FPT Says Earnings to Rise 20% on Demand for Vietnam Outsourcing

FPT Corp., Vietnam’s biggest listed telecommunications and software company, expects net income to gain 20 percent this year on increasing demand for outsourcing and systems integration.

Sales will rise by 23 percent, Phan Duc Trung, chief financial officer and vice general director, said in an interview. The company reported a 34 percent increase in 2009 net profit to 1.4 trillion dong ($73 million). Sales advanced 12 percent to 18.8 trillion dong.

“As the world economy recovers, we expect the number of clients in software outsourcing to go up,” Hanoi-based Trung said. “Enterprises in Vietnam are also showing a tendency to invest more in technology, so FPT’s market for systems integration will expand.”

Vietnam has risen to tenth place globally for outsourcing as measured by financial attractiveness, labor availability and costs, and confidence in the business environment, according to a report by A.T. Kearney. The nation jumped nine spots in the U.S. consulting firm’s 2009 Global Services Location Index, which measured 50 countries.

FPT expects demand from Japanese and U.S. companies for outsourcing to rise, Trung said. The Vietnamese technology group said its clients include Microsoft Corp., Panasonic Corp. and Hitachi Ltd.

Telecommunications added 31.7 percent to FPT’s pretax profit last year, and systems integration made up 24.4 percent, the biggest contributors.

Shares Outperform

The Vietnamese company gained 8.2 percent this year on the Ho Chi Minh City Stock Exchange, compared with a 3.6 percent increase in the benchmark VN Index. Its shares advanced 3 percent to 85,500 dong today, and the VN Indexrose 1.2 percent to 512.51.

Hanoi-based FPT has 143.8 million shares outstanding and a market value of 12.3 trillion dong, according to Bloomberg data.

The group may list FPT Trading Group Joint-Stock Co., its technology distribution subsidiary, by 2012 after finding so- called strategic partners for the unit, Trung said. In Vietnam, strategic partners typically provide business and technological know-how, as well as making a financial investment.

Bloomberg

Tags: FPT Vietnam, Vietnam IT, Vietnam Outsourcing market