KT&G Sets Ambitious Goals to Enhance Shareholder Value in 2025
KT&G's New Leadership Accelerates Profitability and Growth
KT&G Corporation (KRX: 033780) has successfully marked its first year under new leadership with significant strides in profitability and growth. Under the guidance of CEO Kyung-man Bang, the company has optimized its financial structure and enhanced its fundamental competitiveness, leading to impressive financial results.
Strong Financial Performance
During the fourth quarter, KT&G reported a consolidated revenue of KRW 1.557 trillion, reflecting an 8.0% year-on-year increase. Operating profit also witnessed a rise of 5.3%, totaling KRW 208.5 billion. For the entire year, KT&G achieved a record revenue of KRW 5.91 trillion, indicating a growth of 0.8% compared to the previous year. The operating profit reached KRW 1.185 trillion, representing a growth of 1.5%.
Tobacco Segment Growth
The tobacco segment has been a standout performer, generating KRW 3.906 trillion in revenue, with operating profit at KRW 1.082 trillion. This translates to year-on-year growth rates of 8.1% and 10.7%, respectively. The company's flagship brand, ESSE, contributed notably with a record yearly sales volume and a 10.3% growth rate.
Next Generation Product Segment Shows Promise
KT&G's Next Generation Product (NGP) segment continues to thrive. The company has reported selling 6.15 billion sticks in domestic markets and 8.34 billion sticks globally in 2024, marking significant growth compared to previous years.
Future Business Goals
Looking ahead to 2025, KT&G has set ambitious growth targets, aiming for consolidated revenue growth of at least 5% and operating profit growth of 6% or higher. The company plans to enhance its efficiency through improved manufacturing processes and a continued focus on profitable operations.
Strategic Shareholder Returns
Recognizing the importance of shareholder value, KT&G announced plans for substantial shareholder returns. The company will cancel treasury shares worth approximately KRW 360 billion, representing around 2.5% of total issued shares. Plans include repurchasing over KRW 300 billion in shares and a commitment to distribute KRW 1.1 trillion or more in returns, accompanied by a KRW 600 billion dividend payout.
Adjustments to Dividend Policy
KT&G has set the 2024 year-end dividend at KRW 4,200 per share, which is a slight increase from last year. The decision to move the record date allows investors to confirm dividends before acquiring shares, emphasizing KT&G's dedication to benefitting its shareholders.
A Commitment to Long-term Value Creation
With the Corporate Value-up Plan in place, KT&G is poised for long-term success. This plan includes a cash return of approximately KRW 3.7 trillion by 2027, which comprises a cash dividend of KRW 2.4 trillion alongside stock repurchases valued at KRW 1.3 trillion. This initiative reflects the company's commitment to enhancing shareholder value and its ongoing strategy to cancel shares comprehensively.
Conclusion
Following the initiatives set forth by CEO Kyung-man Bang, KT&G's focus on enhancing its core tobacco business, optimizing financial strategies, and prioritizing shareholder returns positions the company favorably in a competitive market. Despite facing uncertainties in both domestic and international landscapes, KT&G is determined to maintain its upward trajectory and foster greater value for its shareholder base.
Frequently Asked Questions
What is KT&G's main business focus?
KT&G primarily focuses on tobacco manufacturing, with significant investments in Next Generation Products.
How much has KT&G committed to shareholder returns for 2025?
KT&G has pledged to distribute KRW 1.1 trillion or more in shareholder returns, including a KRW 600 billion dividend payout.
What is the growth target set by KT&G for 2025?
KT&G aims for at least 5% growth in consolidated revenue and 6% growth in operating profit in 2025.
What changes have been made regarding dividends?
For the 2024 year-end dividend, KT&G has set it at KRW 4,200 per share, slightly increasing from the previous year.
Who is the CEO of KT&G?
The CEO of KT&G is Kyung-man Bang, who has been in office since March 2024.
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