KT&G approves W360b share buyback and cancellation to boost shareholder value

KT&G held a board meeting Tuesday and approved a share buyback and cancellation worth approximately 360 billion won ($260 million) to enhance shareholder value, the company said.

The move follows through on a plan announced in February to buy back and cancel more than 300 billion won in shares. The buyback covers a total of 2.07 million shares, representing about 2 percent of total shares outstanding. KT&G will begin purchasing shares on the open market Wednesday and plans to cancel all acquired shares once the buyback is complete.

Earlier, in April, KT&G canceled its entire holding of treasury shares worth 1.8 trillion won. The company said it has already surpassed the share cancellation target — 20 percent of total shares outstanding as of 2023 — set under its mid- to long-term shareholder return plan for 2024 through 2027, announced in November 2024.

KT&G said the additional buyback and cancellation was driven by its continued strong earnings. First-half consolidated revenue rose 12.0 percent year on year to 3.41 trillion won, while operating profit climbed 22.6 percent to 779 billion won. The company credited stronger competitiveness in its core businesses, including overseas cigarettes and next-generation products, for the companywide performance.

On the back of those results, KT&G raised its interim dividend to 2,000 won per share from 1,400 won last year, an increase of 600 won. The company plans to announce a new mid- to long-term shareholder return policy centered on enhanced dividends in the fourth quarter.

Global asset managers have continued to increase their exposure to KT&G amid these moves. US investment firm Capital Group has raised its stake in the company to 8.22 percent, while BlackRock, the world's largest asset manager, holds a 6.15 percent stake.

"We decided on this share buyback and cancellation to improve the predictability of our shareholder return policy and to strengthen trust in the capital markets while enhancing per-share value," a KT&G official said. "Going forward, we will do our utmost to increase shareholder value by building a virtuous cycle of earnings growth and expanded shareholder returns."