Price hikes result in KT&G’s 1st-quarter profits surging

KT&G said its first-quarter operating profits and revenue have increased compared to the same period last year thanks to price hikes and improvements in its affiliates’ performances.

The nation’s No. 1 cigarette and ginseng company saw its operating profit surge nearly 65 percent year-on-year to 428.5 billion won ($395 million). Net profit grew 55 percent to 308.8 trillion won.

But although the company’s sales rose by value to 18 percent from a year ago to 1.14 trillion won by volume, because of the increased prices of cigarettes, sales have actually dropped. The company sold 7.1 billion cigarettes in the first quarter, a 41.4 percent nosedive from the first quarter of last year when it sold 12.2 billion. The price hike has helped the company earn 1,768 won in profit on inventory cigarettes per packet.

The company said it plans to spend the 330 billion won it made from additional profits on the price change to give back to the community.