SEOUL, Dec. 22 (Korea Bizwire) — Dividend payouts by listed companies may shrink from a year earlier in 2019 due to a sharp drop in their earnings, market watchers here noted Sunday.
The combined net profit of 235 listed firms that paid dividends last year is expected to plunge more than 29 percent to about 92.1 trillion won (US$79.3 billion) from 129.8 trillion won in 2018, according to market researcher FN Guide.
Dividend payouts by local businesses have been on a steady increase since 2015, reaching a record high of 31.9 trillion last year.
Local analysts noted the companies may simply be unable to expand their dividend payments.
“The market consensus for dividend payouts by KOSPI 200 firms is at 27.7 trillion won, up 3.6 percent from last year, but the consensus for their combined net profit is at 83 trillion won, down 33.0 percent on-year,” Eugene Investment analyst Kim Dong-wan said.
“Whether the companies will maintain their cash payouts at a similar level from previous years remains questionable when their net profits are estimated to fall more than 30 percent from a year earlier,” the analyst added.
Others, however, believe the local firms may continue to increase their dividend payouts amid strong investor demands to share profits.
According to FN Guide, the dividend per share (DPS) of the 235 listed firms that issued dividends in 2018 is estimated to reach 1,383 won this year, up 2.37 percent from the average DPS of 1,351 won last year.
Also, 58 listed firms here have already issued some 9.3 trillion won in interim or quarterly dividend payouts, compared with 9.1 trillion won in 2018, according to the Financial Supervisory Service.
Local analysts believe the overall dividend payouts this year may reach a new high of 32.7 trillion won should local companies maintain their year-end dividend payout ratio at least at the same rate of last year.