"KT&G Soars Overseas, Records Highest Ever Q3 Sales (Comprehensive)"

Sales of 1.6885 trillion KRW... Quarterly Record High
Overseas Cigarette Sales 14.8 Billion Units... 21% Increase YoY
Double-Digit Growth in Domestic and Overseas NGP Stick Sales

KT&G posted solid results in the third quarter of this year, driven by the growth of its overseas cigarette business. The heated tobacco product business, a mid- to long-term growth engine, also continued its strong growth and contributed to the performance.

KT&G announced on the 9th that its consolidated operating profit for the third quarter of this year was tentatively estimated at 406.7 billion KRW, a 0.3% increase compared to the same period last year. Sales for the same period reached 1.6895 trillion KRW, up 4.0% year-on-year, marking a quarterly record high. Net profit was 333.3 billion KRW, down 28.0% compared to the same period last year.

The strong third-quarter performance was driven by the tobacco business division, centered on overseas cigarettes. The tobacco business division's sales in the third quarter were 972.7 billion KRW, a 3% increase year-on-year, and operating profit rose 0.6% to 269.4 billion KRW. In particular, the increase in volume and sales of the overseas cigarette business was significant. With both exports and sales volume of overseas subsidiaries growing together, the total overseas cigarette volume reached 14.82 billion sticks, a 21% increase compared to the same period last year. Due to volume growth, sales rose 26.3% year-on-year to 321.6 billion KRW.

The domestic and overseas NGP (Next Generation Products, electronic cigarettes) business division also continued its double-digit growth with increased stick sales volume. Domestic stick sales volume was 1.45 billion sticks, and overseas stick sales volume was 2.03 billion sticks, up 13.3% and 22.3% respectively compared to the same period last year, maintaining strong double-digit growth.

In the third quarter, KT&G focused on performance growth by strengthening the global competitiveness of its future core businesses. To this end, in September, it held an investment support agreement ceremony with the Indonesian investment department for the construction of a new factory, and last month, it broke ground on a hybrid new factory in Kazakhstan that produces global cigarettes and NGPs. Additionally, on the 1st of this month, KT&G announced the expansion of its Sintanjin NGP factory, accelerating its global market penetration of core businesses.

Meanwhile, on the 13th, KT&G plans to hold a separate online conference through ‘Value Day 2023’ to discuss mid- to long-term shareholder return policies and financial strategies beyond 2024. Earlier, in accordance with the mid- to long-term shareholder return policy announced in 2021, KT&G completed the purchase of about 300 billion KRW (3.47 million shares) of treasury stock during the third quarter and immediately canceled all acquired shares. It also conducted an interim dividend for the first time since its founding, making efforts to enhance shareholder value.

A KT&G official stated, “In the third quarter, we expanded the foundation for mid- to long-term growth by continuing to restructure our business portfolio centered on global operations. We will continue to do our best to strengthen future competitiveness and enhance corporate value through the successful implementation of the ‘Business Transformation’ strategy.”