By Timothy S. Donahue
Top Takeaways:
- Record Quarter: Revenue rose 4.3% to $1.4 billion, while operating profit climbed 13.9%.
- Global Ambitions: KT&G plans to expand LOOP nicotine pouches into approximately 70 countries by 2030.
- Shareholder Returns: The company announced a four-year, $3.7 billion dividend and share repurchase program.
KT&G is setting earnings records at home while planning a much larger tobacco business abroad.
The South Korean tobacco company reported record third-quarter revenue of Won1.9052 trillion ($1.4 billion), up 4.3% from a year earlier, and operating profit rose 13.9% to Won530.1 billion ($392 million). Both figures were quarterly highs.
The company’s cigarette business generated 1.3065 trillion won ($969 million) in revenue, a 6% increase, while operating profit rose 14.4% to 425.5 billion won ($315 million). Its operating margin improved by 2.4 percentage points to 32.6%.
Overseas cigarette operations recorded their 10th consecutive quarter of simultaneous growth in sales volume, revenue, and operating profit, setting quarterly records for both volume and revenue.
KT&G also maintained its leading position in South Korea’s heated tobacco market, with an improved sales mix of higher-priced tobacco sticks that supported profitability. Despite operating gains, consolidated net income declined 75.1% to Won104.1 billion ($77.5 million).
The company expects full-year revenue to reach Won7 trillion ($5.2 billion) and operating profit of Won1.5 trillion ($1.1 billion), compared with Won6.58 trillion and Won1.35 trillion, respectively, in 2025.
At its November 5 Capital Markets Day, CEO Bang Kyung-man outlined a strategy to expand international cigarette sales, next-generation products, and health functional foods. KT&G plans to pursue opportunities in approximately 30 additional countries, implement strategic price increases, and expand premium cigarette sales, including its ESSE brand.
The company also plans to strengthen its overseas subsidiaries and optimize its global manufacturing network, including a new Indonesian factory completed in October. These initiatives are expected to deliver cumulative cost savings of more than Won550 billion ($407 million) over four years.
Its next-generation product strategy includes expanding direct international operations for heated tobacco products while continuing its existing global partnership.
KT&G also plans to expand its LOOP nicotine pouch brand into about 70 countries by 2030, including the United States. The brand is owned by Swedish nicotine pouch manufacturer Another Snus Factory, which KT&G acquired in 2025.
By 2030, KT&G aims for international sales to account for at least 70% of cigarette business revenue and for next-generation products to represent at least 30%. The company also aims for overseas revenue to contribute at least 30% to its health functional foods business.
“By strengthening our three growth pillars—global cigarettes, NGP and health functional foods—and expanding their global reach, we will deliver growth centered on profitability, going beyond simple revenue growth,” Bang said.
KT&G also announced plans to return approximately Won5 trillion ($3.7 billion) to shareholders from 2027 to 2030.
The company will increase its 2026 annual dividend by 33.3% to Won8,000 per share and aims to raise its dividend payout ratio from about 60% to at least 75% by 2030. It also plans to repurchase and cancel Won1.2 trillion ($888 million) of shares over four years, with additional shareholder returns possible.
“Building on sustained earnings growth, we will enhance shareholder value through shareholder returns on par with the top-level schemes in the global market,” Bang said.
