South Korea’s tobacco maker KT&G Corp. saw a 12.8 percent on-year rise in operating profit for the first three months on strong e-cigarette sales and improvement in overseas demand.
KT&G in a regulatory filing on Thursday said its consolidated operating profit reached 351.1 billion won ($298.5 million) in the January-March period, up 12.8 percent from a year ago. Its net profit gained 10.7 percent on year to 276 billion won, and sales added 11 percent to 1.18 trillion won over the same period.
On Thursday, KT&G shares ended 2.19 percent lower at 98,300 won in Seoul trading.
The addition in the bottom line mostly owed to e-cigarette sales at home and abroad, according to the company.
Despite a fall in traditional cigarette consumption after the launch of heat-not-burn (HNB) tobacco, KT&G’s cigarette share in the tobacco market has been on a steady rise in Korea to take up 63.1 percent in the first quarter. It was up 1.4 percentage points to the largest in a decade thanks to well-received new releases, KT&G added.
[Photo provided by KT&G Corp.]
Sales of its e-cigarettes also have been upbeat, with its HNB tobacco Lil Hybrid sold the most devices in Korea for the first three months. Miix and Fiit tobacco sticks, exclusive for Lil Hybrid, took up a 30 percent share in the e-cigarette market.
Outbound shipments to the Middle East have improved since the final quarter ended December, and exports to Africa, Latin America and the Asia-Pacific region also are growing steadily.
KT&G’s subsidiary Korea Ginseng Corp. raised 91.2 billion won in operating profit in the first quarter ended March on sales of 398.7 billion won. Operating profit was down 0.8 percent on year, while sales were up 1.4 percent during the period.
By Lee Duk-joo and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]