KT&G Reports Record Revenue and Operating Profit in Q3, Adjusts Financial Forecasts

KT&G Achieves Record Q3 Results

KT&G, a major player in the tobacco industry, has recently released its third-quarter financial results, showcasing significant growth and profitability. For the first time ever, the company reported quarterly revenue exceeding KRW 500 billion, signaling a landmark achievement in its ongoing business strategy. As competition intensifies in the market, KT&G has focused on enhancing its core business operations, which has paid off handsomely this quarter.

In Q3, KT&G's consolidated revenue reached KRW 1.8269 trillion, demonstrating an impressive year-on-year growth of 11.6%. Operating profit also saw a remarkable rise, hitting KRW 465.3 billion, an increase of 11.4% compared to the same quarter last year. These figures mark a five-year high for the company, reflecting its commitment to maximizing profitability and corporate growth.

The company’s success in the cigarette segment contributed significantly to these numbers, generating a quarterly revenue of KRW 1.2323 trillion—a new record for the third quarter. This figure represents a staggering 17.6% increase compared to the same period last year, while operating profits in this segment grew by 11%, landing at KRW 371.8 billion. The robust performance has been bolstered by increased sales volumes in key markets such as Central Asia, Latin America, and the Asia-Pacific region, alongside strategic price adjustments.

Despite the competitive landscape, KT&G has successfully maintained its market dominance in the domestic tobacco sector, encompassing both traditional cigarettes and next-generation products (NGP). The solid sales of its modern offerings have helped to bolster its market share amid increasing competition from various sectors.

KT&G is not just resting on its laurels, however. The company has announced an upward revision of its full-year projections, enhancing its growth guidance from the previous estimates of 5~7% for revenue and 6~8% for operating profit to a new target indicating double-digit growth.

A notable contributor to this optimistic outlook is the health functional foods sector, managed by KGC, which has restructured its sales channels to focus on high-profit avenues. Although revenues here dipped by 16.8% year-on-year to KRW 359.8 billion, strategic optimizations in marketing have led to a notable rise in operating profit to KRW 71.5 billion, marking a 3.9% increase over the year.

In addition to its impressive quarterly performance, KT&G is strengthening its future prospects through strategic partnerships. Earlier in September, the company revealed an MOU with Altria, another heavyweight in the tobacco sector, to jointly acquire a Northern European nicotine pouch manufacturer, Another Snus Factory (ASF). This initiative is expected to propel KT&G into the global nicotine pouch market, projected for substantial expansion in 2026.

In an Investor Day session, KT&G's CEO Kyung-man Bang discussed the company's commitment to enhancing shareholder value, emphasizing a return distribution strategy aimed at achieving total shareholder returns of over 100%. This includes maintaining a dividend payout ratio of 50% or more and implementing flexible share repurchase policies to ensure that the company’s stock remains reflective of its long-term intrinsic value.

Since then, KT&G has utilized proceeds from liquidating non-essential assets to enact a KRW 260 billion stock repurchase, alongside a commitment to increase the annual dividend per share to KRW 6,000—up from KRW 5,400 the previous year.

CFO Sang-hak Lee commented on the achievement, stating, "The company reached record revenue and operating profit through the enhancement of our global cigarette business's integrated structure. Our focus will remain on securing growth rooted in our modern products and NGP offerings while enhancing core business competitiveness." This is a pivotal moment for KT&G as it continues to navigate market challenges while setting ambitious goals for sustained growth and shareholder returns.