KT&G Q2 Net Profit Plunges 41.3%, but Overseas Heated Tobacco Sales Rise 72.7%

South Korean tobacco company KT&G recently released its financial results for the second quarter of 2022. Operating profit fell 25.9% year-on-year to KRW 242.9 billion, below the market expectation of KRW 271.2 billion. Revenue also declined 5.7% to KRW 1.3 trillion, missing the market forecast of KRW 1.4 trillion. Net profit dropped 41.3% year-on-year to KRW 199 billion.
By segment, heated tobacco sales volume continued to grow, with total domestic and overseas heated tobacco sales rising 43.5% to 3.63 billion sticks. Overseas heated tobacco sales increased 72.7% to 2.21 billion sticks. Export revenue rose 5.9% to KRW 152.9 billion, mainly driven by favorable pricing in key markets such as Latin America and the Middle East. However, due to a slowdown in the real estate business, revenue from that segment fell 21.3% year-on-year, while operating profit plunged 73.5%.
KT&G said that despite ongoing raw material cost inflation and the impact of real estate project completions, profitability is gradually recovering. The company also announced a share buyback plan, under which it will repurchase 3.47 million of its own shares over the next three months. In addition, KT&G declared an interim cash dividend of KRW 1,200 per share, marking the company’s first-ever interim dividend. KT&G said it will continue to strengthen the competitiveness of its core businesses and enhance shareholder and corporate value.