SEOUL, – KT&G Corp., South Korea’s dominant tobacco company, said Thursday its third-quarter net profit fell 28 percent from a year earlier due to foreign exchange losses.
Net profit for the three months ended in September declined to 333.29 billion won (US$254 million) from 463.14 billion won during the same period of last year, the company said in a statement.
“The won’s weakness against the U.S. dollar slowed in the third quarter compared with a year earlier, weighing on the quarterly bottom line,” a company spokesman said.
Operating profit rose 0.3 percent to 406.72 billion won in the third quarter from 405.61 billion won a year ago helped by increased exports of its heat-not-burn (HNB) product lil.
HNB products are electronic devices that, unlike e-cigarettes, contain tobacco. The tobacco is heated to a high temperature without setting it alight and creating smoke that the user inhales.
KT&G has exported its HNB products to more than 30 countries since 2020 through the sales networks of the New York-based Philip Morris International Inc. (PMI).
Sales were up 4 percent to 1.69 trillion won from 1.62 trillion won during the same period.
From January to September, net income dropped 24 percent to 809.44 billion won from 1.06 trillion won in the year-ago period.
Operating profit fell 9.1 percent to 969.37 billion won in the first nine months from 1.06 trillion won a year ago. Sales were down 0.5 percent to 4.42 trillion won from 4.44 trillion won.
In the cigarette division, the company earns 78 percent of its sales from the conventional cigarette business and 22 percent from the HNB business.
KT&G has six tobacco manufacturing plants: three in South Korea and three overseas ones in Russia, Turkey and Indonesia, respectively.
Last month, the company began construction in Kazakhstan of its fourth overseas plant as part of its expansion strategy. It aims to complete the plant’s construction by 2025 to export its products to the Eurasian region.
The Korean tobacco firm aims to earn half of its sales from its overseas businesses in 2027. It wants to achieve sales of 10 trillion won in 2027, compared with 5.9 trillion won in 2022.
Source: Yonhap News Agency