On November 3rd, according to a report by the South Korean news agency Yonhap, the leading tobacco company in South Korea, KT&G, announced on Thursday that its third-quarter net profits increased by 29% year-on-year due to increased exports and a weakened South Korean won.
The company stated in a press release that their net profit for the three months ending in September increased from 359.58 billion South Korean won to 463.14 billion South Korean won (325 million US dollars) compared to the same period last year.
The statement declares that due to an increase in the sales of popular products in the domestic market and an increase in overseas sales amid weakening of the Korean won against the US dollar, the revenue has received a boost.
The weakness of the South Korean won can lead to an increase in the value of returns measured in US dollars when repatriated back into the home currency. According to data from the Bank of Korea, the average exchange rate of the US dollar in the third quarter rose from 1157 won a year ago to 1338 won.
Heat-not-burn" or "smokeless tobacco" products are electronic devices that contain tobacco and are different from electronic cigarettes. These products heat the tobacco to high temperatures without combustion, thereby preventing the production of smoke that users inhale.
In the third quarter, operating profit decreased by 2.7% from 417.03 billion Korean won to 405.61 billion Korean won compared to the same period last year. During this period, sales increased by 8.5% from 1.49 trillion Korean won to 1.62 trillion Korean won.
In the domestic market, KT&G sold a total of 11.05 billion cigarettes in the third quarter, representing a 0.4% decrease compared to the same period last year, when sales reached 11.09 billion cigarettes. The company holds a 65% share of the local cigarette market.
Due to the continuously increasing demand from emerging markets, the company's overseas sales have grown from 9.4 billion units one year ago to 12.2 billion units in September, representing a 30% increase.
Currently, 90% of KT&G's total sales come from its cigarette business division, while the remaining 10% come from its heat-not-burn division.
From January to September, net income increased by 21% from the same period last year, reaching 1.06 trillion won from 878.58 billion won.
A product called "Lil SOLID 2.0" has been developed that can be heated without burning. The image source is the Korean news agency Yonhap.
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