Published : Sept. 4, 2014 - 20:36
Dividend payments to shareholders by South Korean companies decreased, despite the government’s persistent efforts to increase benefits for investors.
The total amount of dividend of listed companies in the first half of this year was 455 billion won ($448 million), down 15.4 percent a year earlier, according to the Corporate Governance Service.
The corresponding figure includes not only quarterly dividends but also interim dividends, which were paid out in July, after the corporates’ half-year settlement.
“Most key companies have maintained or decreased their unit dividend and some, which paid out a considerable sum in interim dividend last year, decided to skip the payment altogether this year,” said an official of the CGS.
One of the examples is Woongjin Coway, the nation’s largest water purifier manufacturer.
Last year, the company paid 78.4 billion won in quarterly dividend, which was 1,050 per stock, and 123.6 billion won in total or 1,660 won per stock in the year-end settlement. But this year, it has so far remained low-key in terms of dividends.
Market bellwether Samsung Electronics, which holds 158 trillion won in corporate cash reserves, maintained its dividend at 500 won per stock for four consecutive years.
When Choi Kyung-hwan took office as vice economic prime minister and finance minister in early July, one of his top missions was to impose a special tax on excessive corporate reserves, hoping that the regulation would encourage companies to pay more dividends to their shareholders.
The industrial circles, however, complained that the plan would place too much financial burden on companies, which are still struggling to overcome the years-long market slump.
According to corporate financial information provider FN Guide, the operating profits of the 388 listed firms which have announced their half-year performance was 55.3 trillion won, down 4.04 percent from the same period last year.
While the government’s blueprint is gaining little sympathy from companies, asset management firms have been launching a series of value stock funds, placing higher value on companies which pay out a relatively high amount in dividend.
KB Asset Management and Korea Investment Management respectively kicked off KB Research High Value Fund and Korea Investment Dividend Leader Fund earlier this week.
By Bae Hyun-jung (tellme@heraldcorp.com)