Major companies not paying interim dividendsMajor dividend-paying firms in Korea have decided not to pay interim dividends this year due to tumbling earnings amid the coronavirus pandemic, industry sources said Thursday.
S-Oil, a major oil refiner known for paying high dividends, has decided to skip interim dividends this summer because of worsening results caused by Covid-19.
S-Oil, which had paid interim and regular dividends each year since 2000, posted a record operating loss of more than 1 trillion won ($842 million) in the first quarter of the year.
Saudi Aramco, the world's largest oil company, currently controls S-Oil with a 63.41 percent stake.
SK Innovation, Korea's top oil refiner, has also decided not to pay shareholders interim dividends this year, snapping a three-year paying streak.
In the January-March period, its pretax loss came to nearly 2 trillion won, the worst quarterly results in its history.
Oil refiners are not alone. Hyundai Motor and Hyundai Mobis didn't pay interim dividends, citing worsening business conditions and uncertainty.
Doosan Corporation, another high-dividend company in Korea, has scrapped a plan to pay interim dividends this summer due to a cash crisis.
With dividend stocks falling out of favor with investors, high-dividend companies have seen their share prices tumble this year.
Shares in S-Oil closed at 58,600 won ($49.4) on the main bourse Thursday, down a whopping 38.5 percent from the end of last year.
Doosan shares plunged nearly 40 percent over the cited period, with Hyundai Heavy Industries Holdings and other major high dividend stocks falling at double-digit rates.
Their dismal price plunges contrast with a 7.81 percent increase in the benchmark Kospi this year and a near 26 percent surge in the price index of the tech-heavy Kosdaq market.
Korean investors have rushed to pull their money out of funds focused on high-dividend companies.
Customer deposits at 268 local dividend funds with assets of 1 billion won amounted to 10.8 trillion won as of Wednesday, down nearly 2 trillion won from the start of the year, according to financial information provider FnGuide.
The average return rate of those dividend funds stood at minus 1.89 percent over the cited period.
More in Industry
Korea Shipbuilding signs ￦87.5 billion deal to build LPG carrier
DMI to develop drone-based marine charting system
Graft regulations eased to allow for more expensive gifts
Hanwha is first Rolls-Royce supplier permitted to handle quality control
Live commerce, perfect for the pandemic, is all the rage