Telecom Companies Increasing Total Dividends Despite Declining Earnings... Over 1 Trillion Won for 4 Consecutive Years

[Asia Economy Reporter Joselgina] Despite deteriorating earnings, domestic mobile carriers are strengthening their 'shareholder return' policy by increasing dividend payouts. The dividends of the three major carriers have recorded over 1 trillion won for four consecutive years.

According to the Financial Supervisory Service on the 6th, the total dividends of the three carriers?SK Telecom, KT, and LG Uplus?in 2019, including interim dividends, were approximately 1.1745 trillion won. This represents a 1.1% increase compared to the previous year. By company, SK Telecom paid the most with 730.09786 billion won, followed by KT with 269.7657 billion won, and LG Uplus with 174.64454 billion won.

SK Telecom and KT's dividends per share were 10,000 won and 1,100 won respectively, unchanged from the previous year, but the total amount increased due to changes in the number of shares. SK Telecom's total dividends rose nearly 2% from about 717.4 billion won a year ago. KT also saw a slight increase. Among the three, only LG Uplus maintained the same dividend amount as the previous year.

The total annual dividends of the three carriers surpassed 1 trillion won for the first time in 2016 and have remained above that level for four consecutive years. This indicates that despite significant 5G investments and fierce competition leading to a sharp decline in earnings, the policy to strengthen shareholder returns is being maintained.

SK Telecom's total dividends rank within the top 10 among all listed companies in Korea. It has also conducted interim dividends for three consecutive years. As net profit decreased last year, the dividend payout ratio surged from 22.94% to 82.04%. The dividend payout ratio is a representative indicator showing how much profit a company returns to shareholders by measuring the proportion of dividends to net income. KT and LG Uplus recorded payout ratios around 40%.

The mobile industry is also considering new dividend policies. SK Telecom stated during the 2019 earnings conference call held last month, "It is time for a new dividend policy," and added, "We will carefully discuss the future direction of dividends to maximize shareholder value."

This content was produced with the assistance of AI translation services.