KT&G (033780) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 15.4% year-over-year to KRW 1.4911 trillion, with operating profit up 20.7% and adjusted operating profit up 45.1% after excluding one-off wage-related costs, driven by record-high Global CC business performance.

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

• Implemented a co-CEO system to enhance domestic and overseas business structures and profitability.

• Strategic focus on diversifying into modern products, including nicotine pouches, e-vapor, and health functional foods, to secure future growth.

• Initiated new product launches, expanded partnerships, and continued global and domestic expansion in next-generation tobacco and health foods.

Financial highlights

• Q1 consolidated revenue: KRW 1.4911 trillion (+15.4% YoY); operating profit: KRW 285.6 billion (+20.7% YoY); adjusted operating profit: KRW 343.2 billion (+45.1% YoY).

• Net income: KRW 257.9 billion (-9.7% YoY); EBITDA: KRW 354.3 billion (+19.1% YoY); EBITDA margin: 23.8%.

• EPS: KRW 2,370 (-4.7% YoY).

• Gross profit margin improved to 50.6% from 49.8% YoY; operating profit margin rose to 19.2% from 18.3% YoY.

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

Outlook and guidance

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

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

• Full-scale turnaround in health functional foods expected in 2025, with foundational improvements underway in 2024.

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

• Targeting further growth in online sales channels and international markets.