KT&G Achieves Highest Quarterly Revenue and Operating Profit Since Inception... Balanced Growth Across All Businesses

Domestic Cigarette Market Share at 64.9%, Highest in 10 Years
Overseas Cigarette Sales Up 30.9% YoY Due to Export Expansion in Key Markets like the Middle East
Ginseng Sales Slightly Decline Due to COVID-19 Impact

[Asia Economy Reporter Choi Sunghye] KT&G achieved the highest quarterly sales and operating profit in its history by showing balanced growth across all business sectors, including tobacco, overseas markets, and real estate, in the third quarter.

On the 5th, KT&G announced that its consolidated third-quarter sales and operating profit increased by 10.7% and 13.6%, respectively, reaching KRW 1.4634 trillion and KRW 434.6 billion, surpassing the third-quarter market consensus and delivering an earnings surprise.

KT&G’s Low-Odor Cigarettes Gain Popularity... Expansion of Exports to Overseas Markets

Based on KT&G’s individual performance, sales and operating profit were KRW 908.8 billion and KRW 353.6 billion, respectively, growing 25.6% and 24.1% compared to the same period last year. The strong performance was attributed to ▲① continued growth of domestic low-irritation and low-odor products ▲increased market share of NGP exclusive sticks ▲continued growth in overseas markets.

KT&G’s domestic cigarette sales volume reached 11.9 billion sticks, an 8.2% increase from the same period last year, and its market share based on exchange data rose by 0.9 percentage points to 64.9%. This was a result of sustained growth in low-irritation and low-odor products that meet consumer needs. Notably, KT&G’s third-quarter cigarette market share was 64.9%, higher than 64.1% in the fourth quarter of last year, marking the highest level recorded in the past decade.

Despite the stagnation in the electronic cigarette market due to increased demand for combustible cigarettes, KT&G’s ‘Lil Hybrid 2.0’ popularity and new products like ‘Fit Mix’ helped the exclusive stick market share reach 35.1% (based on CVS), showing an upward trend.

Third-quarter overseas cigarette sales volume increased by 30.9% year-on-year to 12.7 billion sticks, and sales rose by 28.2% to KRW 262.9 billion. Exports to key markets such as the Middle East expanded, driving sales, while overseas subsidiaries in the U.S. and Russia saw increased sales volume due to expanded distribution networks. KT&G plans to strengthen distribution and expand brand portfolios in major countries in the fourth quarter to broaden market base and actively develop new markets in Latin America and Africa, aiming to achieve exports to over 100 countries within the year.

In the real estate business, third-quarter sales and operating profit from leasing and sales businesses increased by 44.6% and 23.1% year-on-year, respectively, recording KRW 113.8 billion in sales and KRW 46.4 billion in operating profit.

KGC Ginseng Corporation Faces Delayed Sales Recovery Due to Sharp Decline in Overseas Travelers... Online Sales Increase

KGC Ginseng Corporation’s third-quarter sales decreased by 1.0% year-on-year to KRW 422.4 billion, while operating profit slightly increased by 1.6% to KRW 81.4 billion.

Domestic sales amounted to KRW 388.6 billion, down 0.5% from the same period last year. KGC Ginseng Corporation explained, "Although the impact of COVID-19 was minimized due to effective absorption of Chuseok gift demand, sales recovery in corporate channels including duty-free is delayed due to a sharp decline in overseas travelers and continued avoidance of crowded facilities." However, quick adaptation to the trend of preference for non-face-to-face channels led to increased sales in home shopping and online channels.

Overseas sales in the third quarter decreased by 6.1% year-on-year to KRW 33.8 billion. KGC Ginseng Corporation stated that to minimize the impact of COVID-19, they strengthened online-centered marketing and the development of customized strategic products, which increased local actual consumption. On the other hand, overall consumption declined due to continued closure of face-to-face channels in Greater China, travel bans, and difficulties in operating overseas duty-free shops.

This content was produced with the assistance of AI translation services.