KT&G Corporation, South Korea’s leading tobacco manufacturer, recently announced its financial results for the first quarter of 2024. The company reported a decrease in revenue and operating profit year-over-year due to global inflation and the completion of large-scale real estate development projects. Despite this, KT&G remains optimistic about achieving a turnaround in the second half of the year by focusing on core business areas and implementing a strategic business transformation.
In the first quarter of 2024, KT&G saw strong performances in its overseas and domestic Next Generation Product (NGP) and overseas cigarette sectors. The NGP stick volume, a key driver for the NGP business, experienced growth in key metrics such as sales volume, revenue, and operating profit. Overseas NGP stick volume, in particular, saw impressive double-digit growth of 14.7%, reaching 2.11 billion sticks. Additionally, the overseas cigarette business achieved its third consecutive quarter of revenue growth, driven by strategic pricing strategies in key markets like Indonesia.
Despite these successes, KT&G’s overall revenue and operating profit for the first quarter decreased compared to the same period last year due to rising manufacturing costs and completion of real estate projects. However, under the leadership of new CEO Kyung-man Bang, the company is undergoing a strategic business transformation to drive growth in core areas such as NGP, overseas cigarette, and health functional food.
CEO Bang has implemented an organizational restructuring to maximize performance and strengthen management within each business unit. This includes establishing Strategy, Marketing, and Manufacturing units directly under the CEO, with each unit head granted significant responsibility and authority. The overseas business has also undergone restructuring into independent companies to facilitate international expansion.
In addition to the business transformation, KT&G is focused on boosting Return on Equity (ROE) and enhancing shareholder value. The company has a new three-year shareholder return policy in place, which includes a cash return of KRW 2.8 trillion and the cancellation of nearly 15% of its issued shares.
A spokesperson for KT&G emphasized the company’s commitment to becoming a Global Top-tier company through increased competitiveness and operational efficiency. Despite challenges like inflation and economic recession, KT&G is dedicated to achieving a business turnaround in the second half of the year.
For more information about KT&G Corporation and its financial results, visit their website.
Image: KT&G Logo
SOURCE: KT&G Corporation
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