KT&G’s global cigarette sales boost Q1 earnings

KT&G reported strong first-quarter earnings Wednesday, driven by robust performance in its global cigarette business.

KT&G CEO Bang Kyung-man

The company reported consolidated revenue of 1.49 trillion won ($1.06 billion) and an operating profit of 285.6 billion won, up 15.4 percent and 20.7 percent year-on-year, respectively. Operating profit grew faster than revenue, underscoring KT&G’s profitability-focused management strategy.

Revenue from KT&G’s core cigarette business rose 15.3 percent to 988 billion won, while operating profit increased 22.4 percent to 252.9 billion won. Overseas operations were the main driver, with price increases and higher sales volumes leading to “triple growth” in revenue, volume and profit for the fourth consecutive quarter.

The global cigarette segment recorded a 312.5 percent surge in operating profit and a 53.9 percent increase in revenue, reaching 449.1 billion won — a record-high quarterly figure.

KT&G attributed the results to its localized value chain strategy under CEO Bang Kyung-man, who took office last year. The company also highlighted the completion of a new manufacturing plant in Kazakhstan in April and announced that a second factory in Indonesia is scheduled to open next year.

The next-generation product segment, led by the lil Hybrid brand, grew 6.5 percent in domestic revenue. Meanwhile, KT&G’s health functional foods unit, run by Korea Ginseng Corp., posted a 1.9 percent gain, buoyed by holiday promotions and overseas sales despite domestic headwinds.

The real estate division also contributed, with revenue and operating profit of 100.4 billion won and 10.4 billion won, respectively, helped by project gains.

KT&G reaffirmed its shareholder return program worth 3.7 trillion won through 2027, including dividends, buybacks and the cancellation of at least 20 percent of outstanding shares. In the first quarter of 2025, the firm canceled treasury shares worth 360 billion won, or 2.5 percent of shares outstanding.

“Despite challenges such as rising foreign exchange rates and a slowing domestic economy, KT&G achieved simultaneous growth in revenue and profit,” a company spokesperson said, adding the firm will continue expanding beyond traditional tobacco products.