SK Hynix Reports 5 Trillion KRW Operating Profit Last Year... Dividend per Share 1,170 KRW (Update)

[Asia Economy Reporter Kim Hyewon] SK Hynix held a management performance briefing on the 29th and announced that its operating profit based on consolidated financial statements for last year increased by 84.3% year-on-year to 5.0126 trillion KRW. During the same period, sales rose 18.2% year-on-year to 31.9 trillion KRW, and net profit increased by 136.9% to 4.7589 trillion KRW. The operating profit margin was recorded at 16%.

SK Hynix Vice President and CFO, Noh Jongwon, explained, "Last year, the memory market showed sluggish trends due to the global pandemic and intensified trade conflicts. Despite this, the company stably mass-produced key products such as 10-nanometer class 3rd generation (1Z-nanometer) DRAM and 128-layer NAND." He added, "Based on quality competitiveness, we expanded our market share in the server market, achieving sales and operating profit growth of 18% and 84% respectively compared to the previous year."

Operating profit for the fourth quarter of last year was 965.9 billion KRW, up 298.3% year-on-year, and sales were 7.9662 trillion KRW, increasing by 15%. The operating profit margin for the fourth quarter was 12%. Net profit turned positive to 1.7677 trillion KRW compared to the same period last year. The company stated, "Despite sales declines due to price drops and a weak dollar, we actively responded to strong mobile demand continuing from the third quarter, achieving an operating profit increase of 298% year-on-year."

By product, DRAM shipments increased by 11% compared to the previous quarter, while the average selling price fell by 7%. NAND flash shipments rose by 8%, with the average selling price dropping by 8%.

Regarding the DRAM market this year, SK Hynix expects demand for server products to expand due to new data center investments by global companies. Additionally, mobile demand is anticipated to remain high as 5G smartphone shipments, which had slowed due to COVID-19, increase. On the supply side, the company expects limited supply growth in the industry, which may not meet demand.

The NAND flash market is expected to recover from the second half of the year as the high inventory levels across the industry are resolved during the first half, supported by increased adoption of high-capacity mobile devices and strong SSD demand.

SK Hynix announced plans to actively respond to this demand environment while expanding the sales proportion of strategic products and strengthening technological leadership. Specifically, for DRAM, the company will increase the shipment ratio of high-value-added products such as HBM2E in line with the growth of high-performance computing and artificial intelligence (AI) system markets. For NAND flash, product diversification will proceed, including promoting customer certification for 128-layer server SSDs.

Furthermore, SK Hynix plans to produce the 10-nanometer class 4th generation (1A-nanometer) DRAM and 176-layer 4D NAND flash products within the year, which have improved productivity compared to existing products, to enhance cost competitiveness.

SK Hynix decided on a dividend of 1,170 KRW per share. The dividend per share was determined according to the existing dividend policy, which fixes a minimum amount of 1,000 KRW per share and adds 5% of the annual generated free cash flow.

Meanwhile, SK Hynix announced that it will fully implement its Financial Story starting this year. The company revealed its Financial Story vision last October, aiming for balanced growth of DRAM and NAND flash businesses and strengthening environmental, social, and governance (ESG) management to contribute to humanity and society.

First, the company plans to proceed smoothly with the acquisition of Intel’s NAND business division and actively build a foundation for future growth by fully operating the new M16 fab. From an ESG perspective, SK Hynix will establish an ESG Management Committee to discuss strategies for creating new opportunities in this field. Recently, SK Hynix expressed its commitment to strengthening ESG management by joining RE100 (a pledge to use 100% renewable energy by 2050) and issuing green bonds for eco-friendly business investments.

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