KT&G (033780) Q2 2025 earnings summary

Executive summary

• Achieved record first-half revenue exceeding KRW 3 trillion, driven by strong global cigarette (CC) growth and higher real estate development revenue.

• Global CC segment set new records for quarterly volume and revenue, with volume up 9.1% and revenue up 30.6% year-over-year.

• Focus remains on core business, global competitiveness, and quality-centered profit growth amid market uncertainties.

• Focused on quality growth in Health-Functional Food (HFF) through portfolio restructuring and efficiency improvements.

• Interim consolidated financial statements reviewed for the six-month periods ended June 30, 2025 and 2024, with no material misstatements identified.

Financial highlights

• Q2 consolidated revenue rose 8.7% year-over-year to KRW 1.5479 trillion, with operating profit up 8.6% to KRW 349.8 billion.

• Net income declined 54.1% to KRW 143.5 billion due to lower currency-related non-operating profits; EPS dropped 51.1% to KRW 1,328.

• EBITDA increased 9.7% to KRW 421 billion, with a margin of 27.2%.

• Consolidated sales for the six months ended June 30, 2025 were KRW 3,039,011 million, up from KRW 2,716,035 million year-over-year.

• Operating profit for the six months was KRW 635,442 million, compared to KRW 558,563 million in the prior year.

Outlook and guidance

• Double-digit annual operating profit growth targeted for 2025, with continued momentum in global CC and improved cost competitiveness.

• Guidance maintained due to ongoing uncertainties in FX rates, raw material prices, and geopolitical factors, but management aims to outperform double-digit operating profit.

• Interim dividend set at KRW 1,400 per share, up KRW 200 from prior year, with further increases possible based on performance.

• Additional share buybacks planned, including cancellation of KRW 300 billion worth of shares.

• Board resolved to pay an interim dividend of KRW 149,903 million (KRW 1,400 per share) and to acquire and retire 2,135,231 treasury shares (KRW 300,000 million) in 2025.