KT&G Reports Impressive Q1 Performance Enhancing Global Cigarette Business Growth

On May 8, 2025, KT&G Corporation (KRX: 033780) conducted an earnings conference call, revealing substantial financial results for the first quarter of 2025. The company reported a consolidated revenue of 1.491 trillion KRW and an operating profit of 285.6 billion KRW, reflecting a remarkable year-over-year growth of 15.4% and 20.7% respectively. These impressive results showcase the effectiveness of KT&G's strategy to enhance profitability in its core business operations.

In the mainstay cigarette sector, KT&G experienced an increase in revenue by 15.3%, amounting to 988 billion KRW, accompanied by a 22.4% rise in operating profit to 252.9 billion KRW. This growth can be attributed to effective price adjustments and heightened sales volumes in key markets, leading to what KT&G describes as 'triple growth'—an encouraging trend seen across operating profit, sales volume, and revenue for four consecutive quarters.

Particularly noteworthy is the 312.5% surge in operating profit from the global sector, with revenue outpacing last year's figures by 53.9%, culminating in a record high of 449.1 billion KRW for the quarterly performance. This achievement aligns with the visionary leadership of CEO Kyung-man Bang, who has pioneered a fully-localized value chain strategy since assuming the role last year. The recent establishment of a new factory in Kazakhstan and the anticipated completion of a plant in Indonesia next year are expected to bolster KT&G’s expansion efforts, broadening its global business footprint.

Moreover, in terms of Other New Product (NGP) endeavors, the lil Hybrid brand experienced a modest revenue increment of 6.5% in the South Korean market. The performance of Health Functional Foods (HFF), overseen by the Korea Ginseng Corporation (KGC), was also commendable, showing a 1.9% revenue growth despite a challenging domestic economic environment. The real estate sector notably contributed to KT&G’s profitability, revealing revenues of 100.4 billion KRW and an operating profit of 10.4 billion KRW.

In a proactive move, KT&G has committed to returning 3.7 trillion KRW to shareholders between 2024 and 2027, which encompasses cash dividends and strategic stock buybacks, including plans to cancel 20% or more of its outstanding shares. Last year alone, the firm distributed a total cash return of 1.1 trillion KRW and successfully retired 6.3% of its outstanding shares through treasury stock cancellations. In early 2025, the company continued its shareholder reward initiatives, having canceled 2.5% of shares, valued at approximately 360 billion KRW.

A spokesperson for KT&G remarked that despite facing adverse market conditions, such as significant currency fluctuations and an economic slowdown at home, the corporation achieved mutual growth in revenue and operating profit by concentrating on enhancing the competitiveness and profitability of its core business. The company aims to sustain this growth momentum and expand its reach from traditional cigarettes to modern products.

As KT&G continues its progress into new markets and segments, its evolving strategies reflect an unwavering commitment to securing a leading position in the global tobacco industry while enhancing shareholder value.