KT&G Corp.

SEOUL, South Korea, May 8, 2026 /PRNewswire/ -- The Capital Group Companies, Inc., a U.S.-based financial firm managing more than 3 trillion USD in assets, disclosed that it has acquired a 5.61% stake in KT&G(KRX:033780), South Korea's leading tobacco manufacturer.

This disclosure was made in accordance with Korea's regulatory requirement that investors holding more than a 5% stake in a listed company must report their ownership status and any changes within five days to financial authorities, including the Financial Services Commission and the Financial Supervisory Service, as well as the Korea Exchange.

According to regulatory filings and financial data providers, Capital Group is believed to have joined the ranks of major foreign shareholders holding more than 5% of KT&G shares, alongside BlackRock, which disclosed a 5% stake earlier this year, as well as First Eagle Investments and GIC, Singapore's sovereign wealth fund.

Foreign investors have reportedly extended their net buying streak of KT&G shares to 19 consecutive trading sessions through May 7. During the period, overseas investors are estimated to have purchased approximately 800,000 shares worth around 140 billion KRW (100 million USD). Fueled by this buying momentum, the stock price of KT&G settled in the 180,000-won range for the first time ever in the stock market on Thursday.

Meanwhile, KT&G held an IR meeting on May 7 and announced its preliminary Q1 earnings results. KT&G's Q1 consolidated revenue reached 1.7036 trillion KRW and operating profit 364.5 billion KRW, a respective YoY growth of 14.3% and 27.6%.

In particular, the company's overseas combustible cigarette business was a key driver of its earnings performance. KT&G's Q1 global cigarette revenue rose 24.6% YoY to 559.6 billion KRW, while operating profit increased 56.1% YoY based on costs and SG&A expenses reduction.

Backed by the competitiveness of its core business, KT&G presented targets for 2026 consolidated revenue growth of 3~5% and operating profit growth of 6~8%. The company also plans to achieve double-digit growth in sales volume, revenue, and operating profit in its overseas combustible cigarette business through the diversification of business models, including OEM production and licensing partnerships.

On the day, Sang-hak Lee, CFO of KT&G, stated "despite uncertainties due to geopolitical issues in the Middle East, stable revenue growth trend has continued in all regions including Asia-Pacific, Eurasia, and New Markets, leading to projections of a sustained growth of the global cigarette business." He further commented that "based on the performance growth from global business expansion, the company will continue to implement new shareholder return policies including dividend reinforcement and improve shareholder value."

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- Group operating profit rises 27% based on 56% global cigarette business operating profit growth

- Core competitiveness reinforcement results in heightened profitability, new shareholder return policies focusing on stronger dividend payout to be announced H2

SEOUL, South Korea, May 7, 2026 /PRNewswire/ -- KT&G (KRX: 033780) announced on the 7^th through its IR session that proactive profitability focused management schemes led to 56.1% YoY global cigarette operating profit growth in Q1, which in turn led to a solid performance of the entire group.

To start, based on the strong global cigarette business performance, KT&G's Q1 consolidated revenue reached 1.7036 trillion KRW and operating profit 364.5 billion KRW, a respective YoY growth of 14.3% and 27.6%. In detail, the tobacco business saw a revenue of 1.1559 trillion KRW and operating profit of 321.6 billion KRW, respective gains of 17% and 27.2%.

In particular, the global cigarette business saw a balanced sales volume growth throughout major regions including Asia-Pacific and Eurasia, while sustained strategic price hikes led to historic quarterly revenues. Q1 revenue rose 24.6% YoY to 559.6 billion KRW, while operating profit increased 56.1% YoY based on costs and SG&A expenses reduction, resulting in a "triple growth" of revenue, operating profit, and sales volume.

The domestic cigarette business maintained an overwhelming lead with a 68.8% market share. The NGP (Next Generation Products) business yielded a revenue of 241 billion KRW, a 51.5% increase from the previous year, due to growth in both domestic and global markets and base effects from the overseas device supply chain issues. In order to fortify NGP products' market leadership, KT&G plans to launch new products throughout the year.

KT&G plans to utilize its global cigarette direct business capabilities in order to scale entry into global markets with its NGP products. Based on the know-hows and distribution networks in major regions including Asia-Pacific and Eurasia that has shown meaningful performance in the global tobacco market, the company targets building a foundation for expanding direct global heat-not-burn business.

KGC's health functional foods business generated a revenue of 332.6 billion KRW, a 5.8% YoY growth, based on robust results from "Seollal (Korean New Year's day)" promotion and brand campaign effects for "Cheon Nok" and "Everytime" among others. Operating profit rose 53.3% YoY to 27.9 billion KRW based on revenue expansions in high-profit channels and profitability-focused strategies.

In addition, KT&G plans to directly carry out global nutrition business. To do so, KT&G established a center dedicated to the project earlier this month and plans to pursue "red ginseng ingredient business-to-business (B2B) projects" targeting global food & beverages companies, cosmetics, and other relevant businesses. KT&G plans to collaborate with global partners to diversify the global business through measures including launching new products that reflect local trends.

Meanwhile, on the 23^rd last month, KT&G preemptively took action to incorporate the legislative intent of the third Commercial Act amendments, cancelling the entire inventory of treasury shares amounting to 10,866,189 shares (equivalent to 9.5% of total issued shares, worth approximately 1.8516 trillion KRW). KT&G has overachieved its shareholder return share cancellation targets under the 2024~2027 corporate value improvement plan ahead of schedule and accordingly is planning to announce new shareholder policies with reinforced dividend payouts in H2.

Sang-hak Lee, CFO of KT&G, stated "despite uncertainties due to geopolitical issues in the Middle East, stable revenue growth trend has continued in all regions including Asia-Pacific, Eurasia, and New Markets, leading to projections of a sustained growth of the global cigarette business." He further commented that "based on the performance growth from global business expansion, the company will continue to implement new shareholder return policies including dividend reinforcement and improve shareholder value."

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