LG to buy back $398 mn of its own shares

The conglomerate pledged to increase shareholder value with more flexibility in securing dividend sources

LG headquarters in Seoul
LG headquarters in Seoul
Shin-Young Park 1
2022-05-29 12:05:59 nyusos@hankyung.com
Shareholder value

South Korean conglomerate LG Corp., known as LG Group, announced on May 27 that it will buy back 500 billion won ($398.1 million) of its own shares by end-2024. The holding company said it will entrust Korea’s KB Securities Co. with the share buyback.    

The conglomerate also announced its updated plan for investor dividends.

In 2020, the company decided to distribute more than 50% of its net profit on the basis of separate financial statements, within the range of the dividend income the company earns from investments.

On Friday, LG said it will keep the distribution policy regardless of the range of dividend income. This is to increase flexibility in securing dividend sources even if there are temporary changes in its subsidiaries’ earnings, LG added.   

Over the past three years, LG has distributed more than 60% of its net profit, except one-off revenue, on a separate financial statement basis. It also distributed 448.9 billion won early this year, 65% of 2021's net profit, to shareholders.

The company pledged to increase shareholder value by expanding distribution, as well as invest in new businesses and build a base of sustainable growth, an LG official said. This aligns with the updated dividend policy, which is to improve transparency on dividend payments as part of the company’s environmental, social and governance (ESG) efforts.

LG shares closed at 74,700 won on Friday with a 0.95% rise. The stock's 52-week high was 122,500 won on May 27, 2021.

Write to Shin-Young Park at nyusos@hankyung.com
Jihyun Kim edited this article.
#LG #share buyback #shareholder value #chaebol #dividend #Korean conglomerate

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