6 days ago
KT&G extends Q2 growth streak on robust global sales
KT&G, South Korea's leading tobacco manufacturer, has logged three consecutive quarters of revenue and profit growth through the second quarter, backed by strong demand in key global markets.
According to the company on Thursday, sales in the April-June period jumped 8.7 percent on-year to reach 1.55 trillion won ($1.12 billion), with operating profit surging 8.6 percent to 350 billion won.
Having sustained revenue and profit growth since the fourth quarter of last year, the company also reported that first-half revenue surpassed the 3 trillion won mark for the first time.
'We have secured mid- to long-term growth momentum based on the excellent performance of new product launches in major global markets as well as brand power-based price hikes,' a KT&G official said, adding that the company aims to achieve double-digit annual growth in operating profit this year.
KT&G's core tobacco segment sustained its growth trajectory, with revenue and operating profit rising by 10 percent and 1.6 percent on-year, respectively.
The global cigarette business, in particular, marked its fifth consecutive quarter of growth in revenue, profit and sales volume.
Revenue and volume both hit new quarterly records, with revenue up 30.6 percent on-year to 469 billion won and sales volume rising 9.1 percent to 16.7 billion sticks. Adjusted operating profit, excluding last year's allowance for doubtful account refunds, soared 51.1 percent.
Under the vision of CEO Bang Kyung-man, the company has prioritized full localization of its value chain and established smaller local units to respond more agilely to market needs. Cost reductions are expected in the second half of the year, once its raw material sourcing system is fully localized.
Outside its core tobacco business, the company's domestic next-generation products segment captured a 45.8 percent market share in the first half, driven by robust sales of its heat-not-burn device Lil Aible.
The health functional foods segment, operated by Korea Ginseng Corp., posted an operating profit of 6.2 billion, turning profitable as a result of optimized marketing spend and a focus on profitability-driven strategies.
