Korean units of GlaxoSmithKline (GSK) and Pfizer showed the highest propensity to dividend among subsidiaries in Korea owned by multinational pharmaceutical firms.

Dividend propensity refers to a proportion of dividend payouts out of net profits. As Korean units of non-listed foreign firms send dividends to parent companies, high dividend propensity has been controversial.

According to each drugmaker’s disclosed business reports as of 2017, GSK Korea’s dividend payout ratio out of net income stood at 170 percent, which was the highest dividend propensity among units of multinational drugmakers. It paid 15 billion won ($14 million) in dividends last year. Pfizer Korea came next with 169 percent (79.79 billion won in dividends).

Abbott Korea followed the two companies with 135 percent (4 billion won), Novo Nordisk Korea with 95 percent (1.5 billion won), Bayer Korea with 85 percent (11.5 billion won), Korea Otsuka Pharmaceuticals with 78 percent (13.1 billion won), Galderma Korea with 75 percent (2.5 billion won), Merck with 69 percent (5 billion won), Janssen Korea with 50 percent (6.2 billion won), Sanofi-Aventis Korea with 32 percent (7 billion won), and Genzyme Korea with 24 percent (3 billion won).

In 2014, GSK Korea’s dividend ratio exceeded 3,000 percent. In the past five years, the figure stayed high at 231 percent in 2013, 3,340 percent in 2014, 38 percent in 2015, 379 percent in 2016, and 170 percent in 2017.

Observers said such dividend payout ratios were unusually high, compared with those by local drugmakers.

Ildong Pharmaceutical had the highest dividend payout ratio at 39.56 percent among local pharmaceutical firms. Hanmi Pharmaceutical showed a single digit, at 9.19 percent. That of Yuhan Corp. and Daewoong Pharmaceutical stood at 19.64 percent and 16.86 percent, respectively. GC Pharma paid 26 percent of net profit in dividends, and Kwang Dong Pharmaceutical, 13.61 percent.

Meanwhile, GSK Korea’s local donations plunged last year. According to the firm’s disclosed data, its contributions almost halved to 670 million won last year from 1.02 billion won in 2016.

hwz@docdocdoc.co.kr

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