KT&G will buy back and cancel shares worth 360 billion won.
On September 22, KT&G's board of directors decided to repurchase and cancel 2.07 million shares to enhance shareholder value, amounting to approximately 360 billion won, which represents about 2% of the total issued shares.
The company plans to begin the buyback on September 23 and will cancel all acquired shares immediately after the purchase is completed. This action is part of KT&G's plan announced in February to buy back and cancel over 300 billion won worth of shares.
Previously, in April, KT&G canceled all of its 18 trillion won worth of treasury shares. As a result, the company has already exceeded its target of canceling 20% of the total issued shares by 2023, as outlined in its medium-term shareholder return plan announced in November 2024.
According to KT&G's semi-annual report, the treasury shares canceled in April totaled 10,866,189 shares. This brings the cumulative share cancellation to 22.4% of the total issued shares as of the end of 2023, surpassing the original target and prompting the additional buyback and cancellation.
The expansion of shareholder returns is attributed to improved performance. For the first half of this year, KT&G reported consolidated sales of 3.4052 trillion won and operating profit of 779 billion won, marking increases of 12.0% and 22.6%, respectively, compared to the same period last year. Growth in overseas cigarettes and next-generation tobacco (NGP) businesses drove this performance.
The company has also increased its interim dividend, setting it at 2,000 won per share, up 600 won from last year's 1,400 won. KT&G plans to announce a new medium-term shareholder return policy focused on enhancing dividends in the fourth quarter.
During the second quarter earnings announcement last month, KT&G reaffirmed its plans for a new shareholder return policy in the fourth quarter and its intention to continue share buybacks and cancellations in the second half.
Alongside the expansion of shareholder returns, foreign institutional investors are increasing their stakes. Capital Group holds 8.22% of KT&G shares, while BlackRock owns 6.15%.
A KT&G representative stated, "We decided to proceed with this share buyback and cancellation to enhance the predictability of our shareholder return policy and to build trust in the capital markets and increase per-share value. We will continue to strive to enhance shareholder value by establishing a virtuous cycle of performance growth and expanded shareholder returns."
* This article has been translated by AI.
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