S. Korean firms' 2014 dividend payouts rise 30 pct

By Kim Eun-jung

SEOUL, March 4 (Yonhap) -- South Korean firms expanded their dividend payouts for 2014 by almost 30 percent compared with the previous year, coming under growing pressure to give back more to shareholders, data showed Wednesday.

The combined amount of dividends paid out by 714 listed firms on the main KOSPI and secondary KOSDAQ markets totaled 14.14 trillion won (US$12.83 billion) for fiscal 2014, up 29.3 percent from a year earlier, according to data compiled by the bourse operator Korea Exchange (KRX).

A total of 617 companies delivered dividends for the second consecutive year, with 311 offering bigger returns compared with 2013, the bourse operator said.

The top 45 companies led the rise by paying a combined 8.8 trillion won, accounting for 70 percent of the dividend payouts on the main KOSPI market, it said.

Samsung Electronics Co., the nation's largest firm by market value, delivered 2.92 trillion won to investors, up 40.5 percent on-year, despite its sluggish earnings in its smartphone business.

Dividend payouts by Hyundai Motor Co., the top automaker whose shares suffered a deep loss following a pricy land deal in September, jumped 53 percent on-year to 817.3 billion won.

"The rise in dividend payouts comes as companies stepped up efforts to boost shareholder value in light of the rising investor interest and the government's push for dividend payouts expansion," the KRX said. "We will encourage companies to pay more dividends and work with brokerage houses to develop a wide range of financial instruments related to dividends."

The government has been pressing leading firms to give back more to investors by passing a revised tax code to tax corporate cash reserves that are in excess of a certain amount in a broader effort to encourage companies to spend more on wages, dividends and investment.

Korean companies have been stingy in paying dividends, a key reason why South Korean stocks are undervalued, with the dividend payout ratio standing at 22.4 percent, far below the average of 47.7 percent of other countries, according to the KRX.

ejkim@yna.co.kr
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