SK headquarters in Seoul / Korea Times file
By Kim Hyun-bin
SK Inc. and other group units are rushing to increase their stock dividends in hopes to satisfy and retain shareholders despite stock prices having plummeted in the past year, according to company officials and market analysts Wednesday.
SK's stock price reached 310,000 won early last March, but has since dropped by close to 29 percent to 223,000 won at market close, Wednesday.
To better enhance shareholder value, SK Inc. decided in a board of directors meeting, Wednesday, to pay a dividend of 6,500 won per share for the fiscal year ending 2021. When including the interim dividend of 1,500 paid last August, SK Inc. shareholders will receive a total of 8,000 won ($6.70) per share for the entire fiscal year.
The 8,000 won total is the largest annual dividend payment made by SK Inc. since it was restructured as an integrated holding company in 2015.
The total of dividend payments made to shareholders increased to around 447.6 billion won, up by 21 percent compared to the year before, and by about 114 percent from 208.7 billion won in 2016.
SK Inc. says the dividend size is a reflection of its financial status and total investments.
SK Group Chairman Chey Tae-won
"As an investment-specialized company, we are strengthening our ability to practice the financial story centered on our four core businesses, while establishing a virtuous cycle of investment through active profit realization," said Lee Sung-hyung, CFO of SK Inc. He added, "We will continue to provide shareholder returns at the highest rate possible."
SK Innovation also decided to distribute 0.011 treasury stocks to shareholders for each common or preferred stock. The stock dividend move came 10 days after the company's announcement of its "no dividends" policy which faced strong opposition from the board of directors.
SK Innovation held a board of directors meeting Monday, announcing that it had changed its decision to pay dividends for 2021. The company had initially decided not to pay shareholder dividends in consideration of large-scale investments, but the board of directors urged that it was necessary to pay shareholder dividends in consideration of shareholder value and trust, as the company made a turnaround to create profits last year.
SK Innovation pays 0.011 treasury stocks for each common and preferred stock, and a cash dividend of 50 won per preferred stock.
On the same day, SK Innovation also announced its medium-term dividend policy, stating that it would aim for an annual dividend payout ratio of 30 percent or higher for the next three years.
"In the future, we will continue to communicate with the market to enhance the trust of shareholders and stakeholders and reflect them in the establishment of shareholder return policies," an SK Innovation official said.
SK Gas also announced it would pay 5,100 won per common share in cash dividends for 2021. This is a 28 percent increase from the previous year, with the total dividend payments standing at 45.8 billion won.
