KT&G posted record earnings in the third quarter, driven by growth in its overseas tobacco business. With revenue exceeding 5.3 trillion won in the first nine months of the year, the company is targeting its first-ever annual revenue of 7 trillion won. It also announced plans to return more than 5 trillion won to shareholders over the next four years.
According to the Financial Supervisory Service's electronic disclosure system on Thursday, KT&G's consolidated revenue for the third quarter this year was 1.9052 trillion won, up 4.3% from the same period last year. Operating profit rose 13.9% to 530.1 billion won. Both revenue and operating profit marked record-high quarterly figures.
Cumulative revenue through the third quarter this year reached 5.3104 trillion won, while cumulative operating profit stood at 1.3091 trillion won, both setting all-time highs on a cumulative basis. KT&G projected that it would record annual revenue of 7 trillion won and operating profit of 1.5 trillion won for this year.
The overseas tobacco business led the earnings growth. Revenue from the tobacco division in the third quarter was 1.3065 trillion won, a 6% increase from the same period last year, while operating profit rose 14.4% to 425.5 billion won. The operating profit margin increased by 2.4 percentage points year-on-year to 32.6%. In particular, the overseas cigarette business saw increases in sales volume, revenue, and operating profit for the 10th consecutive quarter.
The next-generation products (NGP) business, including heated tobacco devices, maintained its No. 1 market share domestically. The rising proportion of high-priced stick sales contributed to improved profitability. Subsidiary KGC's health functional food business also posted third-quarter revenue of 372.2 billion won and operating profit of 80.1 billion won, up 3.4% and 12.2%, respectively.
On this day, KT&G held a 'Capital Markets Day' and unveiled its new medium- to long-term shareholder return plan. The company plans to expand its annual dividend per share to 8,000 won, a 33.3% increase from last year, and raise the payout ratio from its current level of around 60% to over 75% by 2030. It will pursue total shareholder returns of 5 trillion won, including dividends, by buying back and canceling treasury shares worth 1.2 trillion won over the next four years starting next year.
The medium- to long-term growth strategy also focused on expanding overseas operations. KT&G plans to push for strategic price increases and expand the sales share of premium cigarette products abroad, while targeting new markets such as 30 countries where it has not yet entered. The company also set a goal to cut costs by more than 550 billion won cumulatively over four years starting in 2027 by optimizing its global production network, including a new factory in Indonesia that was completed last October.
In addition, the NGP business will expand overseas entry through independent local direct operations, in addition to its existing global partnership with PMI (Philip Morris International). Through this, the company plans to raise the share of overseas revenue in the cigarette business to over 70% and the share of NGP revenue within the tobacco business to over 30% by 2030. It also aims to increase the share of overseas revenue in the health functional food business to over 30%.
KT&G President Bang Kyung-man said, "Through the advancement and global expansion of our overseas cigarette, NGP, and health functional food businesses, we will achieve profitability-focused growth rather than mere revenue expansion." He added, "Based on sustained profit growth, we will enhance shareholder value through world-class shareholder returns."
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