LG Electronics said Friday it will commit a total of 200 billion won ($143 million) to shareholder returns over the next two years, and retire all remaining treasury shares after approval at next year’s annual general shareholders' meeting.
The announcement came as part of the company’s disclosure on the progress of its value enhancement plan unveiled last year. LG said the update is intended to keep the market informed of how the plan is being executed.
Under the new commitment, the company said it will determine the method and timing of the 200 billion won payout through board meetings in the future. It also plans to cancel all remaining treasury shares -- 1,749 common shares and 4,693 preferred shares -- next year. In July, LG Electronics retired 761,000 treasury shares under its previously announced return program.
"We will continue to pursue a consistent shareholder value strategy that strikes the optimal balance between shareholder returns and growth investment from a mid- to long-term perspective," LG Electronics said.
The company also provided updates on its medium-to-long-term financial targets. Cumulative revenue for the January-September period edged up 0.5 percent on-year to 65.3 trillion won, while its operating margin fell 1.1 percentage points to 4 percent.
Return on equity reached 8.3 percent, up 6.5 percentage points from the end of last year, while its debt ratio and net-borrowing ratio dropped by 10 and 8 percentage points, respectively.
LG said the improvements stem from tighter cost controls and more efficient working-capital management.
LG Electronics also announced plans to establish a new compensation committee under the board, chaired by an outside director, to strengthen transparency and fairness in executive pay and reinforce its corporate governance framework.
herim@heraldcorp.com
