1. What Happened? KT&G H1 2025 Earnings Breakdown

KT&G reported revenue of KRW 15,479 billion (slightly up YoY) and operating profit of KRW 3,498 billion (slightly up YoY) for the first half of 2025. However, net profit came in at KRW 1,435 billion, significantly below the market consensus of KRW 2,587 billion.

2. Why Did This Happen? Analyzing the Net Profit Decline

The decline in net profit is attributed to factors such as losses from derivative transactions, investment losses, and increased corporate tax expenses. A detailed analysis of the semi-annual report and consolidated financial statements is necessary for further insights.

3. What’s Next? Outlook and Investment Strategies

KT&G’s core tobacco business, coupled with its growing HNB and health functional food segments, demonstrates operational stability. However, a thorough understanding of the reasons behind the net profit decline, management’s plans to address it, and the company’s H2 outlook are crucial. The rising KRW/USD exchange rate may benefit KT&G as an exporter, but FX risk should also be considered.

4. Investor Action Plan: What Should You Do?

  • Seek additional information regarding the net profit decline.
  • Review the company’s future earnings guidance and growth strategies.
  • Monitor the competitive landscape and regulatory changes in the tobacco and health functional food industries.