The South Korean tobacco group's core cigarette and NGP businesses drove a fourth straight quarter of double-digit operating profit growth, alongside a higher interim dividend and plans for a new shareholder return policy.
KT&G raised its full-year 2026 revenue and operating profit guidance after posting record first-half revenue and a fourth consecutive quarter of double-digit year-on-year operating profit growth. In the second quarter, consolidated revenue rose 9.9% to KRW 1.7016 trillion and operating profit increased 18.5% to KRW 414.5 billion. The company lifted its 2026 revenue growth target to 5-7% from 3-5% and its operating profit growth target to 10-13% from 6-8%. The performance was led by KT&G's tobacco business, where revenue climbed 11.7% to KRW 1.2185 trillion and operating profit rose 18.8% to KRW 382.5 billion. Its global cigarette unit expanded despite what the company described as a volatile external environment, including the conflict involving Iran, with second-quarter revenue up 18.9% to KRW 557.7 billion and operating profit rising 45.6% on higher sales volumes and strategic price increases. In South Korea, the domestic cigarette business held a 67.9% market share in the first half. The NGP (Next Generation Products) business, KT&G's reduced-risk tobacco category, posted a 48.2% market share as domestic NGP consumption kept growing. Revenue reached KRW 242.7 billion, up about 23.8% year on year, helped by a richer premium stick mix after the February launch of lil AIBLE 3.0. KT&G said it plans to broaden the portfolio with new products using advanced technologies in the second half. KGC's health functional foods business delivered modest second-quarter revenue growth. Domestic revenue increased 7.8% to KRW 174.2 billion, supported by Family Month promotions, campaigns tied to relief payments for people affected by high fuel prices, and brand marketing for products including "Gidarim Chimhyang" and "Everytime." Overseas revenue was KRW 49.6 billion, down KRW 9.4 billion from a year earlier because of distribution inventory adjustments in China. Even so, operating profit rose 61.3% to KRW 10.0 billion as sales through higher-margin channels expanded. KT&G also stepped up shareholder returns. Its Board of Directors approved an interim dividend of KRW 2,000 per share on August 6, up from KRW 1,400 a year earlier. The company said it will consider raising the year-end dividend as earnings growth continues. It also cancelled all treasury shares in April, completing ahead of schedule the treasury share cancellation target in its 2024-2027 Corporate Value Enhancement Plan announced at the end of 2023, and said its previously announced treasury share repurchase and cancellation program for the second half will go ahead unchanged. A new mid-to-long-term shareholder return policy, including dividend-strengthening measures, is due in the fourth quarter.