SK to Cancel Treasury Shares Worth 120 Billion Won

SK announced on the 30th that it held a board meeting and resolved to cancel all 695,626 treasury shares purchased last year.

This amounts to approximately 19.8 billion KRW based on the purchase price. It corresponds to 1% of the current market capitalization (about 11.6 trillion KRW).

Considering that about 280 billion KRW (5,000 KRW per share) was paid out as dividends to shareholders last year, SK effectively invested around 400 billion KRW in shareholder returns last year.

Repurchasing treasury shares improves profitability indicators such as earnings per share and return on equity, and increases the value per share.

Earlier, in March 2022, SK announced a shareholder return plan at the general meeting of shareholders to repurchase treasury shares equivalent to 1% of the market capitalization annually until 2025, including consideration of cancellation.

Accordingly, in August of the same year, SK announced a treasury share repurchase of about 200 billion KRW (950,000 shares, 1.3% of market capitalization), exceeding 1% of the market capitalization at that time (about 168.7 billion KRW), and canceled all of them in April the following year.

In October 2023, SK also signed a trust contract for treasury share repurchase worth about 120 billion KRW. Through this board resolution, all shares will be canceled early next month.

SK’s standalone dividend payout ratio also increased from 19% in 2020 to 51% in 2022. In 2023, SK paid the same dividend of 5,000 KRW per share as the previous year, resulting in a payout ratio exceeding 70%.

At last year’s general meeting of shareholders, SK amended its articles of incorporation to allow the board to decide the dividend record date, enabling investors to confirm the dividend amount first through the March regular general meeting and then decide on investment.