KT&G Q1 Net Profit at $206 Million: Driven by Higher Export Volume

According to Yonhap News Agency today, KT&G reported net profit of KRW 274.23 billion ($206 million) for the first quarter of 2023, up 4% from the same period in 2022.

The South Korean cigarette manufacturer attributed the increase to higher export volume.

"Higher tobacco sales in emerging markets such as Indonesia, Africa, and Latin America helped drive quarterly profit," KT&G said in a statement.

However, quarterly operating profit fell 4.9% year over year to KRW 316.55 billion, partly due to rising costs for leaf tobacco and other raw materials. During the cited period, sales edged down 0.5% from KRW 1.403 trillion to KRW 1.4 trillion.

In January, KT&G signed a 15-year supply agreement with Philip Morris International, allowing the South Korean cigarette maker to distribute its Lil heated tobacco products through the multinational company’s extensive global sales network.

KT&G aims to generate more than half of its sales from overseas business by 2027. It is targeting revenue of KRW 10 trillion by 2027, compared with KRW 5.9 trillion in 2022.

 Since 2020, KT&G has exported its heated tobacco products to more than 30 countries through PMI’s distribution network.

The South Korean company gets 90% of its total sales from its cigarette business division and 10% from its heated tobacco products division.

 KT&G operates four tobacco manufacturing plants in South Korea, Russia, Turkey, and Indonesia, with a combined annual production capacity of 13.6 billion cigarettes.