KT&G reports record-high revenue in 2023 driven by robust growth of core business areas
̶ Plans to cancel 3.5 million existing treasury shares on February 16th
̶ Declared a year-end dividend of KRW 4,000, bringing the annual dividend to KRW 5,200 including the interim dividend
SEOUL, South Korea, Feb. 7, 2024 /PRNewswire/ -- KT&G Corporation("KT&G" or the "Company") (KRX:033780) announced its 2023 fourth-quarter and full-year results on February 7th.
KT&G posted revenue of KRW 1.451 trillion and operating profit of KRW 198.6 billion in the fourth-quarter. For the full-year, the company reported record revenue of KRW 5.872 trillion and operating profit of KRW 1.168 trillion.
KT&G's record annual revenue was mainly driven by the outstanding performance in the overseas combustibles business, which is one of the three core business areas(Overseas Combustibles - Next Generation Product - Health Functional Food) as declared by the company. The overseas combustibles business reported record annual revenue of KRW 1.139 trillion. The combined annual revenue of the three core business areas including overseas combustibles reached KRW 3.313 trillion, a 1.1% increase YoY.
KT&G also delivered a robust performance in the Next Generation Product("NGP") business, supported by the continued growth in sales volume. In 2023, KT&G sold 8.24 billion sticks in overseas markets and 5.71 billion sticks in the domestic market, reflecting impressive two-digit YoY growth rates of 43% and 14.4%, respectively.
Driven by the outstanding performance of overseas subsidiaries in combustibles sales and overseas NGP sales volume growth, KT&G achieved an unprecedented milestone with an all-time high total overseas sales volume of 61.4 billion sticks, surpassing 60 billion sticks for the first time.
The Health Functional Food("HFF") business also experienced growth in both revenue and operating profit in 2023, following the continued growth of the overseas sales. The annual revenue of the HFF business jumped 0.3% to KRW 1.394 trillion. The operating profit increased by 32.6% and reached KRW 116.4 billion, surpassing the revenue growth rate.
KT&G foresees a robust financial performance for 2024, projecting the annual revenue and operating profit to exceed the growth rate of 10% and 6%, respectively. This optimistic outlook is driven by the expectation of a YoY growth exceeding 15% in combined revenue from the company's core business areas. Additionally, the operating profit from the core business areas is expected to grow 31.5% YoY, surpassing the revenue growth rate and further contributing to the overall optimism for the fiscal year 2024.
On the 7th, following the announcement of the 2023 fourth-quarter and full-year results, KT&G also outlined a treasury share cancellation plan. As this year marks the first year of implementing a new three-year(2024-2026) shareholder return policy the company has announced last November, KT&G has decided to cancel 3.5 million existing treasury shares(equivalent to around KRW 315 billion based on the current market price) on February 16th, reiterating its commitment to the faithful execution of the shareholder return policy. KT&G plans to continue acquiring treasury shares for cancellation in the second half of the year.
Also, KT&G's Board of Directors has resolved to declare a year-end dividend of KRW 4,000 on the 7th. The total annual dividend includes the interim dividend of KRW 1,200 and amounts to KRW 5,200 per share, which is KRW 200 up from the prior year. The total dividend amount will be decided at the upcoming Annual General Meeting of Shareholders.
Last November, KT&G unveiled a new three-year(2024-2026) shareholder return policy totaling KRW 2.8 trillion. The plan encompasses KRW 1.8 trillion in cash dividend and KRW 1 trillion allocated for share buyback and cancellation. In addition to cancelling newly acquired shares, KT&G also plans to cancel approximately 10 million existing treasury shares(approximately 7.5% of its shares issued).
Last year was a year dedicated to the successful implementation of a business transformation strategy that focuses on the core business areas. This year, KT&G will continue to strengthen the competitiveness of the core business areas, expand a sustainable business portfolio, and faithfully carry out the shareholder return policy. KT&G will stay committed to enhancing both corporate and shareholder values, according to a KT&G spokesperson.
Media Contact: Yoo Yeon Choi, 20180042@ktng.com
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SOURCE KT&G Corporation
