“Apologize like Baek Jong-won.”
At the shareholders' meeting held on the 31st, DS Dansuk faced ongoing criticism for the lack of measures from the owner despite a drop in stock prices.
DS Dansuk held a shareholders' meeting at its auditorium in Siheung, Gyeonggi Province, on this day and passed the motion to approve the total compensation for 7 directors, including 3 outside directors, with a total limit of 5 billion won. It also announced that the 2024 financial statements were approved as originally proposed.
However, the company confirmed that it would not pay dividends this year, marking a continuation from last year despite it being a representative shareholder-friendly policy. The retained earnings, which are the source of dividends, amount to approximately 127.3 billion won as of the end of 2024.
The decision by DS Dansuk not to pay dividends and to retain internal funds is understood to be due to a decline in profitability. DS Dansuk recorded revenues of 961.7 billion won last year, contrasting with the approximately 1.07 trillion won achieved in 2022, the year before going public. Operating profit also plummeted from 76.2 billion won in 2023 to 12.2 billion won in 2024, a decrease of 84%. Net profit turned to a loss with a deficit of 10.3 billion won.
The continuous decrease in sales in the bioenergy sector, which is the company's core business, has been impactful. The demand for eco-friendly products, such as biodiesel made from used cooking oil, has decreased due to policy changes in the United States and Europe, leading to a drop in export prices.
DS Dansuk is halting biodiesel production at its Pyeongtaek Plant 2 while pursuing process upgrades, but some interpret this as a response to the impact of shrinking exports. The domestic market is also sluggish, affected by declining supply prices.
However, shareholders betting on the growth potential of biodiesel are expressing their outrage. According to a adjusted stock price trend reflecting the free capital increase that DS Dansuk conducted at the end of last year, the stock price, which was around 133,385 won on the listing date of Dec. 22, 2023, plummeted to 22,900 won on the 31st. This is a drop of nearly 83%.
The second major shareholder, private equity firm Stonebridge Capital, sold all of its 1.09 million shares over four occasions from April to Nov. 1 last year to realize profits, and even conducted a free capital increase in December to appease existing shareholders, but the stock price continues to decline instead of rising.
In the meantime, Han Soo-hyun, the third-generation heir and son of Chairman Han Seung-wook, sold 130,000 shares between Dec. 11 and 12 last year, sparking resentment among shareholders. The amount totaled around 6.3808 billion won. It is uncommon for an owner in a succession structure to sell shares amid difficult company circumstances. The company disclosed that the reason for the share sale was "for repayment of borrowing funds and tax payment purposes."
According to the business report, Chairman Han received a total of 577.118 million won in salary and bonuses, including a salary of 550 million won and a bonus of 27.119 million won last year.
Experts believe that the plummeting stock prices within a year of going public is problematic.
Jo Myeong-hyeon, a professor at Korea University Business School, noted, "Recently, many corporations enter the market at inflated offering prices, and the underwriters must have a greater sense of responsibility when evaluating corporate value and should have mechanisms to be accountable if issues arise."