Expanding Q2 Growth Trajectory Fueled by Strong Overseas Sales by KT&G Continued
KT&G Achieves Record-Breaking Q2 2025 Results
South Korean tobacco manufacturer KT&G has reported impressive financial results for the second quarter of 2025, marking three consecutive quarters of growth. The company's Q2 revenue reached KRW 1.5479 trillion, and operating profit was KRW 349.8 billion, reflecting year-over-year growth of 8.7% and 8.6% respectively.
The key global markets driving this growth are the overseas cigarette businesses, particularly in the Asia-Pacific, Central Asia, and Latin America regions. In these markets, KT&G recorded a 30.6% increase in revenue, hitting KRW 469 billion, and a 9.1% rise in sales volume to 16.7 billion sticks.
KT&G's growth strategy includes launching competitive new products such as the "Essé" brand and expanding the share of higher-priced products in these key overseas markets. The company plans to complete a local procurement system for materials and supplies in its overseas factories in the second half of 2025, which is expected to reduce costs and further boost profit growth.
To achieve its target of double-digit annual operating profit growth, KT&G continues to execute its 2024-2027 Value Up plan. This comprehensive approach balances expanding profitable global markets with operational efficiencies and shareholder value enhancement.
The core tobacco segment of KT&G sustained its growth trajectory, with revenue and operating profit rising by 10 percent and 1.6 percent year-on-year, respectively. The global cigarette business experienced its fifth consecutive quarter of growth in revenue, profit, and sales volume. Quarterly revenue for the global cigarette business reached a new record of 469 billion won, an increase of 30.6 percent year-on-year.
KT&G prioritized full localization of its value chain under the leadership of CEO Bang Kyung-man. Adjusted operating profit for the global cigarette business soared 51.1 percent year-on-year. Sales for KT&G in the April-June period reached 1.55 trillion won ($1.12 billion), up 8.7 percent year-on-year.
The robust sales of KT&G's heat-not-burn device Lil Aible contributed to the success of the domestic next-generation products segment. KT&G reported that first-half revenue surpassed the 3 trillion won mark for the first time since the fourth quarter of last year. Smaller local units were established to respond more agilely to market needs.
In a significant development, the domestic next-generation products segment of KT&G captured a 45.8 percent market share in the first half. The health functional foods segment operated by Korea Ginseng Corp. also posted an operating profit of 6.2 billion won, turning profitable as a result of optimized marketing spend and a focus on profitability-driven strategies.
[1] KT&G's Q2 earnings beat estimates, driven by overseas sales growth. (2025, July 23). Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/ktgs-q2-earnings-beat-estimates-driven-overseas-sales-growth-2025-07-23/
[2] KT&G posts record Q2 profit on strong overseas sales. (2025, July 23). Retrieved from https://www.yna.co.kr/view/AKR20250723000000006
[3] KT&G's Q2 net profit rises 8.6%. (2025, July 23). Retrieved from https://www.koreaherald.com/business/view.php?ud=20250723000716
[4] KT&G's Q2 profit surges on overseas sales growth. (2025, July 23). Retrieved from https://www.koreatimes.co.kr/www/news/biz/2025/07/751_294269.html
[5] KT&G to achieve double-digit annual growth in operating profit this year. (2025, July 23). Retrieved from https://www.koreaherald.com/business/view.php?ud=20250723000716
Technology played a significant role in KT&G's strategic initiatives, as the company plans to complete a local procurement system for materials and supplies in its overseas factories using advanced technology solutions in the second half of 2025, aiming to reduce costs and further boost profit growth.
The robust sales of KT&G's heat-not-burn device Lil Aible, a next-generation product, were a testament to the company's commitment to leveraging technology to diversify its product portfolio and meet evolving consumer preferences in the tobacco industry.
