LG Electronics to retire about $50 mn treasury stock in 2025

LG Electronics Inc. will retire 761,000 shares in 2025, or around 0.5% of its outstanding shares, to increase shareholder returns, the South Korean company said on Wednesday.

The treasury stock to be canceled is worth 70 billion won ($50 million) as of its Wednesday share price.

The announcement is a follow-up to its value-up program unveiled in October, under which it aims to grow its corporate value sevenfold by 2030. It targets annual sales growth of 7% by 2030, with an increase in the operating profit margin to 7%.

Including the treasury stock retirement, it will return more than 25% of consolidated net profits, excluding non-recurring gains, to shareholders in dividend payments from the business year of 2024 to 2026, LG said in a regulatory filing.

Currently, its dividend payout ratio is 20%.

Starting in 2024, for three years it will pay dividends twice a year that would amount to at least 1,000 won per share annually. This will increase predictability for its shareholders, LG added.

In October, it forecast consolidated sales to rise to 100 trillion won by 2030 from 84.2 trillion won in 2023.

To achieve the goals, the company will beef up subscription-based business and business-to-business services such as heat ventilation and air conditioning devices, automotive electronics products and smart factory systems.

The initial public offering of LG Electronics India Pvt. is part of its effort to boost the company’s enterprise value, LG added.

On Dec. 6, its wholly owned Indian unit filed a preliminary prospectus of its IPO, or a draft red herring prospectus (DRHP), with the Securities and Exchange Board of India.

Write to Yeonhee Kim at yhkim@hankyung.com

Jennifer Nicholson-Breen edited this article.