What Happened? – KT&G Q2 2025 Earnings Breakdown

KT&G reported revenue of KRW 15,479 billion and operating profit of KRW 3,498 billion, surpassing market projections. However, net profit came in lower than expected at KRW 1,435 billion.

  • Revenue: KRW 15,479 billion (YoY +20%)
  • Operating Profit: KRW 3,498 billion (YoY +48%)
  • Net Profit: KRW 1,435 billion (YoY -50%)

Why the Change? – Key Drivers of Performance

Strong performance in overseas HNB (Heat-not-Burn) tobacco sales and growth in the real estate business drove the increase in revenue and operating profit. The decline in net profit is attributed to temporary factors related to investment activities. Key business segment performance is as follows:

  • Tobacco Business: 12.6% growth driven by HNB expansion in overseas markets.
  • Real Estate Business: 94.3% increase due to the utilization of idle land.
  • Health Functional Foods: 6.7% decline, but positive outlook with increasing demand from the MZ generation.

What’s Next? – Investment Strategies

KT&G maintains long-term growth potential based on its solid fundamentals and active shareholder return policy. However, continuous monitoring of the factors impacting net profit and future earnings improvement will be crucial.

  • Maintain a Long-Term Perspective: Consider the company’s competitive strength in the tobacco business and efforts to secure new growth engines when developing a long-term investment strategy.
  • Manage Risk: Closely monitor the reasons for the decline in net profit and future outlook, and manage risk through strategies like dollar-cost averaging.
  • Shareholder Return Policy: Expect benefits from shareholder return policies such as share buybacks, cancellations, and dividends.