KT&G Successfully Improves Profitability in First Year of New Leadership, Promises Active Shareholder Returns

Rhea-AI Summary

KT&G reported strong financial results for 2024, with consolidated revenue reaching KRW 5.91 trillion (up 0.8% YoY) and operating profit of KRW 1.185 trillion (up 1.5% YoY). Under new CEO Kyung-man Bang's leadership, the tobacco segment showed impressive growth with revenue of KRW 3.906 trillion (up 8.1%) and operating profit of KRW 1.082 trillion (up 10.7%).

The company's global cigarette sales achieved a 10.3% YoY growth, with revenue reaching a record KRW 1.45 trillion. The Next Generation Product segment also showed positive trends, with domestic stick sales of 6.15 billion (up 7.7%) and global sales of 8.34 billion (up 1.5%).

KT&G announced significant shareholder returns, including immediate cancellation of treasury shares worth KRW 360 billion, planned share repurchases of KRW 300 billion, and total shareholder returns of KRW 1.1 trillion or higher for 2025. The company achieved a 12.2% ROE in 2024 and set growth targets of 5%+ for revenue and 6%+ for operating profit in 2025.

Positive

• Record full-year revenue of KRW 5.91 trillion (up 0.8% YoY)
• Operating profit growth of 1.5% to KRW 1.185 trillion
• Tobacco segment operating profit up 10.7% to KRW 1.082 trillion
• Global cigarette sales volume up 10.3% YoY
• ROE improved to 12.2% (up 2.3 percentage points)
• Announced KRW 1.1 trillion shareholder return plan for 2025
• Increased annual dividend to KRW 5,400 per share

Negative

• None.

• New CEO's fundamental competitiveness improvement and financial structure optimization leads to parallel growth of full-year revenue and operating profit 
• 100% total shareholder return and 12.2% ROE in 2024, Active shareholder returns of 1.1 trillion or more for 2025

SEOUL, South Korea, Feb. 6, 2025 /PRNewswire/ -- 

KT&G Corporation ("KT&G" or the "Company") (KRX: 033780), South Korea's leading tobacco manufacturer, announced its 2024 fourth-quarter and full-year results in an earnings report session held on the 6^th of Feb., also presenting its 2025 business goals and shareholder return plans.

KT&G reported consolidated revenue of KRW 1.557 trillion and operating profit of KRW 208.5 billion in the fourth quarter, an 8.0% and 5.3% growth year on year, respectively. KT&G also reported record full-year revenue of KRW 5.91 trillion, a 0.8% growth year on year, while operating profit grew 1.5% and reached KRW 1.185 trillion.

After the new CEO, Kyung-man Bang, took office in March 2024, KT&G achieved balanced growth by increasing fundamental competitiveness and optimization of financial structure. The tobacco segment saw a revenue of KRW 3.906 trillion and operating profit of KRW 1.082 trillion, a respective YoY growth of 8.1% and 10.7%. The continued growth of global sales volume and effective pricing strategies combined led to such results.

The annual global cigarette segment sales, focused on KT&G's flagship brand ESSE, achieved a 10.3% growth YoY and an all-time high sales volume. The annual revenue also grew by 28%, resulting in historical high of KRW 1.45 trillion. Qualitative growth was realized, including 84.2% operating profit growth.

The Next Generation Product (NGP) segment continued to show growth trends, with stick sales volume going up in both domestic and global markets. In 2024, KT&G sold 6.15 billion sticks in the domestic market and 8.34 billion sticks in the global market, which is equivalent to YoY growth of 7.7% and 1.5%, respectively.

KT&G plans to continue boosting its performance in 2025 through heightened competency of its tobacco segment; increased efficiency through an economic manufacturing system; and financial optimization focusing on profitability. Accordingly, KT&G has set growth targets of 5% or higher for consolidated revenue and 6% or higher for operating profit.

Furthermore, KT&G decided to immediately cancel treasury shares worth approx. KRW 360 billion (approx. 2.5% of total issued shares). Within the year, KT&G plans to repurchase and cancel shares worth KRW 300 billion or more and utilize the funds from the liquidation of non-core assets to cancel a total of at least 4.5% of treasury stock. KT&G is planning shareholder returns of KRW 1.1 trillion or higher, which includes a KRW 600 billion dividend payout.

Furthermore, the board resolved to set the 2024 year-end dividend at KRW 4,200 per share, while setting the record date as February 28^th. The annual dividend per share including the interim dividend of KRW 1,200 previously paid is KRW 5,400, up KRW 200 from the previous year. In 2024, KT&G moved the record date from the end of the year to date determined by the board. This decision was made to allow investors to acquire shares after confirming the dividend. KT&G intends to continue the growing dividend payout trend in 2025.

After CEO Kyung-man Bang took office, KT&G revealed its Corporate Value-up Plan to be implemented between 2024 and 2027. The plan includes a cash return of approx. KRW 3.7 trillion, which is composed of total cash dividend of KRW 2.4 trillion and stock repurchases worth KRW 1.3 trillion, and cancellation of 20% or more of issued shares comprising of newly acquired and treasury shares. To fulfill the corporate value-up plan, KT&G executed approx. KRW 1.1 trillion cash returns in 2024 through repurchase of stocks worth KRW 550 billion and dividend payout of KRW 590 billion, achieving 100% total shareholder returns. KT&G also canceled stocks amounting to 6.3% of total issued shares including 3.7% newly repurchased stocks (worth approx. KRW 550 billion) and 2.6% already held by the company (worth approx. KRW 310 billion). KT&G's ROE of 12.2%, a 2.3%p YoY growth, can be attributed to enhanced profitability and capital efficiency.

A KT&G spokesperson said that, "In 2024, KT&G saw meaningful growth of revenue and operating profit that can be attributed to the growth of the company's major business area, the tobacco business. Despite the heightened uncertainty in both domestic and global markets in 2025, KT&G will continue the upward performance trend by strengthening our fundamental competitiveness based on our global business while executing the finest shareholder return programs to provide greater value for our shareholders."

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SOURCE KT&G Corporation

FAQ

What are KT&G's (KTCIY) financial results for full-year 2024?

KT&G reported record full-year revenue of KRW 5.91 trillion (up 0.8% YoY) and operating profit of KRW 1.185 trillion (up 1.5% YoY) in 2024.

How much is KT&G's shareholder return plan for 2025?

KT&G plans to return at least KRW 1.1 trillion to shareholders in 2025, including KRW 600 billion in dividends and share repurchases worth KRW 300 billion or more.

What is KT&G's dividend per share for 2024?

KT&G's total dividend for 2024 is KRW 5,400 per share, consisting of KRW 4,200 year-end dividend and KRW 1,200 interim dividend, an increase of KRW 200 from the previous year.

What was KT&G's global cigarette sales growth in 2024?

KT&G's global cigarette segment achieved a 10.3% year-over-year growth in sales volume and a 28% increase in revenue, reaching KRW 1.45 trillion.

What are KT&G's growth targets for 2025?

KT&G has set targets of 5% or higher growth for consolidated revenue and 6% or higher growth for operating profit in 2025.