Hanssem(009240)'s net profit earned in the first half of this year is 7.4 billion won. The dividends paid to shareholders are 24.6 billion won. That is more than three times what it earned. Of that, 12.5 billion won went to IMM Private Equity (IMM PE), the private equity firm that is the largest shareholder.
On the 14th, Hanssem's semiannual report filed in a disclosure shows first-half consolidation revenue fell 9.5% to 816.7 billion won, and net profit plunged 82.3% to 7.4 billion won from 41.7 billion won. The payout ratio listed in the report (dividends as a share of net profit) is 333.2%. Hanssem skipped dividends last year, citing liquidity needs amid high interest rates and a property slump, but has resumed dividends under difficult conditions.
Half of the dividends go to the largest shareholder. IMM PE bought a 27.7% equity stake from founder Cho Chang-geol, the former honorary chairman, for 1.4513 trillion won in Dec. 2021 and became the top shareholder in Jan. the following year, then acquired additional shares through a tender offer by spending 100 billion won in Mar. 2023. In the semiannual report, the stakes of Heim, Heim No. 1, and Heim No. 2 limited companies set up by IMM PE total 35.44%. As dividends are not paid on 30.2% treasury shares, the actual share of outstanding shares eligible for dividends (16,426,322 shares) is 50.77%. Of the 24.6 billion won, 12.5 billion won goes to them.
IMM PE's math is complicated. The average acquisition cost reflecting the tender offer is in the 180,000 won per-share range. The current share price is in the 30,000 won range, about one-sixth. As the real estate recovery is delayed, revenue fell 22% from 2.2312 trillion won in 2021 to 1.7445 trillion won last year. The 850 billion won acquisition financing raised during the takeover comes due at the end of this year.
The slump in the core business is dragging on. Since CEO Kim Yu-jin, who came from IMM PE, took office, Hanssem's profits have been generated by asset sales such as the Sangam headquarters in Seoul (320 billion won) and the "Hanssem No. 1 store" Bangbae Design Park (39 billion won), and by cutting expenses such as salaries and employee benefits. With no assets sold in the first half, other income shrank 90% from 49.3 billion won to 4.8 billion won. This is seen as the reason net profit plunged even though operating profit rose 145.6% to 21.4 billion won.
B2B (business-to-business) revenue from handling special sales for builders fell 31.1% from 226.1 billion won to 155.7 billion won, swinging to a 2.5 billion won loss. Excluding Rehaus (+7.8%), both home furnishing (-2.8%) and other (-18.0%) retreated.
Yoo Hyo-sang, head of the Unicorn Management and Economics Research Institute, said, "As the market environment worsened and an immediate exit (recovery of investment) became difficult, it appears they first sought to recover part of the principal through dividends and slim down to facilitate a future sale." Hanssem said, "To enhance shareholder value, the company is paying second-quarter dividends and has signed a 50 billion won trust agreement to acquire treasury shares, proceeding with a share buyback," adding, "This follows the mid- to long-term shareholder return policy released in June."