Korea Inc. ups dividend payouts despite falling net income

South Korean companies listed on the main bourse Kospi raised their dividend payouts between 2021 and 2023 despite falling net income in the same period, a report said.

The dividend payout ratio, the total dividends to shareholders relative to net income, amounted to 39.9% last year from 36.1% in 2022 and 31.3% in 2021, according to a report by the Korea Listed Companies Association earlier this week.

A total of 558 firms, or some 70% of those listed on the Kospi, paid out dividends last year, which amounted to 41.16 trillion won ($30.1 billion). The annual dividend payout from Kospi-listed firms increased 3.3% last year and 0.6% in 2022.

Compared with that, the firms that paid dividends saw their annual net income decrease 6.3% last year and 13.0% in 2022.

“The Kospi-listed companies distributed steady dividends to their stakeholders despite falling net profit amid the economic downturn,” the association’s economic research team head Moon Jong-yeol told The Korea Economic Daily.

A total of 454 firms on the Kospi paid their dividends for five consecutive years as of last year. Their annual net profit on average reached 203 billion won, 9.6% higher than the 558 companies that paid dividends last year.

The Kospi-listed companies' dividend-price ratio, the dividend per share divided by the price per share, rose 0.06 percentage point to 2.97% for common shares last year. The ratio increased by 0.23 percentage point to 3.5% for preferred stocks.

A growing number of Kospi-listed firms pay interim dividends, which they pay before releasing their annual financial statement.

A total of 72 Kospi-listed companies distributed 13.71 trillion won of interim dividends last year. The number of such companies increased 12.5% on-year in 2023 and 39.1% on-year in 2022, while interim dividend payouts rose 7.6% and 18.4%, respectively.

Write to See-Eun Lee at see@hankyung.com
Jihyun Kim edited this article.