitability, Viettel Post would need to invest more. As a state-owned enterprise, along with Viettel’s strengths in financial resources, technology, and human capital, Viettel Post is currently one of the few enterprises in Vietnam capable of constructing key components of the national logistics infrastructure, such as smart border gates and logistics parks. “If we venture into new areas, the opportunities are immense. If we don’t, growth will only be average, without any breakthroughs,” emphasized the Chairman of Viettel Post.
On the feasibility of the tenfold revenue goal within five years, Mr. Nam believes it is achievable. However, it is important to consider profitability as a crucial factor. Going forward, as Viettel Post invests more in smart border gates and national logistics systems, profits may initially decline due to higher depreciation costs. “It’s normal for revenue to increase rapidly while profits lag in the initial investment phase,” shared the Chairman of Viettel Post. Therefore, the company must strike a balance to remain among the top 1, 2, or 3 in the industry while ensuring that profit growth surpasses the industry average and that dividend payouts exceed bank interest rates.
Aiming for Market Leadership in Logistics Infrastructure and Delivery
Regarding competition with peers, Chairman Nguyen Thanh Nam affirmed that when Viettel enters new business areas or conducts research, it always aims to be the best and among the top players in the market. This is evident in the company’s number one position in Vietnam in sectors such as telecommunications and cybersecurity. Therefore, in the logistics industry, Viettel Post also strives to become the number one or number two player in core areas such as delivery and the development of national logistics infrastructure.
“We must aim for the top market positions because, in the long run, we won’t be able to sustain our position if we’re only third or fourth,” shared the Chairman of Viettel Post.
Balancing Profit Distribution between Shareholders and Employees
For the 2023 profit distribution plan, Viettel Post expects to allocate VND 195.9 billion, equivalent to 51.7% of post-tax profits, to various funds: Investment and Development; Reward and Welfare; Bonus for the Executive Board, Supervisory Board, and members of the Board of Directors.
Increasing the allocation for the Reward and Welfare Fund ensures incentives for employees to participate in competitions and motivates them to achieve the high growth targets set for the year. At the same time, it guarantees that the company’s human resources will enjoy better income and benefits compared to competitors in the industry, helping to attract and retain high-quality talent.
Additionally, Viettel Post is transitioning approximately 9,000 outsourced workers to labor contracts in 2024. This change will provide mail carriers with greater job security and improve service quality. In 2024, the allocation for the Reward and Welfare Fund is expected to stabilize, and the budget for welfare expenses is not expected to fluctuate significantly compared to 2023.
Furthermore, Viettel Post will use the remaining VND 182.6 billion, after allocating to the funds as required, to pay cash dividends to shareholders at a rate of 15% (VND 1,500 per share). This contributes to balancing the interests of shareholders and employees.
