"Separate Standards for Surviving Company After Split
30~40% of EBITDA-CapEx"
Introduction of Midterm Dividend in Q2... 2,500 Won per Share
[Asia Economy Reporter Cha Min-young] SK Telecom, which is aiming to maximize shareholder value through a spin-off this year, has unveiled a new dividend policy. However, the total dividend amount is expected to remain similar to last year.
On the 11th, SK Telecom announced through a disclosure that "the total dividend amount will be determined within 30-40% of EBITDA-CapEx based on the separate performance of the surviving company after the spin-off." This means that a portion of the amount remaining after deducting capital expenditures (CapEx) from earnings before interest, taxes, depreciation, and amortization (EBITDA) will be paid as dividends.
The total dividend amount this year is estimated to be similar to last year, so the dividend per share is expected to remain at 10,000 KRW. SK Telecom paid dividends of 718.7 billion KRW in 2019 and 742.1 billion KRW in 2020. The financial investment industry had predicted dividends around 700 billion KRW for 2021.
Analyst A said, "Since about 70% of profits have already been paid out as dividends, there does not seem to be much incentive to increase them further," adding, "The possibility of dividends rising above 10,000 KRW appears limited."
The company also declared that this year's dividends would be at a similar level to last year. Yoon Poong-young, SK Telecom’s Chief Financial Officer (CFO), stated during the first-quarter earnings conference call, "We will firmly maintain a shareholder-friendly management stance even after the spin-off," and added, "For the surviving company, regardless of the spin-off, we will maintain at least last year's total dividend amount this year."
SK Telecom’s spin-off will be finalized within the year after the shareholders' meeting on October 12. The spin-off date is November 1, and the date for the change of listing and re-listing is scheduled for November 29. After the spin-off, the surviving company SK Telecom will include SK Broadband, SK Telink, PS&Marketing, F&U Credit Information, ServiceTop, ServiceAce, and SK O&S. The newly established investment company will include subsidiaries focused on semiconductor and ICT innovation technologies.
Meanwhile, SK Telecom has also completed the cancellation of 8.69 million treasury shares worth 2.6 trillion KRW to enhance shareholder value. This accounts for 10.8% of the total issued shares. Starting from the second quarter of this year, a new interim dividend of 2,500 KRW per share (with a dividend yield of 0.77%) will be introduced.
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