Hyundai Mobis to spend $6.7 bn in future mobility, hike shareholder return

South Korea’s largest auto parts maker Hyundai Mobis Co. plans to spend up to 8 trillion won ($6.7 billion) over the next three years on its future growth drivers such as auto chips, robotics and urban air mobility.

The auto parts unit of Hyundai Motor Group said on Tuesday it will also strive to enhance shareholder returns through an interim dividend payout, share buyback and cancellations.

Unveiling its 2022 corporate policy to promote shareholder value, the company said it will invest between 3 trillion won and 4 trillion won in its auto chips, software and autonomous driving businesses, including possible equity investments in related companies.

The remainder of the total 8 trillion won will be spent on facility expansion and upgrades for electric vehicle component production, it said.

Hyundai Mobis, which supplies parts to affiliates Hyundai Motor Co. and Kia Corp. as well as other global carmakers, has been strengthening its technological capabilities in electrification, autonomous vehicle and connected car segments to serve the diversified needs of automakers, while also looking into the urban air mobility (UAM) and robotics sectors.

At CES 2022 last month, the company showcased two future mobility concept cars via the metaverse – the M.Vision POP, an electric vehicle-based micro-mobility concept, and the M.Vision 2GO, an eco-friendly city delivery mobility vehicle.

TOTAL SHARE RETURN

The company said from this year, it is unveiling its shareholder value boosting measures based on a matrix called total shareholder return (TSR), a measure of financial performance, indicating the total amount an investor reaps from an investment – specifically equities or shares of stock.

Hyundai Mobis is the first among Hyundai Motor Group affiliates to use the TSR measurement to show its shareholder return policy.

The company said it will keep its 2022 dividend payout at a range of 20%-30% of its net profit, while maintaining its interim dividend policy.

It also said it will conduct 330 billion won worth of share buyback this year, of which 62.5 billion won in shares will be retired to boost shareholder value.

Over the past three years, Hyundai Mobis purchased a total of 1 trillion won in a share buyback scheme and paid out 1.1 trillion won in dividends.

To enhance its corporate management system, the company plans to appoint five professionals in various sectors of society, including Kim Hwa-jin, a Seoul National University School of Law professor and corporate governance expert, as outside directors.

Hyundai Mobis will hold a general annual meeting on March 23 to have its shareholder boosting measures approved by its shareholders.

Write to Hyung-Kyu Kim at khk@hankyung.com
In-Soo Nam edited this article.