[비즈한국] Major construction companies listed on the stock market are heating up their efforts for shareholder returns. Samsung C&T028260, Hyundai E&C000720, DL E&C375500, and GS E&C006360 have all expanded their 2025 year-end dividend payouts, while Daewoo E&C047040, maintaining its 16-year tradition of no dividends, has opted to burn its treasury stocks instead. With the government's Corporate Value-up Program in full swing, the construction industry appears to have entered a competition for shareholder returns that combines both dividends and stock cancellations.
According to Bizhankook's analysis of each company's financial statements, the total 2025 year-end dividend payout for South Korea's five major construction companies reached 627.8 billion KRW, an increase of 86.3 billion KRW (16%) compared to the previous year. The breakdown by company is: Samsung C&T 458.3 billion KRW (+8%), Hyundai E&C 90 billion KRW (+33%), DL E&C 37.1 billion KRW (+61%), and GS E&C 42.4 billion KRW (+67%). Excluding Daewoo E&C, which did not pay dividends, all four construction companies increased their year-end dividend amounts.
GS E&C had the highest dividend payout ratio. Although the company's consolidated net profit attributable to controlling shareholders last year was 93.5 billion KRW, down 152 billion KRW (62%) from the previous year, it increased its dividend to 42.4 billion KRW, up 17 billion KRW (67%). The dividend payout ratio (dividends relative to net profit attributable to controlling shareholders) stood at 45%, a 35 percentage point increase. While a simple comparison for Hyundai E&C is difficult as they paid dividends after a year of losses, their 2025 payout ratio was recorded at 24%. Samsung C&T (19%) and DL E&C (10%) maintained the same payout ratios as the previous year.
A GS E&C official explained, "We changed our dividend policy to comply with the requirements for high-dividend companies and to strengthen shareholder returns. Moving forward, we will focus on enhancing medium- to long-term corporate value and securing investor trust rather than short-term performance."
Daewoo E&C, which continues its no-dividend policy, turned to treasury stock cancellation for shareholder returns. The company held a board meeting on the 4th and decided to cancel 4.715 million shares of its treasury stock. The scheduled cancellation date was the 18th, and the scale of the cancellation amounts to 42 billion KRW based on the closing price on the 3rd. Treasury stock cancellation refers to the act of eliminating shares held by the company. It is a representative shareholder return tool that increases the value per share by reducing the total number of outstanding shares. In the case of Daewoo E&C, it has not paid a year-end dividend for 16 years since its acquisition by the Korea Development Bank in 2010.
Daewoo E&C stated, "This treasury stock cancellation is a measure to substantially increase stock value by reducing the number of circulating shares and improving earnings per share. We expect an increase in value per share due to the decrease in the total number of issued shares, which is expected to lead to improved shareholder value."
The trend of strengthening shareholder returns among large construction firms aligns with the government's Corporate Value-up Program. The Financial Services Commission announced the 'Corporate Value-up Support Plan' in February 2024 and has been encouraging listed companies to disclose their corporate value enhancement plans. By the end of February this year, 181 companies have participated in the Value-up disclosure. Since the end of last year, the regulation has been strengthened to require listed companies holding more than 1% of total issued shares in treasury stock to disclose their holdings and handling plans twice a year, making the trend of expanded shareholder returns, including dividends and treasury stock cancellation, even more pronounced.
Meanwhile, the year-end dividend per common share for each construction company is 2,800 KRW for Samsung C&T (2,850 KRW for preferred shares), 800 KRW for Hyundai E&C (850 KRW for preferred shares), 890 KRW for DL E&C (940 KRW for preferred shares, 890 KRW for 2nd preferred shares), and 500 KRW for GS E&C. The dividend record dates are December 31 of last year for Samsung C&T, February 27 for GS E&C, and March 31 for Hyundai E&C and DL E&C. Shareholders holding company stock as of these dates are scheduled to receive the year-end dividends.