KT&G posted an earnings surprise in the first quarter, driven by strong overseas performance. The overseas cigarette business led the overall improvement, setting a quarterly sales record.
KT&G said Wednesday that first-quarter consolidated revenue rose 14.3% year-on-year to 1.7036 trillion won ($1.25 billion). Operating profit increased 27.6% to 364.5 billion won, while net profit jumped 46.6% to 378.2 billion won.
By segment, the tobacco business generated 1.1559 trillion won in revenue, up 17.0%, with operating profit growing 27.2% to 321.6 billion won. The health functional food business also saw revenue rise 5.8% to 332.6 billion won, with operating profit surging 53.3% to 27.9 billion won.
The overseas cigarette business in particular achieved "triple growth," with gains across revenue, operating profit, and sales volume. Revenue climbed 24.6% to an all-time high of 559.6 billion won, while operating profit soared 56.1%. KT&G said sales volume broadly increased across the Asia-Pacific and Eurasia regions, with profitability improving significantly thanks to pricing policies, cost reductions, and more efficient selling and administrative expenses. Overseas cigarette sales volume in the first quarter reached 18.01 billion sticks, up about 14.9% from 15.67 billion sticks a year earlier. Revenue, operating profit, and sales volume all grew, marking "triple growth."
In the domestic cigarette business, KT&G maintained its firm lead with a market share of 68.8%. The next-generation product (NGP) business, which includes heated tobacco products, also continued to grow on expanded sales at home and abroad, as well as base effects from supply chain disruptions the previous year. NGP revenue rose 51.5% year-on-year to 241.0 billion won. KT&G said it plans to launch a new e-cigarette product later this year to strengthen its market dominance.
