Celltrion retires W100b in shares, pledges third of net profit to shareholders

Celltrion has retired an additional 100 billion won ($74.3 million) worth of treasury shares this year, demonstrating its commitment to a medium- and long-term shareholder return policy.

The company said Wednesday it had resolved to cancel 544,299 treasury shares valued at 100 billion won to enhance shareholder value. The cancellation is scheduled for Sept. 30, with the updated share listing expected to be finalized in October.

The move follows Celltrion's previously announced medium- and long-term shareholder return principle, under which the company pledged to return roughly one-third — about 33 percent — of its annual consolidated net profit through share cancellations or cash dividends.

With this resolution, the total value of treasury shares Celltrion has acquired and earmarked for cancellation this year reaches 200 billion won across two separate tranches. The company said it has been canceling recently repurchased shares immediately to head off concerns about resale on the market and to make its shareholder return policy more predictable.

Going forward, Celltrion said it plans to make active use of buybacks and cancellations during periods when its share price appears undervalued, while flexibly allocating cash dividends when stable cash returns are called for, with the aim of maximizing shareholder value.

The aggressive return policy is backed by solid earnings and cash generation. Celltrion posted record annual sales of 4.16 trillion won and operating profit of 1.17 trillion won last year on a consolidated basis, and has kept the momentum going with sales of 2.54 trillion won and operating profit of 773.7 billion won in the first half of this year. Growth has been driven by the global rollout of high-margin products — including Yuflyma, Vegzelma and Omlyclo — alongside its established lineup of Remsima, Truxima and Herzuma.

The cancellation is seen as a move to bolster management credibility by promptly delivering on a promised return ratio — through actual cash outflows and share retirements — at a time when calls for greater shareholder value are growing across South Korea's stock market, and when the company's strong earnings provide a firm foundation to do so.

"This cancellation is a consistent follow-through on the medium- and long-term return principles we recently announced," a Celltrion official said. "We will continue investing in research and development and capital expenditure to fuel future growth, while firmly upholding our commitment to return one-third of net profit to shareholders."