- Strong results based on new global launches and pricing-targets double-digit operating profit growth for the year
-'Prioritizing Shareholder Value' by reinforcing high-dividend trends with a KRW 200 increase in interim dividend and annual KRW 660 billion +a in share cancellation
SEOUL, South Korea, Aug. 7, 2025 /PRNewswire/ -- KT&G(KRX: 033780) held an earnings release conference call on the 7th to announce its 2025 second quarter results.
KT&G stated that the consolidated revenue reached KRW 1.5479 trillion and operating profit KRW 349.8 billion, delivering respective YoY growths of 8.7% and 8.6%. Q2 2025 marks the third consecutive quarter of revenue and operating profit growth since Q4 2024. In parallel, the first-half revenue surpassed KRW 3 trillion for the first time.
KT&G's core business, the tobacco segment, continued the growth trend with revenue and operating profit growing 10% and 1.6% YoY to reach KRW 1.0906 trillion and KRW 321.8 billion respectively, owing to the exponential growth of the global CC business.
The global cigarette segment recorded 5 consecutive quarters of "triple growth" of revenue, operating profit, and sales volume. Revenue was at KRW 469 billion, a YoY growth of 30.6%; and sales volume increased 9.1% YoY to reach 16.7 billion sticks, setting a new quarterly revenue and sales volume record. Adjusted operating profit excluding previous year's allowance for doubtful account refunds rose 51.1% YoY, securing high-growth momentum.
The results reflect concrete results of KT&G CEO Kyung-man Bang's priority strategies-full local integration of value chains and transition into a CIC system. Furthermore, launch of new competitive products centered around "ESSE" in major regions including Asia-Pacific, Central Asia, and Latin America; expansion of premium range products in the portfolio; and price hikes based on brand power were valid strategies. When the global manufacturing facilities' material local-sourcing system is completed in 2025 H2, accelerated profit growth based on cost reduction is expected.
Domestic NGP (Next Generation Products) segment recorded first-half market share of 45.8% based on increased "lil AIBLE" sales. Global stick sales volume rebounded to 2.2 billion sticks; a YoY increase of 4.2%.
The health functional foods segment, operated by KGC, recorded an operating profit of KRW 6.2 billion. Despite the domestic economy's downturn, profitability-focused strategies, including optimization of marketing costs, led to profit.
KT&G board convened on the same day, resolving to increase interim dividend by KRW 200 to KRW 1,400 per share in order to reinforce the high-dividend payout trend. The company plans to review dividend payout increases in line with stock price and profit growth. Additionally, KT&G decided to repurchase and cancel KRW 300 billion worth of treasury shares starting on the 8th.
On top of such plans, KT&G plans further share repurchase and cancellation schemes in H2 by utilizing resources from liquidation of non-core assets including real estate. The company has already cancelled KRW 360 billion worth of treasury shares held, equivalent to 2.5% of issued shares, in the first quarter of the year.
Previously, KT&G revealed a best-in-class Value Up plan for 2024 to 2027 consisting of cash returns amounting to KRW 3.7 trillion that includes cash dividends and share repurchases; and share cancellation scheme for 20% of issued shares including cancellation of newly repurchased shares. Last year, in accordance with the plan, KT&G executed cash returns of KRW 1.1 trillion, achieving 100% total shareholder return ratio, while cancelling 6.3% of issued shares. This year, KT&G pursues Value Up programs in greater scale, continuing its top-tier shareholder value improvement policies.
A KT&G spokesperson stated that "we have secured mid- to long-term growth momentum based on excellent performance of new product launches in major global markets as well as brand power-based price hikes. We will continue to advance our business with a goal of achieving double-digit annual operating profit growth this year. Based on our performance, we will execute share repurchasing and cancellation schemes according to plan and continue our high-dividend policies to prioritize shareholder value improvement."
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