According to a report from the American Broadcasting Company on August 8th, South Korean tobacco manufacturer KT&G (KRX: 033780) held a financial results conference call today and announced their second quarter financial performance ending on June 30, 2024. The company reported a total revenue of 1.424 trillion Korean won (approximately 1.03 billion US dollars) and an operating profit of 321.5 billion Korean won (approximately 230 million US dollars), representing year-on-year growth of 6.6% and 30.6% respectively.
The main driver of this growth was a strong performance in the overseas tobacco business, which is one of the company's three core growth businesses. The overseas tobacco business saw growth in all key indicators such as revenue, operating profit, and sales volume, with revenue reaching a record-breaking 359.1 billion Korean won (approximately 260 million US dollars), representing a 35.3% year-on-year increase, and operating profit increasing by 139.1% year-on-year.
Domestic (South Korea) new tobacco product business ("NGP") achieved growth in key indicators such as revenue, operating profit, and sales volume, with year-on-year increases of 10.8%, 42.8%, and 7.7% respectively. Thanks to the increase in sales volume of HNB tobacco products, the profitability of overseas business continues to improve.
KT&G has announced that it aims to accelerate its vision of becoming a "global top-tier" company by strengthening the fundamental competitiveness of its core growth businesses and implementing structural reforms. To achieve this, the company has signed a cooperation memorandum with Philip Morris International in July to jointly submit a pre-market tobacco product application (PMTA) for KT&G's next generation HNB tobacco products.
During the financial report conference call, KT&G mentioned that the company expects a 2.5-3% increase in annual consolidated revenue, while operating profit will remain flat due to changes in the business environment for health functional foods and real estate sectors.
A spokesperson for KT&G stated:
In the second quarter, we achieved growth in revenue and operating profit through expanding our overseas business. We will continue to strengthen the competitiveness of our core growth businesses, maximize company value, and enhance shareholder value through a best-in-class shareholder return policy.
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