KT&G Achieves Record Q3 Revenue and Profit, Upgrades Growth Forecast
In an impressive showing, KT&G (KRX: 033780) has reported record-breaking quarterly revenue and operating profit for the third quarter of the year. With consolidated revenue hitting a remarkable KRW 1.8269 trillion and operating profit reaching KRW 465.3 billion, the company has demonstrated robust growth, achieving a year-on-year increase of 11.6% in revenue and 11.4% in operating profit. This marks a significant moment as KT&G aims to bolster its core business competitiveness and profitability-focused growth strategy.
The company's quarterly report highlighted a new milestone in the cigarette segment, with revenue amounting to KRW 1.2323 trillion—a remarkable year-on-year growth rate of 17.6%. Operating profit for this segment also saw an impressive increase, rising 11% to KRW 371.8 billion. The consistent strength of KT&G's performance is illustrated by the global cigarette business, which marked its third consecutive quarter of record revenue, driven by increased volume sales in key markets such as Central Asia, Latin America, and Asia-Pacific. Particularly noteworthy was the revenue crossing KRW 500 billion for the first time, reflecting a stellar year-on-year growth of 24.9%.
In addition to its strong cigarette sales, KT&G's domestic tobacco business, inclusive of both traditional cigarettes and Next Generation Products (NGPs), has maintained its substantial market share despite rising competition. Growth in both device and stick sales for NGPs reinforces the company's solid position in the market, thanks in large part to innovative products and strategic launches.
While the health functional foods division reported a revenue decrease of 16.8% year-on-year, it still managed to generate an operating profit of KRW 71.5 billion, a 3.9% increase over the previous year. This shows that the company is optimizing its marketing strategies, focusing on profitability even amidst a declining top line.
Further bolstering KT&G’s market position was the recent signing of a comprehensive memorandum of understanding (MOU) with the American tobacco giant, Altria. Both companies have agreed to jointly acquire Another Snus Factory (ASF), a Northern European manufacturer, looking to expedite the growth of the nicotine pouch market as they anticipate concluding the acquisition by December 2025.
During an earlier Investor Day session, KT&G’s CEO, Kyung-man Bang, elucidated the firm’s shareholder return principles aimed at maximizing corporate value. The agenda includes total shareholder returns of 100% or higher, maintaining a dividend payout ratio exceeding 50%, and executing flexible share repurchases when shares are undervalued. In line with this, KT&G has committed to an annual dividend of KRW 6,000 per share, which marks an increase from KRW 5,400 in the previous year.
KT&G’s CFO, Sang-hak Lee, credited the record quarter to the company’s sophisticated local integration strategy in the global cigarette business and emphasized that the focus on modern products and NGPs will continue to secure future growth potential. The overall strategy aims to enhance both corporate and shareholder value continuously.
As KTG teams look ahead, the emphasis on innovation and expansion into high-growth segments positions the company as a formidable player in the fast-evolving global tobacco landscape. As trends continue to shift toward healthier alternatives, KT&G’s ability to adapt and innovate will be critical for its ongoing success in this competitive market.
The company's quarterly report highlighted a new milestone in the cigarette segment, with revenue amounting to KRW 1.2323 trillion—a remarkable year-on-year growth rate of 17.6%. Operating profit for this segment also saw an impressive increase, rising 11% to KRW 371.8 billion. The consistent strength of KT&G's performance is illustrated by the global cigarette business, which marked its third consecutive quarter of record revenue, driven by increased volume sales in key markets such as Central Asia, Latin America, and Asia-Pacific. Particularly noteworthy was the revenue crossing KRW 500 billion for the first time, reflecting a stellar year-on-year growth of 24.9%.
In addition to its strong cigarette sales, KT&G's domestic tobacco business, inclusive of both traditional cigarettes and Next Generation Products (NGPs), has maintained its substantial market share despite rising competition. Growth in both device and stick sales for NGPs reinforces the company's solid position in the market, thanks in large part to innovative products and strategic launches.
While the health functional foods division reported a revenue decrease of 16.8% year-on-year, it still managed to generate an operating profit of KRW 71.5 billion, a 3.9% increase over the previous year. This shows that the company is optimizing its marketing strategies, focusing on profitability even amidst a declining top line.
Further bolstering KT&G’s market position was the recent signing of a comprehensive memorandum of understanding (MOU) with the American tobacco giant, Altria. Both companies have agreed to jointly acquire Another Snus Factory (ASF), a Northern European manufacturer, looking to expedite the growth of the nicotine pouch market as they anticipate concluding the acquisition by December 2025.
During an earlier Investor Day session, KT&G’s CEO, Kyung-man Bang, elucidated the firm’s shareholder return principles aimed at maximizing corporate value. The agenda includes total shareholder returns of 100% or higher, maintaining a dividend payout ratio exceeding 50%, and executing flexible share repurchases when shares are undervalued. In line with this, KT&G has committed to an annual dividend of KRW 6,000 per share, which marks an increase from KRW 5,400 in the previous year.
KT&G’s CFO, Sang-hak Lee, credited the record quarter to the company’s sophisticated local integration strategy in the global cigarette business and emphasized that the focus on modern products and NGPs will continue to secure future growth potential. The overall strategy aims to enhance both corporate and shareholder value continuously.
As KTG teams look ahead, the emphasis on innovation and expansion into high-growth segments positions the company as a formidable player in the fast-evolving global tobacco landscape. As trends continue to shift toward healthier alternatives, KT&G’s ability to adapt and innovate will be critical for its ongoing success in this competitive market.
Topics Consumer Products & Retail）
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