KT&G Posts Revenue and Profit Growth 3 Quarters in a Row--Strong Shareholder Return to Continue in H2

Rhea-AI Summary

KT&G (OTC:KTCIY) reported strong Q2 2025 results with consolidated revenue reaching KRW 1.5479 trillion and operating profit of KRW 349.8 billion, marking YoY growth of 8.7% and 8.6% respectively. This represents the third consecutive quarter of growth.

The company's tobacco segment showed robust performance with a 10% revenue increase and 1.6% operating profit growth. Global cigarette sales hit record levels with revenue up 30.6% YoY to KRW 469 billion. The company announced an increased interim dividend of KRW 1,400 per share and plans to repurchase and cancel KRW 300 billion worth of treasury shares, demonstrating strong commitment to shareholder returns.

KT&G aims for double-digit operating profit growth in 2025 and continues to execute its 2024-2027 Value Up plan, which includes total cash returns of KRW 3.7 trillion and cancellation of 20% of issued shares.

Positive

• Third consecutive quarter of revenue and operating profit growth
• Record global cigarette revenue with 30.6% YoY growth to KRW 469 billion
• Increased interim dividend by KRW 200 to KRW 1,400 per share
• New KRW 300 billion share repurchase and cancellation program
• Strong 45.8% market share in domestic NGP segment
• First-half revenue exceeded KRW 3 trillion for first time

Negative

• Health functional foods segment showed modest operating profit of only KRW 6.2 billion
• Domestic economy experiencing downturn affecting performance

- 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 +α in share cancellation

SEOUL, South Korea, Aug. 7, 2025 /PRNewswire/ -- KT&G(KRX: 033780) held an earnings release conference call on the 7^th 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 8^th.

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."

View original content to download multimedia:https://www.prnewswire.com/news-releases/ktg-posts-revenue-and-profit-growth-3-quarters-in-a-rowstrong-shareholder-return-to-continue-in-h2-302524148.html

SOURCE KT&G Corporation

FAQ

What were KT&G's Q2 2025 earnings results?

KT&G reported Q2 2025 consolidated revenue of KRW 1.5479 trillion and operating profit of KRW 349.8 billion, representing YoY growth of 8.7% and 8.6% respectively.

How much is KT&G's new interim dividend for 2025?

KT&G increased its interim dividend by KRW 200 to KRW 1,400 per share to reinforce its high-dividend payout trend.

What is KT&G's share buyback plan for 2025?

KT&G plans to repurchase and cancel KRW 300 billion worth of treasury shares starting August 8, 2025, with additional repurchases planned for H2 2025.

What is KT&G's market share in the NGP segment?

KT&G achieved a 45.8% market share in the domestic Next Generation Products (NGP) segment during the first half of 2025.

What is KT&G's Value Up plan for 2024-2027?

KT&G's Value Up plan includes KRW 3.7 trillion in cash returns through dividends and share repurchases, plus cancellation of 20% of issued shares.