KT&G Reports Strong Q1 Performance, Driven by Global Growth and Improved Profitability
Group operating profit rises 27%, owing to a 56% increase in overseas cigarette operating profit, Enhanced profitability by leading core business—new shareholder return policy focused on higher dividends to be announced in H2
KT&G (CEO Bang Kyung-man) announced at its investor relations briefing on May 7 that the company’s first-quarter overseas cigarette operating profit increased by 56.1% year-on-year, leading overall group performance through proactive profitability-focused management.
KT&G recorded a consolidated first-quarter revenue of KRW 1.7036 trillion and operating profit of KRW 364.5 billion, representing year-on-year increases of 14.3% and 27.6%, respectively, driven by strong performance in its overseas cigarette business. Specifically, revenue in the tobacco business sector rose 17% year-on-year to KRW 1.1559 trillion, while operating profit increased 27.2% during the same period to KRW 321.6 billion.
In particular, the overseas cigarette business achieved balanced growth in sales volume across Asia-Pacific, Eurasia, and other key regions. At the same time, the company led continuous strategic price increases, resulting in the highest quarterly revenue in the company’s history. First-quarter revenue from the overseas cigarette business reached KRW 559.6 billion, up 24.6% year-on-year, while operating profit increased 56.1% compared to the same period last year through reductions in costs and selling and administrative expenses. As a result, the business achieved “triple growth,” with revenue, operating profit, and sales volume all increasing simultaneously.
The domestic cigarette business maintained its overwhelming market leadership, with a 68.8% market share. Simultaneously, revenue from the next-generation product (NGP) business reached KRW 241 billion, up approximately 51.5% year-on-year, driven by growth in domestic and overseas markets as well as base effects stemming from overseas device supply chain issues in the previous year. KT&G plans to continue launching new products throughout the year to further strengthen its market leadership in the NGP category.
In addition, KT&G plans to actively leverage the competitive edge of its direct overseas cigarette business operations to accelerate the independent global expansion of its NGP products. The company intends to establish a foundation for expanding direct entry into the heated tobacco product market by utilizing the expertise and distribution networks it has built in key overseas tobacco markets where it has achieved meaningful results, including Asia-Pacific and Eurasia.
KGC’s health functional food business recorded revenue of KRW 332.6 billion, up 5.8% year-on-year, driven by strong domestic Lunar New Year promotional campaigns and the performance of brand campaigns for products such as “Cheonnok” and “Everytime.” Operating profit rose 53.3% year-on-year to KRW 27.9 billion, supported by expanded sales through high-profitability channels and profitability-focused business strategies.
KT&G also plans to directly expand into the global nutrition business. To support this initiative, the company established a dedicated center earlier this month and plans to pursue a B2B red ginseng ingredient business targeting global food, beverage, and cosmetics companies. The company also plans to diversify its overseas operations by collaborating with global partners to launch new products that reflect local market trends in overseas markets.
Meanwhile, on April 23, KT&G proactively reflected the intent of the third amendment to the Commercial Act by retiring its 10,866,189 treasury shares—equivalent to 9.5% of total issued shares, valued at approximately KRW 1.8516 trillion. By doing so, KT&G exceeded its treasury share cancellation target ahead of schedule, under its 2024–2027 corporate value enhancement plan. Accordingly, the company plans to announce a new shareholder return policy centered on expanded dividends in the second half of the year.
Lee Sang-hak, the COO of KT&G, stated, “Despite external uncertainties heightened by geopolitical issues in the Middle East, stable revenue growth has continued across all regions, including Asia-Pacific, Eurasia, and emerging markets. We expect this momentum of our annual overseas cigarette business to continue.” He added, “Based on performance growth driven by global business expansion, we will continue implementing new shareholder return policies to increase shareholder value, including enhanced dividends.”