Korean cigarette company logs W1.7tr in sales, W365b in operating profit in Q1

KT&G's logo (KT&G)
KT&G's logo (KT&G)

KT&G said Thursday it has posted 1.7 trillion won ($1.17 billion) in sales and 364.5 billion won in operating profit in the first quarter of this year, up 14.3 percent and 27.6 percent year-on-year, respectively, as its global cigarette business turned in record figures.

According to KT&G, its global cigarette business saw a balanced growth in sales volume growth throughout major markets including the Asia-Pacific and Eurasian regions. Global cigarette revenue reached 559.6 billion won in the first quarter, up 24.6 percent from the same period last year.

KT&G said it planned to use its global cigarette business capabilities and distribution networks to speed up entry into global markets with its next-generation products, such as heat-not-burn products. Its business in next-generation products logged 241 billion won in the first quarter sales, up 51.5 percent from the same period last year, thanks to growth in both at home and overseas.

KT&G will roll out new products throughout the year. The Korean cigarette maker noted that its domestic market share in next-generation products stood at about 68.8 percent, maintaining its dominance at home.

Meanwhile, KT&G’s wholly owned subsidiary KGC and its health functional foods business generated 332.6 billion won in sales, up 5.8 percent on year while its operating profit rose 53.3 percent from the same period last year to post 27.9 billion won based on revenue expansions in high-profit channels and profitability-focused strategies.

KT&G added that it aims to continue investing in its own global nutrition business as it already had established a dedicated center earlier this month with a goal to pursue red ginseng ingredient business-to-business projects by targeting global companies in food & beverage, cosmetics and other sectors.

“Despite uncertainties due to geopolitical issues in the Middle East, stable revenue growth trend has continued in all regions including Asia-Pacific, Eurasia and new markets, leading to projections of a sustained growth of the global cigarette business,” said Lee Sang-hak, chief financial officer at KT&G.

“Based on the performance growth from global business expansion, the company will continue to implement new shareholder return policies including dividend reinforcement and improve shareholder value.”


hwkan@heraldcorp.com