KT&G Hits Jackpot with Overseas Business... Q1 Sales Reach 1.7 Trillion Won

First Quarter Operating Profit Reaches 364.5 Billion Won, Up 27%
Tobacco Division Sales Hit 1.1559 Trillion Won
"Balanced Growth in Asia-Pacific and Eurasia... Achieves 'Triple Growth'"

KT&G recorded consolidated sales of 1.7036 trillion won in the first quarter, representing a 14.3% increase compared to the same period last year.

On May 7, KT&G announced that its operating profit for the first quarter of this year reached 364.5 billion won, up 27.6% year-on-year. Sales from the tobacco business division were 1.1559 trillion won, a 17% increase over the same period last year, and operating profit in this segment jumped 27.2% to 321.6 billion won.

In particular, the overseas cigarette business saw balanced growth in sales volume across key regions such as Asia-Pacific and Eurasia, and continued its strategic price increases, achieving the highest-ever quarterly sales. First-quarter sales in this segment were 559.6 billion won, up 24.6% year-on-year, and operating profit surged 56.1% compared to the first quarter of last year thanks to reductions in cost of goods sold and selling and administrative expenses. As a result, sales, operating profit, and sales volume all increased, marking 'triple growth'.

Domestically, KT&G maintained a dominant market share of 68.8% in the cigarette business. Sales from the Next Generation Products (NGP, electronic cigarettes) business grew by approximately 51.5% year-on-year to 241 billion won, driven by both domestic and overseas growth trends and a base effect from last year's overseas device supply chain issues. KT&G plans to further solidify its market leadership in NGP products by continuously launching new products throughout the year.

Additionally, KT&G intends to leverage its strong competitiveness in the overseas cigarette direct sales business to accelerate independent global market entry for its NGP products. The company aims to establish a foundation for expanding direct entry into the heated tobacco device market by utilizing the know-how and distribution networks accumulated in key regions such as Asia-Pacific and Eurasia, where it has achieved meaningful results in the overseas tobacco market.

Furthermore, sales in the health functional food business division of KGC rose 5.8% year-on-year to 332.6 billion won, driven by successful Lunar New Year promotions in Korea and the positive impact of brand campaigns for products such as 'Cheonnok' and 'Everytime'. Operating profit in this segment increased 53.3% year-on-year to 27.9 billion won, thanks to the expansion of high-margin channel sales and a profitability-focused strategy.

On April 23, KT&G preemptively reflected the intent of the 3rd Commercial Act Amendment by canceling all of its 10,866,189 treasury shares (equivalent to 9.5% of total shares issued, worth approximately 1.8516 trillion won). With this cancellation, KT&G has already exceeded its treasury share cancellation target under its corporate value enhancement plan for both 2024 and next year ahead of schedule. Consequently, the company plans to announce a new shareholder return policy centered on enhanced dividends for the second half of the year.

Lee Sanghak, Senior Vice President of KT&G, stated, "Despite the high level of external uncertainty due to geopolitical issues in the Middle East, we are seeing continued stable sales expansion across all regions, including Asia-Pacific, Eurasia, and new markets. As a result, the growth trend in our overseas cigarette business is expected to continue throughout the year. Based on performance growth driven by our global business expansion, we will continue to pursue new shareholder return policies such as enhanced dividends and strive to increase shareholder value."

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