November 21, 2024

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[THE INVESTOR] Samsung Group affiliates earned a combined 80 billion won (US$72.70 million) last year in dividends and brand royalty fees from Renault Samsung Motors, thanks to the automaker’s stellar sales performance.

Tech giant Samsung Electronics raked 18.7 billion won from the automaker for using the Samsung logo last year, according to the South Korean unit of the French automaker. 

Renault Samsung SM6

Since 2000 when the French Renault Group acquired the financially struggling Samsung Motor from Samsung Group, the automaker has paid 0.8 percent of its domestic profits from the cars produced at the automaker’s Busan plant in royalty fees.

As Renault Samsung has to hand over billions of won to Samsung Group, there have been growing speculation that the carmaker would ditch the Samsung logo when the royalty contract is set to expire in 2020.

But the automaker denied it saying it is too early to decide on the matter. 

“Nothing has been confirmed on the details of the Samsung brand usage,” a Renault Samsung Motors official told The Investor. “We still have three years left (until the due date) so we haven’t yet evaluated the matter.”

“Having the Samsung brand is a good selling-point in the local market,” he said.

Besides collecting royalty fees, the group’s credit card operator Samsung Card received 61.8 billion won in dividends -- as it owns a 19.9 percent stake in the Renault Samsung -- according to the official audit report released on April 3.

Last year, Renault Samsung gave out its entire net income of 310.4 billion won as dividends -- a payout ratio of 100 percent. Renault Group, with 79.9 stake in the automaker, reaped 248 billion won in dividends.

Renault Samsung posted 6.24 trillion won in revenue and 417.5 billion won in operating profit, up by 24.5 percent and 35 percent, respectively, from the previous year. The figure is the highest since 2000, fueled by popularity of SM6 sedan and QM6 SUV.

By Ahn Sung-mi (sahn@heraldcorp.com)