LG Corp. Decides to Cancel 250 Billion Won in Treasury Shares... Implements First Interim Dividend

All Remaining Treasury Shares to Be Cancelled by Next Year
Dividend Payout Ratio Raised, First Interim Dividend Announced
Subsidiary Stake Increases to Strengthen Earnings and Shareholder Value

LG Corp. will cancel about half of its treasury common shares as part of its efforts to enhance shareholder value.

On August 28, LG Corp. announced in a regulatory filing that it has decided to cancel 3,029,580 treasury shares acquired within the scope of distributable profits. The planned cancellation amount is approximately 250 billion won, based on the average acquisition price of about 82,520 won per share. This represents 1.93% of the total number of issued common shares, and the cancellation date is set for September 4.

LG Corp. logo. LG Corp.

The cancellation of treasury shares refers to the process by which a company eliminates its own shares, thereby reducing the total number of outstanding shares and increasing earnings per share (EPS). Previously, in April, LG Corp. completed the cancellation of 60,249 treasury shares, including 49,828 common shares and 10,421 preferred shares acquired as fractional shares during the spin-off process with LX Holdings. Following this cancellation, LG Corp. plans to cancel the remaining 3,029,581 treasury common shares in their entirety by 2026.

Additionally, LG Corp. decided to implement its first interim dividend, paying 1,000 won per share for both common and preferred shares. The record date for the dividend is September 12, and the payment is scheduled for September 26. The total interim dividend payout amounts to approximately 154.2 billion won. An official from LG Corp. stated, "Last year, we announced policies to enhance corporate value, including an increase in the dividend payout ratio and the introduction of interim dividends," adding, "By implementing these measures sequentially, we are building greater investor trust."

Specifically, the lower limit of the dividend payout ratio was raised from 50% to over 60% of net income based on a separate standard. Despite a decrease in net income earlier this year, the company maintained the same cash dividend as last year, resulting in a payout ratio of 76%.

LG Corp. also announced that it has completed the purchase of additional stakes in its subsidiaries to maintain stable management control and enhance its earnings structure. From November last year to March this year, the company acquired a total of 500 billion won worth of shares in LG Electronics and LG Chem. As a result, LG Corp.'s stake in LG Chem increased from 30.06% to 31.52%, and its stake in LG Electronics rose from 30.47% to 31.76%. A higher stake in subsidiaries leads to increased dividend income, which in turn can be returned to LG Corp. shareholders, creating a virtuous cycle.

In the long term, LG Corp. aims to raise its consolidated return on equity (ROE) to the 8-10% range by 2027. Return on equity is a profitability indicator calculated by dividing net income by total equity, showing how much profit a company generates with its own capital. LG Corp. plans to enhance future value by focusing investments on high-growth potential areas, such as the ABC fields (Artificial Intelligence, Bio, and Cleantech), which the group has identified as future growth engines.

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