KT&G Reports First Quarter 2024 Results; Strong Performance in Next-Generation Products and Overseas Cigarettes

The company's revenues and operating profit have decreased compared to the previous year due to global inflation and the completion of major real estate projects. It is expected that in the second half of the year, there will be an improvement in performance due to strengthening competitive positions in key areas of the business and business transformation.

Financial results

/PRNewswire/ -- KTG Corporation ("KTG" or "the Company") (KRX:033780), a leading tobacco manufacturer in South Korea, today announced its financial results for the first quarter ended March 31, 2024. The consolidated revenue amounted to1.292 trillionHere is Korea, and the operating profit has reached236.6 billionthere.

The operational results in the NGP (Next Generation Products) sectors and international cigarette manufacturing, both domestically and outside the Korean market, showed steady growth during the first quarter of 2024, continuing the positive trends from last year. In the first quarter of 2024, the sales volume of NGP, which is the main driver of growth for this business line, demonstrated improvements across all key indicators, including sales volume, revenue, and operating profit.

• The sales volume of NGP abroad showed impressive growth of14.7%having reached2.11 billioncigarette.
• KTG has recorded an increase in revenue from the international cigarette business for three consecutive quarters.
• The revenue from cigarette sales abroad amounted to291.8 billionLook, what's on10.1%more compared to the same period last year.

Despite significant results in its core areas, consolidated revenue and operating profit for the first quarter were lower than in the previous year. This decline is attributed to rising production costs, the completion of major construction projects, and a decrease in revenue from the health products segment amid reduced consumer spending.

Forecasts and business transformation

Despite the challenges the company faced at the beginning of the year, KTG forecasts positive results in the second half of the year under the leadership of the new CEO, Kyung-men Ban. Since taking office on March 28, Mr.

• NGP
• Cigarette export
• Health products

As part of the business transformation, Mr. Ban initiated a reorganization aimed at maximizing the results and efficiency of each business unit. In the new organizational structure, the strategic, marketing, and production departments now report directly to the CEO, which allows the leaders of these departments to gain more authority to enhance their effectiveness and performance.

In international business, regional organizations have been transformed into independent companies to create a robust management structure that facilitates the accelerated internationalization of the company. In addition to the business transformation, KTG is implementing a project to enhance the return on equity (ROE), which will contribute to improving overall profitability.

The company also aims to increase value for shareholders and participates in the Corporate Value Enhancement Program initiatives launched by the South Korean government, through its committed implementation of a new three-year shareholder return policy for 2024-2026. This policy provides for cash returns amounting to2.8 trillionthere's almost a cancellation15%issued shares.

A representative of KTG stated: "We intend to strengthen our competitive advantages in key areas of business and implement a transformation aimed at making a significant leap forward towards achieving the status of a global leader." "Despite a number of challenges, such as rising production costs and economic recession, KTG is doing everything possible to turn the business around in the second half of the year by enhancing global competitiveness and optimizing operational activities," the representative added.