KT&G is pushing beyond traditional tobacco, with analysts viewing its latest sales milestone as the start of long-term structural growth.
KT&G is on track to exceed KRW6 trillion (US$4.4 billion) in annual sales for the first time, driven by overseas growth, a rebound in next-generation products, expansion into nicotine pouches, and an aggressive shareholder return policy, The Asia Business Daily reported.
While South Korea’s cigarette market has seemingly matured and demand continues to decline, KT&G is accelerating its shift from a traditional tobacco company to a global nicotine platform enterprise. Analysts see the sales milestone as the beginning of sustained structural growth rather than a one-off result.
Market research firm FnGuide estimates KT&G’s consolidated sales last year at KRW6.47 trillion (US$4.8 billion), with operating profit reaching KRW1.34 trillion (US$1.0 billion). Both figures represent year-on-year increases of 9.5% and 13%, respectively.
Overseas combustible cigarettes accounted for most of the improvement. KT&G moved away from discount-driven volume growth and increased the share of higher-margin products, allowing both average selling prices and sales volume to rise. Growth accelerated in the Commonwealth of Independent States (CIS), the Middle East, and Southeast Asia as local production expanded and distribution networks stabilized. The expanded Kazakhstan plant fully contributed last year, and a new factory in Indonesia is scheduled to begin operations this year. These overseas facilities should reduce logistics costs and generate favorable currency effects, directly supporting profitability.
Analysts expect overseas cigarette sales to grow more than 30% this year and around 20% next year, offsetting falling domestic demand and lifting overall tobacco revenue.
Next-generation products, including heated tobacco, have also become a core growth engine. Supply disruptions in Vietnam limited performance until 2024, but most issues have eased and sales have normalized. In Korea, premium devices such as Lil Hybrid and Able continue to gain traction, while overseas KT&G is preparing new global platforms and planning entry into additional markets, including Russia. Securities firms expect the global NGP contribution to rise significantly by 2026.
FnGuide projects KT&G’s 2026 sales at KRW6.77 trillion (US$5.0 billion), with operating profit expanding to KRW1.47 trillion (US$1.1 billion). Growth drivers include strong overseas cigarette and NGP performance, an expanded nicotine portfolio led by nicotine pouches, and shareholder returns totaling about KRW3 trillion (US$2.2 billion).
KT&G formally entered the nicotine pouch market in September through a joint acquisition with Altria of Sweden-based Another Snus Factory Stockholm AB. ASF owns the LOOP brand, which leads in Iceland and ranks second or third in Sweden and Norway. From the first quarter of this year, ASF’s results will contribute to KT&G’s equity-method earnings. The company plans to leverage its Middle East and Asia-Pacific distribution networks to expand nicotine pouch sales.