Q2 2024 KT&G Corp Earnings Call Transcript
Key Points
- KT&G Corp (XKRX:033780) reported a 6.6% year-over-year increase in consolidated revenue for Q2 2024, reaching KRW1.438 trillion.
- Operating profit saw a significant 30.6% year-over-year growth, amounting to KRW321.5 billion.
- Net income surged by 57.5% year-over-year to KRW318 billion, driven by operating profit growth and favorable FX movements.
- The tobacco business, the company's main revenue driver, experienced an 11.5% increase in revenue and a 30.4% rise in profits.
- The Global CC business achieved record-high quarterly revenue, with a 35.3% year-over-year increase in revenue and a 139.1% rise in operating profits.
- Higher manufacturing costs per pack due to global inflation negatively impacted the tobacco business by KRW37.6 billion.
- The real estate business saw a 29.2% year-over-year decline in revenue to KRW80.5 billion, and operating profit dropped by 79.6% to KRW2.9 billion.
- Health functional food (HFF) business faced a 1.6% year-over-year increase in revenue but still reported a KRW1.5 billion loss for the quarter.
- Global NGP revenues declined by 8.8% year-over-year to KRW60.4 billion due to inventory adjustments for high unit price devices.
- The company revised its 2024 consolidated revenue growth projection from 10%-10.5% to 2.5%-3%, and operating profit growth is now expected to remain flat compared to the previous year.
Ladies and gentlemen, I am Leon Yongbum Kim, Head of Finance Office at KT&G. Thank you for attending KT&G's 2024 second quarter earnings report. Please allow me to first introduce the KT&G management team in attendance today.
With us today, we have Mr. Sanghak Lee, Chief Financial Officer of KT&G; Mr. [Jong-hoon ha], Chief of Strategy and Planning; Mr. Kwang-Seok Park, Chief of Real Estate Business; Mr. [Min-Seok Kwang], Chief of Global Business, Mr. [Jaha Yong Zhou], Head of NGP Office, Mr. Yeong Chan Yoon, Chief of Marketing; and [Mr. Yong Chan Yoon], Chief strategy at KT&G.
Please be advised that the earnings we're about the present today have yet to be audited by the outside auditor. Therefore are subject to change in the audit process. And any forward-looking information discussed in this call today may differ from the actual results to be reported in the future.
Before we go into 2024 second quarter results, Sanghak Lee, our CFO and CSO will share with you some key updates on our business
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