South Korean home appliance maker Coway plans to double its dividend payout and cancel nearly 2 million treasury shares as part of an expanded shareholder return program running through 2027.
The company will increase its total shareholder return rate to 40% from 20%, while canceling about 1.89 million treasury shares, representing 2.56% of outstanding stock. The moves come as Coway looks to strengthen its financial position after earlier shareholder payouts strained its balance sheet.
The Seoul-based firm will cancel the shares this year and maintain the enhanced return rate for three years. Management indicated the 2023 dividend payment will more than double from the previous year, though specific figures weren’t disclosed.
Coway plans to detail additional value-creation initiatives in the first quarter. The company cited the need to balance shareholder returns with strategic investments and financial stability.
The appliance maker has posted six straight quarters with sales exceeding 1 trillion won ($767 million), showing improved performance since joining the Netmarble Group. This follows a period when aggressive shareholder returns had weakened its financial health by exceeding free cash flow.
A new capital allocation framework has helped restore the company’s financial footing, executives said.
