KT&G reports Q3 OP growth driven by overseas tobacco sales

(Yonhap)

South Korea’s KT&G announced on Thursday that its third-quarter operating profit for 2024 rose 2.2 percent on-year to 415.7 billion won ($300 million), surpassing analysts’ estimates by 9.2 percent. However, sales fell 3.1 percent to 1.63 trillion won and net income dropped 28 percent to 239.9 billion won.

The company attributed the rise in operating profit to a strategic focus on strengthening core competitiveness and profitability. While overall sales were down, KT&G saw record performance in its three primary business sectors: overseas tobacco, electronic tobacco products, and health supplements. Combined, these areas exceeded 1 trillion won in revenue to hit a historic high.

KT&G’s tobacco segment performed especially well, with sales reaching a record 1.04 trillion won, up 7.7 percent over the same quarter in 2023. Operating profit for the tobacco business surged 23.6 percent to 333 billion won.

The company said that growth in the overseas cigarette business was a key factor, with international tobacco sales reaching 419.7 billion won, up 30.5 percent from a year earlier. This marked the second consecutive quarter of record-breaking overseas tobacco sales.

The overseas segment saw a “triple growth” in sales volume, revenue, and operating profit, with sales volume up 10.1 percent and operating profit up 167.2 percent year-over-year.

KT&G also unveiled its new corporate value enhancement plan, aiming to achieve a 15 percent return on equity (ROE) by 2027 and prioritizing cash returns and stock buybacks. The board approved the buyback and retirement of 1.35 million shares using 150 billion won of funds raised from the sale of non-core, lower-yield assets.