KT&G boosts dividends amid record earnings

KT&G on Thursday reiterated the importance of giving back to its shareholders, underscoring the company’s efforts to bolster its presence in the global market and initiatives to upgrade its corporate value.

The company confirmed last year’s dividend of 6,000 won ($4) per share, up 11.1 percent from the previous year, following its general shareholders meeting. KT&G’s dividend has continued increasing over the past five years: 4,800 won in 2021, 5,000 won in 2022, 5,200 won in 2023 and 5,400 won in 2024.

KT&G turned in record earnings last year with 6.5 trillion won in sales, as its global cigarette business logged 1.88 trillion won in revenue, surpassing the domestic figure for the first time ever. Combined with the firm’s additional shareholder-return initiatives, such as share buybacks, cancellations and dividend growth, its market capitalization boosted to over 20 trillion won for the first time.

KT&G was one of the first companies to announce a plan to cancel treasury shares after the National Assembly passed a third amendment to the Commercial Act last month, requiring corporations to retire newly acquired treasury shares within one year and existing holdings within 18 months. KT&G held a board meeting on the same day to approve the cancellation of nearly 11 million shares worth about 2 trillion won, based on the day's closing price.

The company said this year’s expected growth will result in more return for shareholders through an increase in payouts. It added that the implementation of separate taxation on dividend income is expected to play a positive role in enhancing the growth of its value as KT&G has kept its dividend payout ratio at over 50 percent for a long period.

"We will advance the profit structure of the overseas tobacco business and keep the profit-centered growth going by rolling out delicate pricing strategies by country and fully operating local production system," said KT&G CEO Bang Kyung-man.

Regarding next-generation products, the CEO vowed to strengthen its leadership in the domestic market and bolster overseas business capabilities. The company already leads Korea's heated cigarette market with flagship products such as lil Hybrid and lil Able.

"Based on our distinguished (research and development capabilities), we will launch innovative platforms early and maximize synergy of global partnership to secure a dominant lead in the non-smoking category," he said.