KB News Desk
Overseas tobacco sales and price increases drive fourth straight quarter of double-digit profit growth
KT&G delivered double-digit profit growth for a fourth straight quarter, posting record first-half revenue as its profitability strategy and robust overseas sales drove the gains, the South Korean tobacco maker said Thursday.
In the April-June period, consolidated revenue rose 9.9 percent from a year earlier to 1.7 trillion won ($1.2 billion), while operating profit climbed 18.5 percent to 414.5 billion won. Revenue for the first half reached about 3.4 trillion won, a record for the six-month stretch.
Extending that trajectory, KT&G raised its annual guidance to 5-7 percent revenue growth and 10-13 percent operating profit growth, up from 3-5 percent and 6-8 percent, respectively.
The core tobacco business led the results, posting revenue of 1.22 trillion won and operating profit of 382.5 billion won.
Despite geopolitical volatility, overseas revenue grew 18.9 percent to 557.7 billion won, while operating profit jumped 45.6 percent on higher volumes and price increases. In the Korean market, KT&G held a 67.9 percent share of the cigarette market in the first half.
The company’s next-generation products business, which includes heated tobacco devices, saw revenue rise about 23.8 percent to 242.7 billion won, tightening its domestic lead with a 48.2 percent share. KT&G said it plans to introduce a technology-driven new product in the second half, broadening its NGP lineup and reinforcing its market position.
Besides tobacco, its health functional foods business under Korea Ginseng Corp. posted modest growth, with domestic sales up 7.8 percent to 174.2 billion won and operating profit rising 61.3 percent to 10 billion won on growth in high-margin sales channels.
Meanwhile, KT&G’s board extended the company’s high-dividend policy by approving an interim dividend of 2,000 won per share, up from 1,400 won a year earlier.
In April, KT&G retired all its treasury shares, ahead of the cancellation target scheduled in its 2024-2027 value enhancement plan announced in late 2023. It plans to unveil a new shareholder return policy in the fourth quarter and said its planned second-half buybacks and cancellations remain on track.
“We’ll build on this growth to keep pursuing shareholder returns through high dividends, buybacks and cancellations,” a company official said.
