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Korean firms raise interim dividend payout.

The volume of dividends paid by leading Korean firms on the Seoul bourse has more than doubled this year.

Firms here used to often come under criticism for their stinginess in paying dividends, but Korea's National Pension Service's move to introduce the stewardship code encouraged a change in their stance.

The stewardship code refers to a set of guidelines aimed at making institutional investors active and engaging in corporate governance in the interests of their beneficiaries

Of the nation's top 30 firms by market capitalization, eight major companies, including Samsung Electronics and POSCO, have paid a combined interim dividend worth 8.34 trillion won ($7.38 billion) between January and September, more than double the amount recorded during the same period last year of 3.97 trillion won.

Of them, Samsung Electronics has taken the lead in the change.

The accumulated interim dividend paid by the nation's largest chipmaker is estimated at 7.23 trillion won during the January-to-September period, up more than 200 percent from a year ago. It paid 2.89 trillion won in the same period last year.

The company saw a 23 percent net profit growth in the third quarter year-on-year to 35.56 trillion won from last year's 29.32 trillion won. Reflecting its booming earnings, Samsung's payout ratio jumped to 20.3 percent this year compared to last year's 9.9 percent.

Samsung said during its regulatory filing conference on Oct. 31 that it is reviewing its plan to pay 9.6 trillion won worth of dividends every year until 2020.

POSCO has also steadily raised its dividend this year. It paid a 119.9 billion won interim dividend in the first quarter, 120 billion won in the second and 160 billion won in the third quarter of this year. Like Samsung Electronics, the nation's largest steelmaker said it is also reviewing its plan to additionally raise its dividend in 2019.

SK also paid an interim dividend worth 56.3 billion won in August. It was the first time for the company to pay an interim dividend.

Hyundai Motor, which posted a disappointing net profit of 1.63 trillion won between January and September this year, also raised its payout ratio to 16 percent from last year's 9 percent.

Although the nation's largest carmaker suffered a 45.4 percent decline in earnings in the period, it still paid a similar level of interim dividend at 268.6 billion won this year. It paid a 265.8 billion won worth of interim dividend last year.

"Amid the low interest rate and economic growth trends, more investors are now interested in dividends," said futures trader Lee Sang-hoon.

"Listed firms' efforts to attract more investors through raising their dividend will continue for awhile. They were too stingy in paying dividend in the past. It should change."

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Publication:The Korea Times News (Seoul, Korea)
Geographic Code:9SOUT
Date:Nov 20, 2018
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