Announcement of New Shareholder Return Policy and Value-Up Plan
SK Hynix has decided to increase its fixed annual dividend per share by 25% by 2027. The company plans to enhance shareholder returns in line with its growth trajectory and establish a stable financial structure.
SK Hynix recorded all-time high sales, operating profit, and net profit in the third quarter of 2024, driven by high-bandwidth memory and HBM effects. Photo by Jinhyung Kang, SK Hynix headquarters, Icheon, Gyeonggi, on the 25th.
On the 27th, SK Hynix announced a new shareholder return policy and value-up plan to be applied over the next three years starting next year.
SK Hynix will maintain its policy of allocating 50% of cumulative free cash flow (FCF) as a source for shareholder returns, but will raise the fixed annual dividend per share from the current 1,200 KRW to 1,500 KRW, a 25% increase. SK Hynix explained, "By increasing the fixed dividend, we expect the annual cash dividend amount to expand to around 1 trillion KRW."
SK Hynix stated that it plans to pursue a balanced approach between shareholder returns and strengthening financial soundness to maintain corporate value even amid fluctuations in the memory market. The company set specific financial soundness goals, including achieving net cash and securing appropriate cash reserves. To this end, 5% of the annual FCF will be prioritized for strengthening the financial structure. Net cash means holding more cash than debt, and appropriate cash refers to annual investment funds prepared for future growth investments.
If the targets are achieved by 2027, SK Hynix plans to proceed with additional returns within the scope of maintaining financial soundness. The company added, "If FCF significantly increases due to strong business performance, we will consider early additional returns even before the policy expires."
They also announced an 'Investment Principle.' The annual investment scale was specified at an average mid-30% level relative to sales. SK Hynix said, "This will help reduce future uncertainties, enable swift decision-making in response to market changes, and contribute to generating stable cash flow."
With the AI era fully underway, customer demands are diversifying and the share of premium products is increasing. SK Hynix plans to build a future technology roadmap aligned with this trend to further solidify its leadership in the AI memory market.
Kim Woo-hyun, Vice President and Chief Financial Officer (CFO) of SK Hynix, said, "This year, we expect record-breaking performance surpassing the boom in early 2018, and corporate value has risen significantly. We aim to pursue long-term growth by implementing policies that maintain stable financial structures along with shareholder returns that match the company’s growth."
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