KT&G Reports 27.6% Increase in Q1 Operating Profit Driven by Overseas Sales

KT&G achieved double-digit growth in both revenue and operating profit in the first quarter of this year, driven by record overseas sales. The company plans to enhance shareholder returns with a significant stock buyback and increased dividends in the second half of the year.
 
During an investor relations meeting on May 7, KT&G reported that its consolidated operating profit for Q1 2026 rose 27.6% year-on-year to 364.5 billion won. Revenue increased by 14.3% to 1.7036 trillion won. The tobacco division's revenue reached 1.1559 trillion won, a 17% increase, while operating profit grew 27.2% to 321.6 billion won.
 
The overseas tobacco business saw sales rise evenly across key regions, including Asia-Pacific and Eurasia, with Q1 revenue hitting 559.6 billion won, a 24.6% increase and a quarterly record. Cost reductions also contributed to a 56.1% surge in operating profit, marking a "triple growth" in revenue, operating profit, and sales volume.
 
This trend is reflected in annual figures as well. Last year, KT&G's overseas tobacco sales reached 1.8775 trillion won, a 29.4% increase, with global sales surpassing domestic sales for the first time at 54.1%. KT&G CEO Bang Kyung-man highlighted this achievement at the shareholders' meeting, stating, "The overseas tobacco business has surpassed the Korean market, marking a historic milestone for KT&G as it transforms into a global leader."
 
In the domestic market, KT&G maintained a 68.8% market share in the cigarette sector. The next-generation product (NGP) segment saw sales grow 51.5% year-on-year to 241 billion won, benefiting from both domestic and international growth and a rebound from last year's supply chain issues. KT&G plans to continue launching new products throughout the year to strengthen its market leadership.
 
KT&G aims to leverage its competitive edge in the overseas tobacco business to expand its NGP products globally. The company is preparing to increase its direct entry into the heated tobacco market, utilizing its established distribution networks and expertise in key regions. Following the launch of its Kazakhstan factory, a new facility in Indonesia is set to begin operations in the first half of the year, accelerating its overseas production capabilities.
 
In the health supplements division, KGC reported a 5.8% increase in revenue to 332.6 billion won, driven by successful promotions during the Lunar New Year and effective brand campaigns for products like Cheongnok and Everytime. Operating profit rose 53.3% to 27.9 billion won due to expanded high-margin sales channels and a focus on profitability.
 
KT&G is also entering the global nutrition market, having established a dedicated center to promote ginseng raw materials for B2B transactions with global food and cosmetics companies, diversifying its international business.
 
The company is enhancing shareholder returns, having completely retired 10,866,189 shares (9.5% of total issued shares, valued at approximately 1.8516 trillion won) on April 23. This move exceeded its stock buyback target for 2024-2027 ahead of schedule. In the second half of the year, KT&G plans to announce a new shareholder return policy focused on increasing dividends.
 
KT&G Senior Vice President Lee Sang-hak stated, "Despite uncertainties in the external environment due to geopolitical issues in the Middle East, we expect stable revenue growth across all regions, including Asia-Pacific, Eurasia, and new markets, to continue for our overseas tobacco business." He added that the company would pursue ongoing shareholder return policies, including dividend increases, based on its performance growth from global expansion.