Daewon Pharmaceutical (003220) has decided to pay a cash dividend despite swinging to a net loss last year, maintaining its shareholder return policy amid weak earnings.
The company announced Thursday that its board approved a cash dividend of 250 won per common share. The dividend yield stands at 2.05%, with total payout reaching approximately 5.36 billion won.
According to previously disclosed preliminary results, consolidated operating profit plunged 87.8% year-on-year to 3.43 billion won from 28.22 billion won. Net income swung to a loss of 4.4 billion won from a profit of 9.04 billion won in the prior year.
The company attributed the earnings decline to rising production costs and increased R&D expenses. Revenue edged up just 1.2% year-on-year to 605.6 billion won.
Daewon Pharmaceutical said the decision prioritizes long-term shareholder trust over short-term results. A company official explained, "Despite swinging to a loss last year, we chose to maintain the dividend policy we have upheld until now."
An industry observer noted, "Maintaining dividends amid weak performance can be a choice to honor commitments and trust with shareholders." However, the observer cautioned, "Continuing dividends while in the red could undermine future competitiveness."