As Samsung Electronics Co. announced to pay more than 2 trillion won (US$1.79 billion) in interim dividends, it is expected to fulfill its pledge to pay a total of 10 trillion won (US$8.93 billion) in dividends this year alone.
Samsung Electronics announced on July 31 that its board of directors has decided to pay a quarterly cash dividend of 354 won per share. The total dividend payout is 2.4 trillion won (US$2.15 billion). The dividend record date is June 30 and the dividends will be paid on August 20. The dividend rates are 0.8 percent for common stocks and 0.9 percent for preferred stocks. The dividends are equivalent to 17,700 won (US$15.80) per share before the stock split.
Samsung Electronics’ interim dividend payout has significantly increased compared to last year. The total quarterly cash dividend payout last year was 965.3 billion won (US$861.88 million) but the figure has more than doubled this year. Samsung Electronics initially planned to pay 4.8 trillion won (US$4.29 billion) in dividends last year but it actually paid a total of 5.8 trillion won (US$5.18 billion) in dividends, which was about 50 percent of the company’s free cash flow (FCF). In addition, it announced to pay a total of 9.6 trillion won (US$8.57 billion) of dividends this year. The dividend payout for the second quarter is nearly a fourth of the total.
As expectations for Samsung Electronics’ expanded dividend payment are growing, its stock price, which has shown a downswing so far, is forecast to rebound. In particular, some market experts say that foreigners and institutional investors, who have strengthened a selling spree on Samsung Electronics shares after the stock split, are likely to begin to purchase the stock.
Meanwhile, Samsung Electronics announced on the 31st that its operating profits came to 14.87 trillion won (US$13.28 billion) in the second quarter this year, up 5.71 percent from a year earlier. However, the figure dropped 4.94 percent from the previous quarter, the first on-quarter decrease in seven quarters.
Samsung Electronics posted 58.48 trillion won (US$52.21 billion) in sales in the second quarter, down 4.1 percent from 61 trillion won (US$54.47 billion) at the same period last year. The company failed to maintain sales above the 60 trillion won (US$53.57 billion) mark, which had continued for four quarters in a row.