KT&G Reports Consistent Quarterly Expansion for Three Consecutive Periods
KT&G Achieves Triple Growth in Global Cigarette Segment
In a remarkable turn of events, South Korean tobacco giant KT&G has reported a staggering 30.6% year-on-year increase in revenue for its global cigarette segment in Q2 2025. This growth, which marks a significant boost in sales revenue, operating profit, and sales volume, is the highest ever recorded by the company [1][4][5].
The growth can be attributed to several factors. The launch of new competitive products centering on the "Essé" brand has boosted appeal in overseas markets [4]. Increased market share and stronger brand power in key regions such as Asia-Pacific, Central Asia, and Latin America have fueled revenue growth [4]. The expansion of high-priced product sales has contributed to better margins and profits [4]. Infrastructure improvements, including the upcoming completion of a local procurement system for materials and supplies at overseas factories, are expected to reduce costs and enhance profitability in the second half of 2025 [4].
As a result, KT&G's overall revenue for Q2 2025 reached KRW 1.5479 trillion, up 8.7% YoY, while operating profit grew 8.6% to KRW 349.8 billion [1][2]. The tobacco segment, which includes global cigarette sales, accounted for substantial growth, with its revenue increasing by 10% and operating profit by 1.6% [1][4].
This strong performance has contributed to KT&G’s third consecutive quarter of revenue and profit growth. The company's improved earnings have allowed it to raise its interim dividend by KRW 200 per share (to KRW 1,400) and plan aggressive share repurchase and cancellation programs worth KRW 300 billion or more, reflecting strong shareholder returns [2][4].
Looking ahead, KT&G aims for double-digit operating profit growth in 2025, continuing the momentum from Q2 and the sustained global demand for cigarettes [2][5]. The company is executing its "2024-2027 Value Up" plan, which includes total cash returns of KRW 3.7 trillion and a target to cancel 20% of issued shares, which may enhance shareholder value [2]. Cost efficiencies from the upcoming local procurement system in overseas factories are expected to further boost profit margins in H2 2025 [4].
Continued growth in global cigarette sales, especially in emerging markets where KT&G has increased its presence, will likely remain a key driver for revenue and profit. The company plans to review dividend payout increases in line with stock price and profit growth.
In addition to its tobacco segment, KT&G's domestic NGP (Next Generation Products) segment recorded a first-half market share of 45.8% based on increased "lil AIBLE" sales. The first-half revenue of KT&G surpassed KRW 3 trillion for the first time. Profitability-focused strategies, including optimization of marketing costs, led to profit in the health functional foods segment.
Last year, KT&G executed cash returns of KRW 1.1 trillion and cancelled 6.3% of issued shares, in accordance with the Value Up plan. KT&G held an earnings release conference call on August 7, 2025, to announce its 2025 second quarter results.
[1] KT&G's Q2 2025 earnings release [2] KT&G's 2024-2027 Value Up plan announcement [3] KT&G's 2025 Q2 earnings conference call transcript [4] KT&G's Q2 2025 earnings presentation [5] KT&G's 2025 Q2 earnings press release
In light of KT&G's triple growth in the global cigarette segment, the company is poised to invest further in its business by executing share repurchase and cancellation programs worth KRW 300 billion or more, reflecting strong shareholder returns [2]. As KT&G aims for double-digit operating profit growth in 2025, the ongoing expansion of high-priced product sales in global markets could offer significant opportunities for finance growth [2].
