(LEAD) KT&G Q3 net plunges 75.1 pct on FX losses

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SEOUL, Nov. 5 (Yonhap) -- KT&G Corp., South Korea's leading tobacco company, said Thursday its third-quarter net profit plunged 75.1 percent from a year earlier, largely due to foreign exchange losses stemming from the won's appreciation against the dollar.

Net profit for the three months that ended in September fell to 104.1 billion won (US$77.5 million) from 418.7 billion won in the same period last year, the company said in a regulatory filing.

"Foreign exchange translation losses weighed on the quarterly bottom line amid the won's appreciation against the dollar," a company spokesperson said by phone.

Operating profit rose 13.9 percent to 530.1 billion won in the third quarter from 465.3 billion won a year ago. Sales climbed 4.3 percent to 1.9 trillion won from 1.83 trillion won.

The company attributed its improved operating performance to increased overseas tobacco sales and improved profitability in its next-generation products (NGP) business.

KT&G aims to increase the share of overseas sales in its tobacco business to 70 percent by 2030, from about 50 percent currently, through higher sales volumes and improved average selling prices.

"We will focus on profitable growth by expanding our three key growth engines -- overseas tobacco, NGP and health foods," the company said.

KT&G has expanded its overseas manufacturing network to strengthen its presence in local markets and reduce its reliance on exports.

It operates tobacco manufacturing facilities in five countries: South Korea, Russia, Turkey, Indonesia and Kazakhstan.

The company also aims to expand its nicotine pouch business into 70 markets, including the United States, the world's largest market for the products, by 2030. The strategy follows its acquisition last year of Swedish nicotine pouch maker Another Snus Factory.

The NGP business includes heat-not-burn (HNB) products and nicotine pouches. HNB products heat tobacco without burning it, producing an aerosol rather than smoke.

The company raised its full-year earnings guidance, citing solid performance in its tobacco and NGP businesses.

It now expects operating profit to reach 1.5 trillion won on revenue of 7 trillion won this year.

In the first nine months of the year, net profit rose 3 percent to 844.45 billion won from 820.16 billion won a year earlier.

Operating profit increased 18.9 percent to 1.3 trillion won from 1.1 trillion won, while sales rose 9.1 percent to 5.31 trillion won from 4.87 trillion won.

KT&G plans to repurchase and cancel shares worth a total of 1.2 trillion won over the four years beginning in 2027 as part of efforts to enhance shareholder returns.

kyongae.choi@yna.co.kr
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