Firms cut dividend payouts on bad earnings

Korea`s listed companies have cut dividend payouts due to bad corporate earnings, industry data showed yesterday.

According to Fn Guide, a financial information provider, 31 companies have decided to reduce the amount of dividend payouts for the 2008 fiscal year by an average of 14. 38 percent from previous market estimates.

LG Electronics, which swung to its first net loss of 671.3 billion won ($487.2 million) in the fourth quarter due to steep decline in consumption, has decided to offer a dividend payout of 350 won per share, 64 percent lower than a market estimate of 969 won.

Companies offering lower-than-expected dividends include KCC, CJ Cheiljedang, Samsung Card, Samsung SDI, Samsung Electric, Credu and Hankook tire.

Only six firms - Cheil Worldwide, LG Household & Health Care, Samsung Engineering, CJ, Wooree ETI, Jeonbuk Bank - have decided to grant higher-than-expected dividends to shareholders.

The remaining 182 firms, which have not decided the amount of dividends yet, are likely to cut their 2008 dividends by 6.81 percent from a year ago, Fn Guide said.

Choi Chang-kyu, an analyst at Woori Investment & Securities, said the dividend cut resulted from the disappointing corporate earnings reports.

Liquidity-strapped banks and many other firms are expected to reduce dividends, he said.

The benchmark KOSPI shed 2.1 percent to hit below 1,100 at 1,093.4, on Friday as investors were worried over worsening corporate earnings.

By Kim Yoon-mi

(yoonmi@heraldm.com)