SK Hynix Inc. announced today a new program on shareholder return for the 2025-27 period and the "Value Up" plan aimed at boosting corporate value.
According to the new shareholder return program, SK Hynix (or "the company", www.skhynix.com) will maintain the existing principle of allocating half of the accumulated free cash flow for resources for shareholder return, while raising the annual fixed dividend (minimum dividend per share that SK Hynix plans to pay out every year) by 25% to KRW1,500 a share from KRW1,200.
With the hike in the dividend, the total amount of the cash dividend is forecast to grow to KRW1 trillion annually.
The move is aimed at meeting the expectations of the shareholders who have helped SK Hynix overcome difficulties and challenges and advance to a leading global AI memory provider.
Despite the expected continuity of a volatile memory business, SK Hynix will make its utmost efforts to protect corporate value by pursuing a balance between shareholder return and financial soundness.
For this, the company established specific targets for financial soundness such as net cash and optimal cash level, while deciding to put aside 5% of the free cash flow for enhancement of the financial structure.
Net Cash: a company's cash balance after liabilities are subtracted
Optimal Cash Level: resources for annual investment aimed at preparing for future growth
SK Hynix plans to proceed with an additional return to shareholders within the extent that its finances are maintained sound if its financial targets are met until 2027 when the three-year program comes to an end. It will also review the possibility of an early return to shareholders prior to the expiration of the program if a better-than-expected business performance brings a meaningful increase in the level of free cash flow.
Separately, SK Hynix also introduced its "Value Up" initiative aimed at bringing corporate value a notch higher.
The Capex Discipline from the plan stipulates that the total amount of annual investment has to stay at an average mid-30% range, compared with the revenues to ease uncertainties of the future and enable quick decision-making in accordance with market conditions to eventually generate a stable flow of cash.
The two plans come at a time when SK Hynix prepares to make its leadership in the AI memory space more concrete by establishing a desirable technology roadmap for the future amid diversifying customer demands and an increasing portion of premium products in the full-fledged AI era.
Kim Woohyun, Vice President and Chief Financial Officer, said that SK Hynix's corporate value has risen sharply after successfully weathering a downturn amid growing optimism that it will report this year all-time high financial results well above those during a super cycle in 2018.
"Our goal is to promote the company's long-term prosperity together with our shareholders by carrying out the policies for shareholder return that matches the company's growth and stability of the financial structure," said Kim.
