Seoul: KT and G Corp., South Korea's leading tobacco company, announced a 9.7 percent decline in its first-quarter net profit, attributing the decrease to reduced foreign exchange gains. The net profit for the first three months of the year fell to 257.9 billion won (US$184.4 million), down from 285.6 billion won during the same period last year, as indicated in the company's regulatory filing.
According to Yonhap News Agency, despite the drop in net profit, KT and G experienced a significant 20.7 percent increase in operating profit, reaching 285.6 billion won from 236.6 billion won a year earlier. This surge was fueled by strong demand and increased product prices in international markets. The company reported achieving "triple growth" in operating profit, sales, and sales volume for the fourth consecutive quarter.
Sales for the quarter rose 15.5 percent to 1.49 trillion won from 1.29 trillion won in the previous year. In response to rising demand overseas, KT and G recently completed the construction of its fourth overseas manufacturing facility in Kazakhstan and is in the process of building a second plant in Indonesia, slated to commence operations next year.
KT and G has set ambitious targets to achieve at least 6 percent annual growth in operating profit and a 5 percent increase in sales by 2025. The company, which wholly owns Korea Ginseng Corp., a seller of ginseng and cosmetic products, operates tobacco production facilities in South Korea, Russia, Turkey, Indonesia, and Kazakhstan.