Three-year shareholder return policy announced

Board approves 10 billion won buyback

The corporate identity logo of Daehan Shipbuilding. [Provided by Daehan Shipbuilding]
The corporate identity logo of Daehan Shipbuilding. [Provided by Daehan Shipbuilding]

Daehan Shipbuilding will return more than 30 percent of its consolidated net profit for the period to shareholders each year over the next three years.

The shipbuilder disclosed Tuesday that it has established a medium- to long-term policy to allocate at least 30 percent of its annual consolidated net profit for the period to shareholder returns from 2027 through 2029.

The shareholder return amounts will be calculated based on consolidated net profit for the period for each fiscal year from 2026 to 2028, excluding one-time gains and losses.

Returns will be delivered through a combination of cash dividends and share buybacks and cancellations. The company plans to use cash dividends to directly distribute profits to shareholders while pursuing share buybacks and cancellations to enhance per-share value.

Since its listing in August last year, Daehan Shipbuilding has already taken steps to reward shareholders — in March this year, it carried out a 40 billion won ($29.5 million) share buyback and cancellation and paid 9.6 billion won in cash dividends.

The company said the disclosure is intended to move away from a short-term approach of determining return amounts based on individual years' earnings, and instead to publicly commit in advance to shareholder return principles and targets for the next three years, improving predictability for investors.

The board also approved and disclosed a separate 10 billion won share buyback Tuesday, aimed at addressing the undervaluation of the company stemming from a share price decline amid capital market uncertainty and at enhancing shareholder value.

All shares acquired through the buyback are set to be cancelled upon completion, with a share buyback trust agreement taking effect Nov. 16.

With the three-year policy committing to returns of at least 30 percent, additional share buyback and cancellation plans as well as cash dividend amounts are expected to be announced following each year's financial settlement.

Through this policy, Daehan Shipbuilding aims to build a virtuous cycle in which stable profit generation and expanded shareholder returns reinforce each other.

However, the specific scale of shareholder returns for each year, as well as the breakdown between cash dividends and share buybacks and cancellations, will be determined annually after the close of each fiscal year, taking into account overall business performance, investment plans, cash flow and non-recurring factors, subject to approval by the board or a general shareholders meeting.


keg@heraldcorp.com