KT&G Q2 earnings: net profit falls 54% to $103 million, NGP revenue down 0.8% to $141 million

Key points:

Core business data:

 • In the first half of 2025, sales exceeded ₩3 trillion KRW (approx. USD 2.16 billion) for the first time.
• Q2 revenue reached ₩1.5479 trillion KRW (approx. USD 1.114 billion), up 8.7% year-on-year.
• Q2 operating profit was ₩349.8 billion KRW (approx. USD 252 million), up 8.6% year-on-year.
• Q2 net profit stood at ₩143.5 billion KRW (approx. USD 103 million), down 54.1% year-on-year.
 

Traditional tobacco business: 

 • Domestic cigarette business revenue: ₩408.3 billion KRW (approx. USD 294 million), down 0.6% year-on-year.
• Overseas cigarette business revenue: ₩469.0 billion KRW (approx. USD 338 million), up 30.6% year-on-year.

Performance of new tobacco products: 

 • Revenue: ₩196.1 billion KRW (approx. USD 141 million), a slight 0.8% decline year-on-year.

According to KT&G’s official announcement on August 7, 2025, the Korea Tobacco & Ginseng Corporation (KT&G) released its financial results for Q2 and the first half of 2025.

Driven by strong growth in overseas cigarette business and real estate, the company’s first-half sales surpassed ₩3 trillion KRW (approx. USD 2.16 billion) for the first time in history. KT&G also announced an increase in its interim dividend and the launch of a large-scale share repurchase program to enhance shareholder returns.
 

Core financial performance (second quarter of 2025)

• Revenue: ₩1.5479 trillion KRW (approx. USD 1.114 billion), +8.7% YoY
• Operating Profit: ₩349.8 billion KRW (approx. USD 252 million), +8.6% YoY
• Net Income: ₩143.5 billion KRW (approx. USD 103 million), -54.1% YoY
• EPS: ₩1,328 KRW (approx. USD 0.96), -51.1% YoY
 

1.Business Segment Analysis (Second Quarter of 2025)

Tobacco business

Overseas Cigarettes
• Revenue: ₩469.0 billion KRW (approx. USD 338 million), +30.6% YoY
• Sales volume: 16.7 billion sticks, +9.1% YoY
• Adjusted operating profit: +51.1% YoY
• Regional sales distribution:
Asia-Pacific (APAC): 42.8%
Middle East & Africa (MEA): 31.3%
Americas, Europe & CIS (AME & CIS): 25.9%

Domestic Cigarettes
• Revenue: ₩408.3 billion KRW (approx. USD 294 million), -0.6% YoY
• Sales volume: 9.8 billion sticks, -5.14% YoY
• Market share continued to rise, reaching 0.6% in H1 2025.

New Tobacco (NGP – lil heated tobacco brand)
• Revenue: ₩196.1 billion KRW (approx. USD 141 million), -0.8% YoY
• Market penetration (NGP Penetration): 22.8% in H1 2025, up from 21.1% a year earlier.
• Market share leadership: heated tobacco stick share of market (Stick SoM) steady at 45.8% in H1 2025.
• Quarterly sales rebound: overseas heated tobacco stick sales reached 2.24 billion units in Q2 2025, +4.2% YoY, driven by expanded sales in markets such as Russia.

2. Health Functional Foods (KGC Ginseng Corporation)

• Revenue: ₩220.6 billion KRW (approx. USD 159 million).
• Operating profit: turned from a loss of ₩1.0 billion KRW (approx. USD 7.2 million) to a profit of ₩62 billion KRW (approx. USD 44.64 million).

3. Real Estate Business

• Revenue: up by ₩143.7 billion KRW (approx. USD 103 million) YoY.
• Operating profit: rose from ₩29 billion KRW (approx. USD 20.88 million) to ₩177 billion KRW (approx. USD 127 million).

Outlook & Shareholder Returns

• Annual targets: maintain rapid growth in overseas cigarette business, enhance global cost competitiveness, and achieve double-digit growth in full-year operating profit.
• Shareholder returns:
• Interim dividend per share: ₩1,400 KRW (approx. USD 1.01), up ₩200 YoY.
• Launch of ₩300 billion KRW (approx. USD 216 million) share buyback, with cancellation of shares upon completion.