Samsung Electronics and SK Hynix announced plans to expand shareholder returns in statements to Reuters on the 5th local time, with both companies targeting year-end for specific policy details. The expansion follows record cash generation from the AI memory boom, with Samsung Electronics reporting approximately 146 trillion won in operating profit for the first half and SK Hynix approximately 98 trillion won. Both companies plan to maintain financial health while returning 50% of free cash flow to shareholders.
Samsung Electronics and SK Hynix Announce Shareholder Return Expansion to Reuters
Samsung Electronics stated to Reuters: "We continue to focus on maintaining a sound financial structure to manage cyclical risks and secure funding for growth initiatives, while also exploring ways to expand shareholder returns in a sustainable manner."
SK Hynix stated to Reuters in a separate statement that it is preparing a specific shareholder return plan by year-end and expects "to expand shareholder returns to a meaningful level." The company added: "Based on record-level cash generation capability, we believe we can expand shareholder returns to a meaningful level while maintaining investment and financial soundness. We are reviewing various options for additional shareholder returns."
Samsung Electronics had previously stated on the 30th of last month during its second quarter earnings announcement that "the board and management are actively discussing specific implementation plans for shareholder return policies, including special dividends this year, and the next shareholder return policy." SK Hynix had also previously stated it is reviewing additional shareholder returns through various methods.
Companies Report Record First Half Operating Profits
Samsung Electronics recorded approximately 146 trillion won in operating profit for the first half of this year, while SK Hynix recorded approximately 98 trillion won. Both companies achieved record operating profits for the second quarter, driven by expanded AI demand centered on high bandwidth memory (HBM).
Securities firms estimate Samsung Electronics' free cash flow (FCF) for this year will reach approximately 200 trillion won, with SK Hynix expected to reach the mid-100 trillion won range.
Both Companies Target 50% Free Cash Flow Return Policy
Samsung Electronics and SK Hynix plan to allocate 50% of FCF to shareholder returns. Samsung Electronics had previously announced a three-year shareholder return policy from 2024 to 2026, returning 50% of free cash flow and paying annual dividends of 9.8 trillion won.
SK Hynix is pursuing investment expansion and shareholder value enhancement with a goal of achieving "net cash of 100 trillion won."
FAQ
What did Samsung Electronics and SK Hynix announce to Reuters on the 5th?
Both companies announced plans to expand shareholder returns, with specific policy details to be prepared by year-end. Samsung stated it is exploring ways to expand returns in a sustainable manner while maintaining financial soundness, and SK Hynix stated it expects to expand returns to a meaningful level.
How much operating profit did Samsung Electronics and SK Hynix report for the first half?
Samsung Electronics reported approximately 146 trillion won in operating profit for the first half, while SK Hynix reported approximately 98 trillion won. Both companies achieved record second quarter operating profits driven by AI memory demand.
What is the shareholder return policy both companies are targeting?
Both Samsung Electronics and SK Hynix plan to return 50% of free cash flow (FCF) to shareholders. Samsung's 2024-2026 policy includes returning 50% of FCF and paying annual dividends of 9.8 trillion won, while SK Hynix is reviewing various options for additional shareholder returns.
