KT&G's Q4 net falls 15.7% on reduced FX gains
KT&G headquarters in Seoul / Korea Times file
KT&G, Korea's leading tobacco company, said Thursday its fourth-quarter net profit fell 15.7 percent from a year earlier, due to reduced foreign-exchange valuation gains.
Net profit for the three months ended in December declined to 274.2 billion won ($186.9 million) from 325.1 billion won a year earlier, the company said in a regulatory filing.
"Foreign-exchange valuation gains declined in the fourth quarter from a year earlier as the won strengthened against the dollar during the period," a company spokesperson said.
The dollar stood at 1,434.90 won at the end of December, down from 1,470 won a year earlier, according to data from the Bank of Korea. A stronger won reduces the value of dollar-denominated earnings when converted into the local currency.
Operating profit rose 17 percent to 248.8 billion won in the December quarter from 212.5 billion won a year earlier, while sales increased 10.1 percent to 1.71 trillion won from 1.56 trillion won.
For the full year, net income fell 6.1 percent to 1.09 trillion won from 1.16 trillion won the previous year. Operating profit rose 13.5 percent to 1.35 trillion won from 1.19 trillion won, and annual revenue climbed 11.4 percent to 6.58 trillion won from 5.9 trillion won.
KT&G said overseas tobacco sales jumped 29 percent year-on-year to 1.9 trillion won in 2025, accounting for 54 percent of total tobacco sales, supported by double-digit growth in both sales volumes and average selling prices.
It marked the first time the company's overseas tobacco sales exceeded domestic sales.
KT&G has expanded overseas production facilities to boost local sales while reducing its reliance on exports, Chief Financial Officer Lee Sang-hak said, adding that these efforts helped lift the overseas sales ratio above 50 percent.
"We will continue to strengthen our overseas business capabilities and explore new markets to drive future growth and enhance shareholder returns," he added.
KT&G currently operates tobacco manufacturing plants in five countries — Korea, Russia, Turkey, Indonesia and Kazakhstan.
As part of its strategy to expand its next-generation product (NGP) business, KT&G plans to enter the nicotine pouch market this year following its acquisition of Swedish nicotine pouch maker Another Snus Factory last year.
The NGP business includes heat-not-burn (HNB) products and health functional food products. HNB products are electronic devices that heat tobacco without combustion, producing an aerosol rather than smoke.
Looking ahead, KT&G said it aims to achieve operating profit growth of 6 to 8 percent in 2026 on sales growth of 3 to 5 percent.