Posco Holdings, the holding unit of steel ginat Posco Group, on Monday announced a corporate value-up program, including an annual growth target of 6 to 8 percent and a return on invested capital of 6 to 9 percent over the next three years.
Under the plans to boost shareholder returns, the company said it will cancel 6 percent of its treasury shares for the next three years starting this year, and distribute a minimum cash dividend of 2.3 trillion won ($1.6 billion) during this period.
To achieve its growth target, Posco Holdings plans to expand investments in high-growth, high-profit areas within its flagship steel business. In the burgeoning battery materials business, it said it aims to secure high-quality resources in advance and pursue innovations in product and process technologies.
The company also intends to identify and develop new businesses aligned with its strategic values and growth potential to establish a foundation for sustainable development. The company is focused on improving capital efficiency by restructuring low ROIC assets and businesses while prioritizing growth investments in high ROIC areas.
As part of its medium-term plan, Posco Holdings will allocate 50 to 60 percent of its free cash flow for dividends, ensuring a base payout of 10,000 won per share and a minimum total distribution of 2.3 trillion won.
Earlier this year, it canceled 2 percent of its treasury shares and an additional 100 billion won worth, while distributing 7,500 won per share by the third quarter. The company is also refining its governance framework, improving the external director appointment process and enhancing ESG risk management.
On the same day, Posco International, the trading and energy arm of Posco Group, also announced its corporate and shareholder value enhancement plan to raise its shareholder return ratio to 50 percent from next year.
Posco International has set a target to achieve an average annual growth rate of over 8 percent in pre-tax profit while generating returns exceeding 8 percent on invested capital.
The company plans to expand aggressively in its energy and food businesses to strengthen market dominance. In its steel and mobility businesses, it aims to collaborate with Posco Group to create synergies and maximize profitability.
