By Timothy S. Donahue
Top Takeaways:
- Overseas cigarettes drive growth: Global cigarette volumes and pricing drove record revenue and operating profit in 2025.
- Diversification stabilizes results: Real estate returned to profitability, offsetting weaker performance in health-functional foods.
- Shareholder focus intensifies: KT&G pledged dividends, buybacks, and asset sales to maintain total returns above 100% in 2026.
KT&G reported record financial results for 2025, driven by strong growth in its overseas cigarette business and a recovery in real estate, according to results posted on the company’s official website on Feb. 5.
KT&G reported that full-year consolidated revenue rose 11.4% year over year to KRW 6.58 trillion (US$4.47 billion), and operating profit increased 13.5% to KRW 1.35 trillion (US$920 million), marking the highest levels in the company’s history. Net profit for the year declined 6.1% to KRW 1.09 trillion (US$740 million), reflecting non-operating factors, with earnings per share of KRW 10,143 (US$6.90).
Fourth-quarter performance remained strong. KT&G posted Q4 revenue of KRW 1.71 trillion, up 10.1% year over year, and operating profit of KRW 248.8 billion, an increase of 17.1%. Net profit for the quarter rose to KRW 274.2 billion.
The tobacco business was the primary growth engine. Full-year tobacco revenue rose to KRW 4.37 trillion, with operating profit of KRW 1.16 trillion. Overseas conventional cigarettes led the gains, with volumes up 11.2% and average selling prices up 16.4%, pushing segment revenue up 29.4% and operating profit up 53.8%. KT&G said its cigarette products are now sold in 145 markets worldwide.
Domestically, cigarette volumes declined in the fourth quarter, partly due to earlier-than-usual stocking ahead of the Chuseok holiday, but KT&G’s market share still edged higher to 67.3%. In next-generation products, revenue continued to grow despite competitive pressure, supported by new device and consumable launches. KT&G reported full-year NGP consumables volume of 14.78 billion sticks, and domestic NGP stick market share reached 46.0%.
Outside tobacco, KT&G’s health-functional food segment saw revenue decline amid weaker consumer demand, but operating profit improved as the company shifted toward higher-margin products and channels. The real estate business rebounded sharply, supported by earnings from small- and mid-sized projects and one-off profit recognition from the Seocho SPC project, returning the segment to operating profitability.
KT&G also highlighted shareholder returns. The company declared a 2025 dividend of KRW 6,000 per share, up 11.1% year over year, and said it has canceled about 14.3% of outstanding shares since 2024, resulting in a total shareholder return ratio of 103.3%.
Looking ahead, KT&G forecasts 2026 revenue growth of 3%–5% and operating profit growth of 6%–8%, while committing to maintain a total shareholder return ratio above 100% through higher dividends, share buybacks or cancellations, and potential divestment of non-core assets.
