KT&G announces additional shareholder returns, setting annual dividend per share at 6,000 KRW, signs MOU with Altria on nicotine pouch, etc.

Rhea-AI Summary

KT&G (OTC:KTCIY) announced significant shareholder returns and strategic growth initiatives at its 2025 CEO Investor Day. The company set a minimum annual dividend of 6,000 KRW per share, a 600 KRW increase from the previous year, and plans an additional share repurchase and cancelation of 260 billion KRW. Total additional shareholder returns will reach 276 billion KRW, representing 171% of prior year's level.

The company signed a comprehensive MOU with Altria for strategic collaboration in nicotine and non-nicotine spaces, including joint acquisition of Scandinavian nicotine pouch manufacturer ASF. KT&G reported strong performance with five consecutive quarters of triple growth in revenue, operating profit, and sales volume, with H1 2025 adjusted operating profit showing 127.8% year-on-year growth.

Positive

• Increased minimum annual dividend to 6,000 KRW per share, up 600 KRW from previous year
• Additional share repurchase and cancelation of 260 billion KRW, up 100 billion KRW year-over-year
• 127.8% year-on-year growth in adjusted operating profit for H1 2025
• Strategic MOU with Altria for global market expansion and portfolio diversification
• Five consecutive quarters of triple growth in revenue, operating profit, and sales volume

Negative

• Significant capital expenditure required for joint acquisition of Another Snus Factory
• Potential execution risks in integrating new nicotine pouch operations

• Additional share repurchase & cancelation of 260b KRW, targets double digit operating profit and revenue growth based on solid global business 
• Signs comprehensive MOU with American tobacco manufacturer Altria, for collaboration in all areas including nicotine pouch and health functional foods

SEOUL, South Korea, Sept. 23, 2025 /PRNewswire/ -- KT&G announced this year's growth targets and additional shareholder return plans through the "2025 KT&G CEO Investor Day" held on the 23^rd, also disclosing details of the MOU with the American tobacco manufacturer Altria.

During the Investor Day, KT&G CEO Kyung-man Bang stated that the company will effectively distribute any excess capital occurring in the future to simultaneously maximize corporate and shareholder value, upgrading the "shareholder return distribution principle."

Specifically, KT&G plans to take actions such as implementing total payout ratio of 100% or higher; maintaining dividend payout ratio of 50% or higher; setting a lower limit for dividend yield; and conducting elastic share repurchases throughout the year if share prices are considered undervalued compared to long-term intrinsic value. Additional shareholder returns following cash generation will reflect the dividend expansion trend and will be pursued in line with share repurchases.

In order to achieve this, KT&G set the minimum annual dividend per share at 6,000 KRW, an increase of 600 KRW from the previous year. Furthermore, KT&G plans to pursue further share repurchase and cancelation amounting to 260 billion KRW utilizing the resources from liquidation of non-core assets such as real estate staring on the 24^th. This is an year on year increase of 100 billion KRW — together with the dividend increase, a total of 276 billion KRW additional shareholder return will be made, representing 171% of the prior year's level.

KT&G has already completed the cancelation of 10.4% of the shares (as of 2023). The proportion of the cumulative shares canceled is expected to grow when the planned repurchase and cancelation is executed and reflected.

The reason behind stronger shareholder return policies is considered to be KT&G's global business settling into a growth trend as a result of CEO Kyung-man Bang's priority task of implementing fully local value chains since his inauguration in March 2024.

The global cigarette business achieved five consecutive quarters of "triple growth" in revenue, operating profit, and sales volume as of KT&G's Q2 earnings report session. Adjusted operating profit for the first half of 2025 showed a sharp year on year growth of 127.8%.

KT&G CEO Kyung-man Bang explained that strategic export price hikes and increasing the proportions of premium product in the global business has led to qualitative growth and that manufacturing cost reduction from global economic manufacturing system transition has led to the establishment of a new structure that will expand profitability in the long term.

Additionally, KT&G targets double-digit growth for both operating profit and revenue this year and plans to reinforce direct communications with shareholders, investors, and the capital market through occasions like the CEO Investor Day.

Prior to the investor session, CEO Kyung-man Bang of KT&G and CEO Billy Gifford of top-tier American tobacco manufacturer Altria signed a comprehensive MOU, forming a basis for strategic collaboration in nicotine and non-nicotine spaces.

Accordingly, KT&G and Altria pursues the joint acquisition of "Another Snus Factory (ASF)," a Scandinavian nicotine pouch manufacturer, in order to participate in the rapidly-growing global nicotine pouch market.

In order to seek opportunities for expanding nicotine pouch portfolios and increasing market presence, KT&G and Altria plans to utilize KT&G's global distribution network to present ASF's "LOOP" and Altria's "on!" products. The two companies plan to discuss operational details in the nicotine pouch space at a later point in time.

The two companies also agreed to expand the scope of collaboration by seeking ways to optimize the traditional cigarette business to reinforce market competitiveness; complement portfolios for diversification; and through other means.

Furthermore, both parties will seek opportunities for collaboration in the U.S. health functional foods market, seeking ways to improve market penetration by using KGC's product expertise and capabilities alongside shared U.S. consumer insights and Altria's established go-to-market infrastructure.

A KT&G spokesperson stated that "the company decided to pursue additional share repurchases and cancelation as well as high dividend payout policies based on the profits from the rapid growth of our global business," and that "through the MOU with the top-tier American tobacco manufacturer Altria, KT&G will secure future growth momentum by expanding core business portfolio and reinforcing competitiveness."

View original content to download multimedia:https://www.prnewswire.com/news-releases/ktg-announces-additional-shareholder-returns-setting-annual-dividend-per-share-at-6-000-krw-signs-mou-with-altria-on-nicotine-pouch-etc-302564213.html

SOURCE KT&G Corporation

FAQ

What is KT&G's new annual dividend per share for 2025?

KT&G set the minimum annual dividend at 6,000 KRW per share, representing a 600 KRW increase from the previous year.

How much is KT&G's additional share repurchase program worth?

KT&G announced an additional share repurchase and cancelation program worth 260 billion KRW, funded by liquidation of non-core assets.

What are the details of KT&G's MOU with Altria?

The MOU includes joint acquisition of nicotine pouch manufacturer ASF, collaboration in traditional cigarette business, and potential expansion into U.S. health functional foods market.

How has KT&G's global business performed in recent quarters?

KT&G achieved five consecutive quarters of triple growth in revenue, operating profit, and sales volume, with H1 2025 adjusted operating profit growing 127.8% year-over-year.

What is KT&G's new shareholder return policy?

KT&G will implement a total payout ratio of 100% or higher, maintain dividend payout ratio of 50% or higher, set minimum dividend yields, and conduct elastic share repurchases throughout the year.