SEOUL– KT&G Corp., South Korea’s dominant tobacco company, said Thursday its net profit rose 3 percent to 1 trillion won (US$790 million) in 2022 from a year earlier on increased sales and exports.
KT&G posted the net profit of 1 trillion won on a consolidated basis for the whole of last year, compared with 971.76 billion won in 2021, the company said in a statement.
The bottom line rose on increased domestic sales of next-generation products, such as heat-not-burn (HNB) products, and higher demand for conventional cigarette products in emerging markets, the statement said.
Operating profit fell 5.3 percent to 1.27 trillion won, from 1.34 trillion won from a year ago. Sales were up 12 percent to 5.86 trillion won, compared with 5.23 trillion won.
KT&G aims to achieve sales of 10 trillion won in 2027 and earn over half of its sales from overseas in the same year as part of its expansion strategy. It earned one-third of its overall sales from overseas operations last year.
KT&G sells the lil ABLE HNB, or smokeless tobacco products. Lil ABLE is KT&G’s second heat-not-burn “platform” after its lil SOLID was released in 2017. The new product is available in three types of sticks — tobacco leaves, granular and liquefied.
HNB products are electronic devices that, unlike e-cigarettes, contain tobacco. The tobacco is heated to a high temperature without setting it alight and creating smoke that the user sucks in.
KT&G has exported its HNB products, including its lil SOLID and lil HYBRID products, to more than 30 countries since 2020 through the sales networks of the New York-based Philip Morris International Inc.
The company earns 90 percent of its overall sales from the cigarette business division and the remaining 10 percent from the HNB division.
KT&G has four tobacco manufacturing plants, one each in South Korea, Russia, Turkey and Indonesia, whose combined capacity amounts to 13.6 billion cigarettes a year.
Source: Yonhap News Agency