Telecom Companies Announce Midterm and Quarterly Dividends... SKT 830 Won, LGU+ 250 Won

Annual Dividend Per Share of Both Companies Expected to Rise Year-on-Year
KT to Pay Dividend Only at Year-End

The three major mobile carriers

[Asia Economy Reporter Cha Min-young] Except for KT, telecommunications companies have announced plans for increased interim and quarterly dividends compared to the previous year. As this year marks the fourth year of commercial 5G service, steady performance is expected, and with a stronger shareholder return policy, the dividend payout ratio of telecom companies is also on the rise.

According to the industry on the 28th, SK Telecom, which conducts quarterly dividends, will pay a dividend of 830 KRW per share. The dividend yield is about 1.55%, and the total dividend amount is approximately 181 billion KRW. The dividend record date is June 30, and the dividend payment is planned after the board resolution on July 28.

SK Telecom introduced quarterly dividends last year as part of a governance restructuring plan for transitioning to a holding company. Instead of interim dividends, quarterly dividends were newly established, paying dividends four times a year. In particular, expectations for dividend increases grew with SK Telecom’s split last year. In August 2021, SK Telecom officially announced a dividend policy for 2021-2023, deciding the total dividend amount within 30-40% of EBITDA-CAPEX (earnings before interest, taxes, depreciation, and amortization minus capital expenditures) based on separate financial results.

In this context, the confirmation of a quarterly dividend of 830 KRW per share has raised expectations. Hwang Sung-jin, a researcher at Heungkuk Securities, noted, "Considering the dividend policy stance, the annualized DPS is expected to be decided at a minimum of around 3,400 KRW." The 2021 dividend per share (DPS) was 2,660 KRW, implying a 27% increase this year.

LG Uplus decided on an interim dividend of 250 KRW per share in cash, a 25% increase from 200 KRW the previous year. The dividend yield rose by 0.6 percentage points to 1.9%. The total interim dividend amount for this year is about 107.5 billion KRW. The dividend record date is June 30, and the dividend payment is planned after the board resolution on July 28. An LG Uplus official stated, "The increase in interim dividends was decided to enhance shareholder value by improving dividend predictability for shareholders and meeting market expectations."

LG Uplus has been strengthening its shareholder return policy step-by-step since last year. For the first time since its founding, it repurchased about 100 billion KRW worth of treasury shares and introduced an interim dividend system last year, and this year it raised the dividend payout ratio from over 30% to over 40%.

Kim Hong-sik, a researcher at Hana Securities, said, "If 250 KRW per share is paid as a semi-annual dividend instead of 200 KRW in the first half, the DPS for this year is likely to be between 600 KRW and 650 KRW." He added, "This suggests that management expects operating profit for the second half and the full year of 2022 to increase compared to last year." The 2021 DPS was 550 KRW, and about a 10% growth is anticipated.

Meanwhile, KT, which does not have interim or quarterly dividends, only implements year-end dividends.

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