KT&G has achieved its highest-ever first-half revenue, driven by strong overseas performance and growth in its next-generation tobacco (NGP) business. The company reported double-digit year-on-year growth in operating profit for four consecutive quarters. Additionally, it has raised its annual revenue and operating profit forecasts and increased its interim dividend to 2,000 won per share.
On August 6, KT&G announced that its consolidated operating profit for the second quarter reached 414.5 billion won, an 18.5% increase from the same period last year. Revenue rose to 1.7 trillion won, up 9.9% year-on-year, while net profit surged 152.3% to 362.1 billion won.
The company has adjusted its revenue forecast from a previous range of 3-5% to 5-7%, and its operating profit forecast from 6-8% to 10-13%, reflecting a positive outlook for the year.
The core tobacco business was the main driver of overall performance, with second-quarter tobacco sales reaching 1.22 trillion won, an 11.7% increase compared to the previous year. Operating profit from this segment rose 18.8% to 382.5 billion won.
Overseas sales of cigarettes increased by 18.9% to 557.7 billion won, benefiting from expanded sales volume and strategic price increases, which boosted operating profit by 45.6%. In the domestic market, KT&G held a 67.9% share in the first half of the year.
The NGP business also continued its growth trajectory, with second-quarter sales reaching 242.7 billion won, a 23.8% increase year-on-year. The successful launch of the 'lil Able 3.0' in February contributed to a higher proportion of premium stick sales, improving both revenue and profitability. KT&G's market share in the domestic NGP sector was recorded at 48.2%.
Looking ahead, KT&G plans to diversify its product lineup by launching new NGP products incorporating advanced technologies in the second half of the year. The company aims to expand its device and stick offerings to increase its domestic market share and strengthen its growth foundation in overseas NGP markets.
KGC's health supplement business saw improved profitability due to a recovery in domestic sales and the expansion of high-margin sales channels. Domestic sales increased by 7.8% to 174.2 billion won, aided by promotional events linked to the month of family gatherings and high oil price relief funds, as well as the impact of campaigns for 'Waiting for Agarwood' and 'Everytime'.
However, overseas sales were affected by inventory adjustments in China, decreasing by 9.4 billion won to 49.6 billion won compared to the previous year. Nonetheless, the health supplement business's operating profit rose 61.3% to 10 billion won due to increased sales from high-margin channels.
KT&G also announced an increase in dividends. The board of directors decided to raise the interim dividend to 2,000 won per share, up 600 won from last year's 1,400 won. The company is also considering further increasing the year-end dividend based on profit growth and cash generation capacity.
In 2025, KT&G's annual dividend per share was 6,000 won, and the company previously announced plans to distribute approximately 2.4 trillion won in dividends from 2024 to 2027. In April, it completed the cancellation of 10,866,189 shares of its own stock.
KT&G plans to announce a new long-term shareholder return policy, which includes dividend expansion, in the fourth quarter. The company will also proceed with its previously planned share buyback and cancellation in the second half of the year.
Lee Sang-hak, Senior Vice President of KT&G, stated, "The significant increase in operating profit from overseas operations and the strong growth momentum in the domestic NGP sector have led to a simultaneous rise in revenue and operating profit. Based on this profit growth, we will continue to pursue shareholder return policies such as high dividends and share buybacks to enhance shareholder value."
* This article has been translated by AI.
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