Seoul: KT and G Corp., the leading tobacco company in South Korea, announced a significant decline in its second-quarter net profit, which fell by 54.1% compared to the previous year, attributed primarily to a base effect.
According to Yonhap News Agency, KT and G Corp. reported a net profit of 143.5 billion won (US$104 million) for the quarter ending June 30, a steep drop from 312.7 billion won recorded in the same period last year. The company explained in a regulatory filing that the high base effect was due to the return of some sales-related provisions reflected in the quarterly results of the second quarter of 2024.
Despite the drop in net profit, KT and G experienced an 8.7% increase in operating profit, rising to 349.9 billion won from 321.9 billion won in the previous year. The company's sales also saw an 8.7% uplift, reaching 1.54 trillion won up from 1.42 trillion won.
The core tobacco segment was a significant contributor, with KT and G achieving an operating profit of 321.8 billion won on sales totaling 1.09 trillion won. The company attributed this growth to an increased share of high-end products and higher selling prices in emerging markets.
Looking at the first half of 2025, KT and G's net income decreased by 32.9%, amounting to 401.4 billion won compared to 598.37 billion won the previous year.
To address the increasing global demand, KT and G completed the construction of its fourth overseas plant in Kazakhstan in April. Additionally, the company is expanding its production capacity with a second factory in Indonesia, expected to commence operations next year.
KT and G aims for at least a 6% annual growth in operating profit and a 5% sales growth in 2025. The company is fully invested in Korea Ginseng Corp., which produces ginseng-based health supplements and cosmetic products, and operates tobacco manufacturing facilities in South Korea, Russia, Turkey, Indonesia, and Kazakhstan.