KT&G's Strong Global Cigarette Business Tows Q1 Revenue and Operating Profit Growth

Rhea-AI Summary

KT&G (KTCIY) reported strong Q1 2025 financial results, with consolidated revenue reaching 1.491 trillion KRW (up 15.4% YoY) and operating profit of 285.6 billion KRW (up 20.7% YoY). The company's global cigarette business achieved "triple growth" in operating profit, sales volume, and revenue for four consecutive quarters, with global business revenue increasing 53.9% to 449.1 billion KRW and operating profit surging 312.5% YoY.

The company's NGP business saw 6.5% YoY revenue growth in Korea, while the Health Functional Foods division grew 1.9% YoY. KT&G is executing a 3.7 trillion KRW shareholder return program (2024-2027), including cash dividends and stock repurchasing. In Q1 2025, the company cancelled treasury stocks worth 360 billion KRW, representing 2.5% of outstanding shares.

Positive

• Consolidated revenue grew 15.4% YoY to 1.491 trillion KRW
• Operating profit increased 20.7% YoY to 285.6 billion KRW
• Global cigarette business achieved 312.5% operating profit growth and 53.9% revenue growth
• Implementing substantial shareholder return program of 3.7 trillion KRW (2024-2027)
• Completed treasury stock cancellation worth 360 billion KRW in Q1 2025

Negative

• Domestic economy showing slowdown signs
• Facing hostile business conditions including sharp rise in foreign exchange rates

– Q1 consolidated revenue stands at 1.491 Trillion KRW, operating profit at 285.6 billion KRW, 15.4% and 20.7% YoY growth respectively

– 'Triple Growth' of operating profit, sales volume, and revenue in the global cigarette business, accelerates core business profitability-based growth

SEOUL, South Korea, May 8, 2025 /PRNewswire/ -- On the 8^th, KT&G(KRX: 033780) hosted an earnings call, announcing results for the first quarter of 2025.

KT&G reported a consolidated revenue of 1.491 trillion KRW and consolidated operating profit of 285.6 billion KRW, a year-on-year growth of 15.4% and 20.7% respectively. Revenue and operating profit both showed double-digit growth, while profit growth surpassed that of revenue, demonstrating the results of profitability-focused business management. 

In KT&G's main business, the cigarette business, revenue grew 15.3% YoY reaching 988 billion KRW and operating profit grew 22.4% reaching 252.9 billion KRW, resulting from the high growth of the global business. Price hikes and sales volume growth in major markets led to the global cigarette business's "triple growth" in operating profit, sales volume, and revenue for four consecutive quarters. The global business's operating profit soared with 312.5% growth and revenue rose 53.9% YoY to record 449.1 billion KRW, marking a new historic high in quarterly performance. 

The achievements resulted from CEO Kyung-man Bang's fully-local value chain strategy that was implemented since his inauguration last year. In addition, local infrastructure expansion such as the completion of the new factory in Kazakhstan last April, and the upcoming completion of the new Indonesian factory next year is expected to accelerate the growth of the global business even further.

The NGP business, with its flagship brand "lil Hybrid", saw a 6.5% YoY revenue growth in the Korean market. The Health Functional Foods (HFF) division, managed by KGC (Korea Ginseng Corporation), reported revenue growth of 1.9% YoY despite slowdown of the domestic economy owing to Korean holiday promotions and growth in major global markets. As the performance of development projects were reflected, the real estate division contributed to profitability improvements of the corporation, with revenue and operating profit reaching 100.4 billion KRW and 10.4 billion KRW.

Previously, KT&G announced shareholder return programs totaling 3.7 trillion KRW between 2024 and 2027 that includes cash dividends as well as stock repurchasing and cancellation of 20% or more of outstanding shares. Last year, KT&G made a total cash return of 1.1 trillion KRW, reaching 100% total shareholder return, while cancelling treasury shares equivalent to 6.3% of outstanding shares. In 2025, KT&G continues to implement its shareholder value improvement strategy, top-tier in the Korean market, and pursuing value-up programs in greater scale; in the first quarter, KT&G has completed the cancellation of treasury stocks amounting to 2.5% of outstanding shares worth approximately 360 billion KRW.

A KT&G spokesperson stated that "despite hostile business conditions such as a sharp rise in foreign exchange rates and a decelerating domestic economy, the company saw a mutual growth of revenue and operating profit by focusing on enhancing competitiveness of the core business profitability," further commenting that "the company will secure future growth momentum through increased global competitiveness and an expansion of business scope from cigarettes to 'Modern Products.'"

 

 

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SOURCE KT&G Corporation

FAQ

What were KT&G's (KTCIY) Q1 2025 financial results?

KT&G reported Q1 2025 consolidated revenue of 1.491 trillion KRW (up 15.4% YoY) and operating profit of 285.6 billion KRW (up 20.7% YoY).

How much did KT&G's global cigarette business grow in Q1 2025?

KT&G's global cigarette business achieved significant growth with operating profit up 312.5% and revenue increasing 53.9% YoY to 449.1 billion KRW.

What is KT&G's shareholder return program for 2024-2027?

KT&G announced a 3.7 trillion KRW shareholder return program for 2024-2027, including cash dividends and stock repurchasing with cancellation of 20% or more of outstanding shares.

How many treasury shares did KT&G cancel in Q1 2025?

In Q1 2025, KT&G cancelled treasury stocks worth approximately 360 billion KRW, representing 2.5% of outstanding shares.

How did KT&G's NGP and Health Functional Foods divisions perform in Q1 2025?

The NGP business saw 6.5% YoY revenue growth in the Korean market, while the Health Functional Foods division grew 1.9% YoY.