Nexon, listed on the Japanese stock market, unveiled a special dividend of about 3 trillion won, sending its share price soaring to the daily limit.
On the 13th, Nexon disclosed a special dividend of 415 yen per share. Adding the regular dividends of 60 yen, this year's payout comes to 475 yen per share, up about 956% from last year's 45 yen. Based on the share price of 2,520 yen at the time of the announcement, the dividend yield is about 19%.
On the 14th, when the news broke, Nexon closed at the upper limit of 3,022 yen on the Tokyo market. In after-hours trading, it jumped to 3,580 yen. With buy orders piling in and a lack of sell orders, volume stayed at about one-quarter of normal. According to Nikkei CNBC, Nexon ranked fifth in contribution to gains on the Nikkei 225 that day.
Earnings also beat market expectations. Nexon's second-quarter revenue came in at 121.1 billion yen, operating profit at 31.3 billion yen, and net profit at 29.6 billion yen. First-half revenue of 273.3 billion yen, operating profit of 89.4 billion yen, and net profit of 86.9 billion yen are the highest ever for a half-year. Revenue from "MapleStory" rose 63% from a year earlier, and cumulative sales of "ARC Raiders" surpassed 16.3 million units.
The funds for the special dividend were prepared by Korean subsidiary Nexon Korea. Nexon Korea recently paid an interim dividend of 3.57 trillion won to the Japan headquarters. Separately, Nexon completed a 30 billion yen share buyback and will cancel 1.7% of its outstanding shares on the 31st.
At the end of the second quarter, Nexon held 842 billion yen in cash and cash equivalents. The company expected to maintain about 500 billion yen in cash even after the special dividend. Including this payout, cumulative shareholder returns since its Tokyo listing in 2011 are projected to exceed 900 billion yen by year-end. Nexon also set a goal of spending at least 33% of the prior year's operating profit on dividends and share buybacks, and raising its return on equity (ROE) to 15% over the medium to long term.
However, the special dividend is scheduled to be paid once to shareholders of record at the end of September, following board approval that month. It does not mean 475 yen per share will be paid every year, and there is a possibility of an ex-dividend adjustment in which the share price is reduced by the dividend amount after the record date.