By Park Jin-hai
Hyundai Motor, the nation’s largest automaker, will deliver a 1,000 won midterm dividend per share to boost shareholder profits this year.
The total payout is 268.6 billion won.
Previously, Hyundai pledged to increase dividends as well as return profits in the midterm as part of its shareholder-friendly policy, after investors turned their backs on the company's controversial 10.5-trillion land purchase from KEPCO.
It is the first time Hyundai has returned profits in the midterm.
The company approved the dividend payment at an emergency board of directors' meeting Thursday morning.
Shareholders as of June 30 will be entitled to the dividend.
Under the Korean Capital Market Act, the payment of midterm dividends should be completed within 20 days of the decision, thus it is projected to be completed by mid-August.
“We will continue to increase the dividends,” Lee Won hee, the carmaker's chief financial officer, said. “We plan to up our dividend to 15 percent in the short term, and to 25-30 percent, the global automotive companies’ average, in the long run.”
Hyundai Motor expanded dividends to 3,000 won last year for its 2014 result, up 54 percent from 1,950 won a year earlier, in a move to boost shareholder returns.
The company reported that operating profit dropped 16.1 percent year-on-year to 1.75 trillion won in the second quarter. Operating profit was below the consensus estimated at 1.78 trillion won.
Sales during the period inched up 0.3 percent to 22.82 trillion won, the company said.
Hyundai Motor sold 1.23 million cars during the second quarter, down 2.8 percent from a year earlier. Its first-half cumulative sales also fell 3.2 percent year-on-year to 2.42 million.
During the first half of the year, net profit fell 13.8 percent to 3.77 trillion won. Its first-half operating profit shrank 17.1 percent to 3.34 trillion won, with sales retreating 1.4 percent to 43.76 trillion won.
"First-half earnings dropped as the won appreciated markedly against the euro and other currencies, along with stronger competition than the year before," the company said.
The announcement of the unprecedented midterm dividend offset its sales performance, pushing up its share price. Hyundai Motor gained 5.34 percent, or 7,000 won, to close at 138,000 won.
During the day it neared 140,000 won, the highest in a month.