Celltrion Group said on the 11th that its boards of directors finalized this year's dividends plans for Celltrion and Celltrion Pharm. The dividends will be finalized after a vote at the regular shareholders meeting next year, with Dec. 31 as the record date.
Celltrion will pay cash dividends of 750 won per common share. The total dividends amount to about 164 billion won, the largest ever. The dividends size was calculated based on about 218.61 million shares, excluding about 12.35 million treasury shares from the total number of issued shares (about 230.96 million). The company said it decided on the largest-ever dividends to strengthen shareholder returns despite large-scale investments, including the acquisition of U.S. production facilities this year.
This dividends also reflect the securing of tax-exempt dividends resources and the effect of a bonus issue. In Mar., Celltrion converted about 620 billion won of capital reserve into retained earnings to secure tax-exempt resources for a reduction dividends. A company official said, "Accordingly, shareholders are exempt from the 15.4% dividend income tax, increasing the net amount received," and added, "In addition, with the bonus issue of 0.04 shares per share carried out in May, an approximately 4% stock dividends effect is added, and including this, the actual dividends for shareholders who held shares increases further."
Since the beginning of this year, Celltrion has continuously bought back and canceled its own shares. It purchased a total of 844.2 billion won. At the group level, purchases of Celltrion shares totaled 1.9 trillion won. The amount of treasury shares canceled is 900 billion won. A company official said, "Adding this cash dividends, annual shareholder-return resources come to about 1 trillion won," and explained, "Including share buybacks, about 2 trillion won has been put in."
With these measures, Celltrion's shareholder return rate for the year is expected to expand significantly. Taking into account share buybacks and cancellations, bonus issues, and other factors comprehensively, it is expected to far exceed the three-year average target (40%) through 2027 presented at the start of the year under the "Value-up Program." The company plans to continue tax-exempt dividends and cash dividends to bolster shareholder value.
Celltrion Pharm decided on cash dividends of 200 won per common share and stock dividends of 0.02 shares. The number of shares eligible for dividends is about 43.42 million, excluding about 260,000 treasury shares. Celltrion Pharm said that having posted record-high results through the third quarter this year and with solid growth expected to continue in its chemical and biosimilar businesses, it will pursue both expanded investment and shareholder returns through simultaneous cash and stock dividends.
A Celltrion Group official said, "This dividends decision reflects our confidence in growth and our commitment to grow with shareholders, even as we face large-scale capacity expansion investments such as expanding global production hubs," adding, "We will drive sustainable growth by pursuing our mid- to long-term growth strategy and shareholder-return policy in a balanced manner."
Meanwhile, at the board meeting that day, Celltrion also decided to inject about 782.4 billion won ($532.1 million) in capital into its U.S. subsidiary, CelltrionUSA, to acquire Eli Lilly and Company's biopharmaceutical production facility in Branchburg, N.J. CelltrionUSA, as the acquirer, plans to use the funds for the acquisition and operation of the facility.
The capital increase will proceed in two rounds. The first, about 655.5 billion won ($445.8 million), will be executed on the 18th, and the second, about 126.9 billion won ($86.3 million), will be carried out next year. Having completed merger review last month and secured funding, Celltrion plans to complete the acquisition within the year and immediately begin contract manufacturing organization (CMO) production of Eli Lilly and Company's drug substance (DS). It then plans to pursue maximum capacity expansion to strengthen the competitiveness of the U.S. production facility.