PiCK
SK Hynix Unveils $43.2 Billion More in Shareholder Returns, Taking Dividends and Buybacks to $21.6 Billion Each
Summary
- SK Hynix said it will expand this year’s total shareholder returns to $72 billion and step up efforts to raise corporate value and strengthen shareholder-friendly management.
- It set a third-quarter cash dividend of $10.1 billion and will pay a $14.40 dividend per share, saying it will return Kioxia investment gains through a special dividend.
- The company said it will spend more than $21.6 billion in cash dividends, more than $21.6 billion in share buybacks, and use more than 50% of free cash flow (FCF) for shareholder returns.
Forecast Trend Report by Period
Formalizes $72 Billion in Shareholder Returns This Year
Sets $14.40-a-Share Dividend for Nov. 30
SK Hynix unveiled an additional $43.2 billion shareholder return plan. Combined with the previously completed $28.8 billion share buyback and cancellation program, the chipmaker’s total shareholder returns for this year will reach $72 billion. The company plans to use record earnings, including quarterly revenue above $72 billion, to raise corporate value and strengthen shareholder-friendly management.
SK Hynix said on October 28 that its board approved a $14.4 billion share buyback and cancellation plan. Of that, $7.2 billion will be repurchased for shareholder returns and canceled in full. The remaining $7.2 billion will be used for employee compensation and is not included in the shareholder return total.
The company set its third-quarter cash dividend at $10.1 billion. It fixed the payout at $14.40 a share, combining a $7.20 dividend tied to strong earnings and another $7.20 reflecting gains from its investment in Japanese semiconductor company Kioxia. Chief Executive Officer Kwak Noh-jung said the company’s principle is to share most of the gains from successful strategic investments with shareholders. In line with that principle, it plans to return this year’s realized profit from the Kioxia investment as a special dividend. The record date is Nov. 30, and the dividend will be paid within a month of that date.
Additional shareholder return measures are expected in the fourth quarter. SK Hynix plans to spend more than $21.6 billion on cash dividends and more than $21.6 billion on share buybacks in the third and fourth quarters. It completed the previously announced $28.8 billion share repurchase program last week.
SK Hynix is strengthening a shareholder return policy tied to free cash flow, or FCF, generated by earnings. It previously said it would use more than 50% of FCF for shareholder returns. Securities firms estimate the company’s FCF this year at $129.6 billion to as much as $172.8 billion.
Won Jong-hwan, Hankyung.com reporter won0403@hankyung.com
Korea Economic Daily
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