Seoul: KT and G Corp., South Korea's leading tobacco company, reported a 15.7 percent decline in its fourth-quarter net profit, attributing the drop to reduced foreign-exchange valuation gains. The company's net profit for the three months ending in December fell to 274.2 billion won (US$186.9 million) from 325.1 billion won recorded in the same period the previous year, as detailed in a regulatory filing.
According to Yonhap News Agency, the decline in foreign-exchange valuation gains was attributed to the strengthening of the won against the dollar during the period. A company spokesperson noted that the dollar stood at 1,434.90 won at the end of December, down from 1,470 won a year earlier, which negatively impacted the value of dollar-denominated earnings when converted into the local currency.
Despite the drop in net profit, KT and G saw its operating profit rise by 17 percent to 248.8 billion won in the December quarter, compared to 212.5 billion won a year earlier. Sales also saw an increase of 10.1 percent, reaching 1.71 trillion won from 1.56 trillion won.
For the full year, the company's net income decreased by 6.1 percent to 1.09 trillion won from the previous year's 1.16 trillion won. However, operating profit rose by 13.5 percent to 1.35 trillion won, and annual revenue climbed 11.4 percent to 6.58 trillion won from 5.9 trillion won.
KT and G's overseas tobacco sales experienced a significant jump of 29 percent year-on-year, reaching 1.9 trillion won in 2025. This accounted for 54 percent of total tobacco sales, marking the first time the company's overseas sales exceeded domestic sales. The growth was supported by double-digit increases in both sales volumes and average selling prices.
The company has expanded its overseas production facilities to boost local sales and reduce reliance on exports. Chief Financial Officer Lee Sang-hak stated that these efforts have helped lift the overseas sales ratio above 50 percent. "We will continue to strengthen our overseas business capabilities and explore new markets to drive future growth and enhance shareholder returns," he added.
KT and G operates tobacco manufacturing plants in five countries: South Korea, Russia, Turkey, Indonesia, and Kazakhstan. As part of its strategy to expand its next-generation product (NGP) business, the company plans to enter the nicotine pouch market this year following its acquisition of Swedish nicotine pouch maker Another Snus Factory last year. The NGP business includes heat-not-burn (HNB) products and health functional food products.
Looking forward, KT and G aims to achieve operating profit growth of 6 to 8 percent in 2026, driven by sales growth of 3 to 5 percent.