Seoul:KT&G Corp., South Korea's leading tobacco company, has announced a significant drop in its third-quarter net profit, which plunged 75.1 percent compared to the same period last year. This decline is attributed mainly to foreign exchange losses resulting from the appreciation of the South Korean won against the US dollar.
According to Yonhap News Agency, KT&G's net profit for the quarter ending in September fell to 104.1 billion won (US$77.5 million) from 418.7 billion won in the previous year. The company cited foreign exchange translation losses as a major factor affecting the quarterly bottom line.
Despite the net profit decrease, KT&G's operating profit saw a 13.9 percent increase, reaching 530.1 billion won, while sales rose 4.3 percent to 1.9 trillion won. The company attributes its improved operating performance to increased overseas tobacco sales and enhanced profitability in its next-generation products (NGP) business.
KT&G has set a target to boost the share of overseas sales in its tobacco business to 70 percent by 2030, up from the current 50 percent. This goal is to be achieved through higher sales volumes and improved average selling prices. The company plans to expand its three key growth areas overseas tobacco, NGP, and health foods.
To reduce reliance on exports, KT&G has expanded its manufacturing network to include facilities in South Korea, Russia, Turkey, Indonesia, and Kazakhstan. Additionally, the company aims to expand its nicotine pouch business to 70 markets, including the United States, following its acquisition of Swedish nicotine pouch maker Another Snus Factory last year.
KT&G has raised its full-year earnings guidance, projecting an operating profit of 1.5 trillion won on revenues of 7 trillion won, driven by solid performance in its tobacco and NGP businesses. For the first nine months of the year, the company's net profit rose 3 percent to 844.45 billion won, with operating profit increasing by 18.9 percent and sales up by 9.1 percent.
In efforts to enhance shareholder returns, KT&G plans to repurchase and cancel shares worth a total of 1.2 trillion won over the four years beginning in 2027.