Overseas Cigarette Demand Growth and Core Business Expansion
Additional Share Buyback of 150 Billion KRW Within the Year
Enhancing Corporate Value with ROE Target of 15% by 2027
KT&G's operating profit slightly increased in the third quarter due to strong sales of overseas cigarettes.
KT&G announced on the 7th that its consolidated operating profit for the third quarter of this year was tentatively estimated at 415.7 billion KRW, a 2.2% increase compared to the same period last year. Sales amounted to 1.6363 trillion KRW, down 3.1% year-on-year, and net profit decreased by 28% to 239.9 billion KRW.
Growth centered on the core business continued in the third quarter as well. Sales from the company’s three core businesses?overseas cigarettes, NGP (Next Generation Products, such as e-cigarettes), and health functional foods?exceeded 1 trillion KRW. This is the highest quarterly sales ever recorded for these business units. The tobacco business division’s sales also reached 1.0478 trillion KRW, up 7.7% compared to the same period last year, setting a new quarterly record. Operating profit grew by 23.6% to 333 billion KRW.
Within the tobacco business division, the growth of the overseas cigarette business was particularly notable. Third-quarter sales of the overseas cigarette business reached 419.7 billion KRW, a 30.5% increase year-on-year, marking the highest sales for two consecutive quarters. Volume and operating profit also rose by 10.1% and 167.2%, respectively, achieving a 'triple growth' with simultaneous increases in volume, sales, and operating profit.
KT&G also announced the 'KT&G Corporate Value Enhancement Plan,' which aims to achieve a 15% ROE (Return on Equity) by 2027, along with expanding cash returns and share buybacks.
Earlier, after President Bang Kyung-man took office in March, KT&G has focused on strengthening its fundamental global competitiveness centered on global markets and enhancing the group’s financial structure to leap to a 'global top-tier' company. In particular, the group’s ROE enhancement project, which prioritizes profitability improvement, asset efficiency, and financial optimization as its three pillars, is being actively pursued. Based on this, the company plans to achieve a 15% ROE by 2027.
Shareholder returns will also be expanded. On this day, KT&G’s board of directors resolved to use approximately 150 billion KRW from the liquidity of non-core and low-profit assets to purchase and retire 1.35 million shares of treasury stock within the year.
A KT&G official stated, "The creation of results from strengthening the core business structure and advancing the financial structure for the leap to a global top-tier company is now in full swing. Going forward, we will continue to focus resources and capabilities on the three core businesses to strengthen fundamental competitiveness, and by returning the fruits of these achievements to shareholders, we plan to strive for true value-up where corporate value and shareholder value grow together."
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