KT&G CEO Faces Reappointment Controversy as Revenue May See First Decline in Five Years

Financial companies predict that KT&G's revenue will decline by 0.1% this year compared to last year, reaching 58.4 trillion won, and operating profit may also drop by 10.5% to 11.3 trillion won. The term of KT&G CEO Baek Bok-in, which is about to end, is embroiled in controversy over reappointment.

According to recent reports from South Korean media Naver, financial companies expect KT&G's revenue to decline by 0.1% this year compared to last year, reaching 58.4 trillion won, and operating profit may also drop by 10.5% to 11.3 trillion won. This year, the company may experience its first revenue decline since 2018, raising doubts about the reappointment of KT&G (Korea Tobacco) CEO Baek Bok-in.

The company's revenue for the second quarter this year was 13.3 trillion won, a year-on-year decrease of 5.7%, and operating risks decreased by 25.9% compared to the previous year. Baek Bok-in's performance this year is crucial for his reappointment. 

Under Baek Bok-in's leadership, the company has increased its revenue from 41.7 trillion won in 2015 to 58.5 trillion won last year, but this year's performance may see a significant decline.

Despite the current challenges, Baek Bok-in remains focused on promoting next-generation products (NGP) and expanding overseas markets.

This January, the company announced plans to invest 40 trillion won in core business areas over the next five years to achieve a target of 10 trillion won in revenue by 2027. Baek Bok-in emphasized at the shareholders' meeting in March that the company plans to maximize profits by expanding the overseas market for heated tobacco products and reducing costs. Additionally, the company will begin establishing a new factory in Kazakhstan in November, aiming to sell its heated tobacco products and traditional cigarettes globally.

This year, the growth of the company's heated tobacco products segment has stagnated. In 2020, the sales of this segment increased from 279.3 billion won to 876.3 billion won last year, nearly tripling. However, in the first half of this year, sales of heated tobacco products dropped from 436.3 billion won in the same period last year to approximately 389.6 billion won, a decrease of 10.7%.