KT&G Records All-Time High Quarterly Earnings, to Provide Substantial Returns to Shareholders

South Korean tobacco manufacturer KT&G has set a new record in quarterly earnings, driven by strong cigarette sales in foreign markets and growth in the heated tobacco business. According to a report by The Korea Herald, the company's consolidated revenue for the period from July to September rose by 4.3 per cent year-on-year to 1.91 trillion won ($1.4 billion). Simultaneously, the operating profit increased by 13.9 per cent to 530.1 billion won, with both figures being the highest on a quarterly basis in the company's history.

The company has expressed expectations of 7 trillion won in revenue and 1.5 trillion won in operating profit for the full year. Last year, these figures were 6.58 trillion won and 1.35 trillion won, respectively. The company's core tobacco business played a significant role in these results, with revenue increasing by 6 per cent to 1.31 trillion won and operating profit rising by 14.4 per cent to 425.5 billion won. The operating margin for this business increased by 2.4 percentage points to 32.6 per cent.

Cigarette sales in foreign markets have seen growth for the 10th consecutive quarter, with records noted in both volume and revenue. The next-generation products business, including heated tobacco, has maintained its first-place position in Korea. Additionally, the health functional foods business under Korea Ginseng Corporation has also grown, with revenue increasing by 3.4 per cent to 372.2 billion won and operating profit rising by 12.2 per cent to 80.1 billion won.

Regarding future plans, KT&G will expand its foreign market presence by increasing prices, driving premium sales of brands such as ESSE, and entering approximately 30 new countries. By improving global production processes, including a new plant in Indonesia, the company aims to save over 550 billion won over the next four years. The company will add direct foreign operations to its heated tobacco partnership. It aims to expand the Swedish nicotine pouch brand LOOP, acquired last year, to approximately 70 countries by 2030. KGC will increase sales of red ginseng ingredients abroad and is in talks with global food and beauty companies.

By the year 2030, KT&G aims to derive more than 70 per cent of its cigarette revenue and 30 per cent of its health food revenue from overseas. There is a plan to increase the share of next-generation products in tobacco revenue to over 30 per cent. CEO Bang Kyung-man stated, "By strengthening the pillars of growth and expanding their global reach, we will deliver not only revenue expansion but also profitable growth. We will enhance shareholder value through world-class returns."

For shareholders, the company has increased the annual dividend this year by 2,000 won to 8,000 won per share, representing a 33.3 per cent increase. By 2030, the payout ratio will be increased from approximately 60 per cent to 75 per cent or more. Starting next year, the company will repurchase and cancel shares worth 1.2 trillion won over four years. Total returns, including dividends, will exceed 5 trillion won, and the company will consider special returns if necessary.