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 earnings.

• Operating income for H1 2025 reached KRW 635.4 billion, up from KRW 558.6 billion in H1 2024.

• Net income attributable to owners was KRW 398.9 billion, with EPS at KRW 3,698.

• Board approved an interim dividend increase to KRW 1,401 and a KRW 300 billion share buyback and cancellation, progressing 53% of the KRW 1.3 trillion buyback plan.

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

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%.

• Tobacco segment sales rose 12.6% year-over-year to KRW 2,078.5 billion, maintaining a 68.4% share of total revenue.

• Health functional foods sales declined 6.7% to KRW 535.0 billion, while real estate surged 94.3% to KRW 244.1 billion.

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.

• The company plans to expand its online sales channels and further globalize its tobacco and health food businesses.

• Ongoing investments in production capacity and ESG initiatives are expected to support long-term growth.

• Management reaffirmed its commitment to shareholder returns, including a new share buyback and dividend policy.