KT&G reports 2023 second quarter results; Overseas Heat Not Burn volume growth of 72.7%

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Aug 03, 2023, 04:05 ET

Plans to announce share repurchase & cancellation of KRW 300 billion and declare an interim dividend for the first time

SEOUL, South Korea, Aug. 3, 2023 /PRNewswire/ -- KT&G Corporation("KT&G" or the "Company") (KRX:033780), South Korea's leading tobacco manufacturer, today announced financial results for the second quarter ended June 30, 2023. The Company also shared its robust shareholder return program, including interim dividend and share cancellation.

For the 2023 second quarter, the Company posted consolidated revenue of KRW 1.336 trillion and operating profit of KRW 242.9 billion.

KT&G delivered impressive growth in Heat Not Burn category and combustibles exports, which proves the company's fundamentals remain intact.

The Heat Not Burn business saw continued volume growth as the total consumables volume that includes both domestic and overseas sales figures jumped 43.5% to 3.63 billion sticks. Such steep volume growth was largely attributable to the rapid global expansion of KT&G's Heat Not Burn brand lil. For the second quarter, KT&G's overseas Heat Not Burn category recorded sales volume of 2.21 billion sticks, a 72.7% growth YoY.

The Company's overseas combustibles revenue, including both overseas subsidiaries and exports, posted KRW 265.5 billion. The export revenue increased 5.9% YoY to KRW 152.9 billion, mainly due to the favorable pricing in its key markets, including Latin America and the Middle East. The favorable pricing has also increased the profitability of the combustibles exports, as the export operating profit grew 42.6% YoY. The overseas combustibles sales volume also saw growth of 2.6% YoY, recording 13.17 billion sticks. The volume growth was driven by 20.4% growth in overseas subsidiaries' sales volume.

Meanwhile, KT&G also shared its plans on share repurchase & cancellation and interim dividend. As part of the three-year shareholder return policy the Company has previously announced in 2021, KT&G plans to acquire 3.47 million of its own shares (KRW 0.3 trillion), representing 2.5% of its outstanding shares, within three months for cancellation. KT&G will be cancelling its own shares for the first time in 14 years.

In addition, the Company declared its first ever interim cash dividend of KRW 1,200 per share. The interim dividend is scheduled to be paid out by August 23^rd. Including the interim dividend, the total dividend per share is expected to increase by at least KRW 200 per share compared to last year's KRW 5,000.

"We will continue to put our best efforts to enhance the shareholder and corporate values by developing the competitiveness of our core business areas, represented by Heat Not Burn, overseas combustibles, and Health Functional Food. It is also worth noting that in the fourth quarter this year, we will be announcing a New Shareholder Return Policy that includes treasury cancellation," said KT&G spokesperson.

SOURCE KT&G Corporation