#South Korea #Seoul #Shareholder Value #stock buyback #KT&G

KT&G Announces KRW 360 Billion Share Buyback Plan

KT&G, the leading South Korean tobacco company led by CEO Kyung-man Bang, has made a significant announcement regarding its financial strategy aimed at enhancing shareholder value. On September 22, 2026, the Board of Directors approved a comprehensive share buyback and retirement plan worth approximately KRW 360 billion (around USD 310 million), which is a decisive move to bolster its market presence as well as investor confidence.

Details of the Share Buyback

Starting September 23, KT&G will buy back about 2.07 million shares from the open market, representing roughly 2% of its total shares outstanding. The company plans to retire all shares acquired during this program, thereby reducing its overall share count and potentially increasing per-share value for remaining shareholders. This strategic initiative follows KT&G's earlier promise made in February, when it laid out a plan to repurchase and retire shares worth over KRW 300 billion.

Earlier this year, KT&G had already taken steps to enhance shareholder returns by retiring all previously held treasury shares valued at approximately KRW 1.8 trillion. Consequently, this recent initiative brings the total share repurchased and retired significantly above the company's target of retiring shares equivalent to 20% of its total outstanding shares as of 2023, as outlined in its mid-to-long-term shareholder return plan for 2024-2027.

Financial Performance

The company's robust financial performance in the first half of the year has further fueled this initiative. KT&G reported consolidated revenues of KRW 3.4052 trillion and an impressive operating profit of KRW 779.0 billion, marking a year-on-year increase of 12.0% and 22.6%, respectively. This strong growth can be attributed to the competitive edge gained in its core segments, particularly in overseas cigarette sales and Next Generation Products (NGP).

Increased Dividends and Future Plans

Given its strong earnings trajectory, KT&G has also increased its interim dividend to KRW 2,000 per share from KRW 1,400 last year, marking a KRW 600 increment. The company is set to announce a new mid- to long-term shareholder return policy during the fourth quarter, further emphasizing its commitment to strengthening dividend payouts and shareholder rewards.

The company’s growth and shareholder-friendly policies have attracted considerable interest from global asset managers. Notably, Capital Group has increased its shareholding in KT&G to 8.22%, while BlackRock, known as the world’s largest asset manager, holds a 6.15% stake in the company. This increasing investment from prestigious global firms is a testament to KT&G’s robust market positioning and strategic direction.

Commitment to Shareholder Value

A representative from KT&G highlighted the rationale behind the buyback initiative, stating, "We decided to carry out the share buyback and retirement to enhance the predictability of our shareholder return policy, strengthen capital market confidence, and enhance per-share value." The company aims to create a virtuous cycle between earnings growth and expanded shareholder returns, reinforcing KT&G's commitment to its investors and the market.

This strategic move not only reflects KT&G's solid performance and operational strength but also its dedication to delivering sustainable value to its shareholders, reinforcing its role as a leading player in the tobacco industry while navigating a constantly evolving market landscape.