POSCO Center building in Gangnam, southern Seoul. Korea Times file

By Lee Kyung-min

POSCO shareholders are expected to receive lower dividends than they hoped for in 2021 as the company decided to pay them about 17 percent of their net profit, according to analysts Monday.

The steelmaker's CEO, Choi Jeong-woo, said in a Jan. 5 letter to shareholders that the payout ratio would be at "a 30 percent level through to 2023." But the analysts said the plan was hard to achieve from the beginning.

Amplifying the collective fury further is POSCO's plummeting share price currently hovering at 267,000 won ($222), down sharply from 316,000 won in mid-January. This is the lowest level seen since last February when it dropped to 242,500 won, and almost half from the high of 413,500 won set last May.

Also at play is the limited possibility of a meaningful rebound in share prices in the near term, given POSCO's newly approved corporate restructuring plan which enables it to hold the entire shares of an envisioned spinoff to the exclusion of POSCO's current shareholders.

"It seems that POSCO shares are tanking to a new low every day," Korea Stockholders Alliance head Jung Eui-jung said. "What's the point of holding stocks at all, if we can't expect high dividends to offset losses from plummeting share prices? It is so frustrating."

Lower than expected

POSCO announced Jan. 28 that it will give a year-end per-share dividend of 5,000 won, raising the total dividend per share to 17,000 won.

The firm's dividend payout ratio, measured by dividend divided by corporate net income, will come to 17 percent, since the total dividends paid out surpassed 1.28 trillion won relative to the firm's net income of over 7.1 trillion won last year.

For context, the steel giant kept the ratio at 38.7 percent in 2020, after it paid out 620.3 billion won in dividends from a net income total of 1.6 trillion won.

Some market watchers say meeting the 30 percent ratio was an unattainable goal, given the unexpected earnings surprise lifted by a short-term spike in global demand for raw materials brought on by a partial recovery from the COVID-19 pandemic.

POSCO registered an operating profit of 9.23 trillion won in 2021, surging 284 percent year-on-year. This is the highest figure since 2008 when it hit 7.2 trillion won.

Operating profit also rose 32.1 percent from a year earlier to 76.3 trillion won and exceeded the important 70 trillion won mark for the first time.

SK Securities analyst Kwon Soon-woo said the record-high figures of last year set the bar too high for the steel giant.

"The firm is continuing its efforts to strengthen shareholder return policies, as evidenced by raising per-share dividends and retiring shares held by the firm as well as a gradual increase in the total amount of payout over the past few years," Kwon said.

POSCO officials were unavailable for comment.