[Asia Economy Reporter Suyeon Woo] Hyundai Mobis announced on the 14th that it will repurchase its own shares worth 150 billion KRW and pay a dividend of 4,000 KRW per share.
On the same day, Hyundai Mobis announced its shareholder value enhancement policy for this year. Hyundai Mobis revealed its cash usage plan for investing in future growth over the next three years. It will invest 5 to 6 trillion KRW, about 2 trillion KRW more than the previous plan, in internal investments to secure competitiveness in electrification and core components. Additionally, it plans to invest 3 to 4 trillion KRW in external investments such as autonomous driving, ADAS (Advanced Driver Assistance Systems), and software. Furthermore, it aims to secure 5 trillion KRW in safe cash reserves to respond to economic downturns and crises.
Hyundai Mobis will continue its policy of maximizing shareholder value through investments for future growth and shareholder returns. By investing in future mobility sectors such as software and semiconductors, it plans to boost its stock price in the mid to long term while flexibly operating shareholder return policies such as dividends, share repurchases, and cancellations.
The core of the future growth strategy is summarized as proactive investments to strengthen internal and external competitiveness. It will continue research and development to enhance core component competitiveness and expand orders targeting global manufacturers. This is to respond to the future mobility market, including electrification and electronic products, and to strengthen its position as a global business operator by increasing sales outside the group.
In addition, Hyundai Mobis plans to actively engage in external investments such as strategic mergers and acquisitions and partnerships to secure core future mobility technologies in areas like autonomous driving and software. It will also simultaneously discover and invest in long-term new growth businesses such as AAM (Advanced Air Mobility) and robotics based on Hyundai Mobis’s innovative technologies.
This year’s dividend will be flexibly operated at a payout ratio of 20-30% based on net income excluding equity method gains. The payout ratio is an indicator of how much of the net income is distributed to shareholders as dividends. The currently implemented interim dividend will also be maintained. Hyundai Mobis will repurchase its own shares worth 150 billion KRW this year and cancel all repurchased shares. However, considering the need for funds such as large-scale electrification investments in the North American region, the scale of share repurchases will be flexibly adjusted on an annual basis, following last year’s approach.
Since announcing its three-year mid- to long-term shareholder return policy in 2019, Hyundai Mobis has faithfully implemented shareholder return policies totaling 2.6 trillion KRW. Since last year, it has shifted to annual implementation, repurchasing treasury shares worth 313.2 billion KRW and canceling treasury shares worth approximately 62.5 billion KRW that it already held.
Hyundai Mobis also presented a new board of directors composition plan. At the board meeting held on the same day, it resolved to reappoint Chairman Chung Euisun of Hyundai Motor Group as an inside director and reappoint Jang Young-woo as an outside director. It also newly recommended James Kim, Chairman of the American Chamber of Commerce in Korea, as an outside director specializing in industrial management. Chairman Kim is a former executive who has served as a representative of global companies such as Korea GM, Microsoft Korea, and Yahoo Korea, and is an expert in mobility and software. The board appointments will be finalized at the shareholders’ meeting scheduled for March.
Accordingly, the Hyundai Mobis board will consist of a total of five outside directors emphasizing diversity, expertise, and independence. Currently, Hyundai Mobis’s outside directors include Professor Kim Dae-soo of Korea University’s Business Administration Department (logistics and risk), Professor Kim Hwa-jin of Seoul National University Law School (governance and ESG), Jang Young-woo, former head of UBS Securities Seoul Branch (shareholder-nominated outside director, finance and accounting, industry), and Professor Kang Jin-ah of Seoul National University College of Engineering (management and strategy), representing experts from various fields.
Meanwhile, Hyundai Mobis plans to approve a dividend of 4,000 KRW per share, including the interim dividend, at the regular shareholders’ meeting to be held on the 22nd of next month, the same as last year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
