KT&G achieved record first-half revenue, driven by growth in its overseas cigarette business and next-generation products (NGP). With operating profit maintaining double-digit growth for four consecutive quarters, the company raised its annual earnings forecast and strengthened shareholder return policies, including dividends.
KT&G said on the 6th that its second-quarter consolidated operating profit rose 18.5% year-on-year to 414.5 billion won. Revenue over the same period grew 9.9% to 1.7016 trillion won, setting a record high for a first-half period. Based on the improved results, the company raised its annual guidance, lifting its revenue growth forecast to 5-7% from the previous 3-5% and its operating profit growth forecast to 10-13% from 6-8%.
The tobacco business led the growth. Revenue from the tobacco division rose 11.7% year-on-year to 1.2185 trillion won, while operating profit increased 18.8% to 382.5 billion won. The overseas cigarette business showed particularly strong growth. Overseas cigarette revenue rose 18.9% to 557.7 billion won, and operating profit surged 45.6% as expanded sales volume combined with the effect of price adjustments. The domestic cigarette business also maintained its leading position with a 67.9% market share in the first half.
The next-generation products (NGP) business also continued to grow. Strong sales of "lil ABLE 3.0," launched in February, expanded the share of high-priced products, lifting NGP revenue 23.8% to 242.7 billion won. Its domestic market share reached 48.2%, maintaining the No. 1 position. KT&G plans to expand its product lineup by launching additional products applying new technology during the second half.
KGC, which handles the health functional food business, saw domestic revenue rise 7.8% to 174.2 billion won, supported by Family Month promotions linked to government subsidies and brand campaigns for "Everytime" and "Gidarim Chimhyang." Overseas revenue, however, fell by 9.4 billion won to 49.6 billion won due to distribution inventory adjustments in China. As the share of high-margin channels expanded, operating profit in the health functional food division rose 61.3% to 10 billion won.
Buoyed by these strong results, KT&G is strengthening its shareholder return policy. It first decided to raise its interim dividend to 2,000 won this year from 1,400 won last year. The company also plans to review an increase in its year-end dividend in line with profit growth. Following the complete cancellation of its treasury shares in April this year under the "2024-2027 Corporate Value Enhancement Plan" announced in 2023, it will proceed as scheduled with new treasury share purchases and cancellations in the second half. It also plans to unveil a new mid- to long-term shareholder return policy in the fourth quarter.
Lee Sang-hak, senior executive vice president of KT&G, said, "Improved profitability in the overseas business and growth in the domestic NGP business drove the results," adding, "Based on sustained profit growth, we will steadily pursue shareholder return policies such as dividend expansion and treasury share purchases and cancellations to enhance corporate value."
