KT&G (033780) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated revenue rose 15.4% year-over-year to KRW 1.4911 trillion, with operating profit up 20.7% to KRW 285.6 billion and adjusted operating profit up 45.1% after excluding one-off early retirement costs, driven by record-high Global CC business performance and improved product mix and pricing.

• Net income declined 9.7% to KRW 257.9 billion, while EPS decreased 4.7% to KRW 2,370.

• Launched a new co-CEO system to tailor domestic and overseas business strategies, focusing on profitability and localized brand expansion.

• Announced plans to diversify into modern products, including nicotine pouches and e-vapor, and initiated projects for future growth through new product launches and expanded partnerships.

• Tobacco led with 66.3% of sales, followed by health functional foods (21.1%), real estate (6.7%), and others (5.9%).

Financial highlights

• Gross profit margin improved to 50.6% from 49.8% year-over-year; operating profit margin was 19.2%, up from 18.3% in Q1 2024.

• EBITDA rose 19.1% to KRW 354.3 billion with a margin of 23.8%.

• Cash and cash equivalents at quarter-end: KRW 1,018.7 billion.

• Total assets: KRW 14,067.4 billion; total equity: KRW 9,187.6 billion.

• Debt-to-equity ratio: 53.1%.

Outlook and guidance

• No changes to annual guidance; company remains on track to achieve previously communicated targets.

• Will review Q2 performance and market conditions for potential upward revisions.

• Focus on accelerating global CC growth, expanding modern product categories, and pursuing inorganic growth opportunities.

• Ongoing investment in production capacity, digital transformation, and ESG initiatives.

• Expects 2025 to be a year of high uncertainty and risk but is committed to innovation and growth.