- New shareholder return policy to include KRW 1.8 trillion dividend, KRW 1 trillion share buyback & cancellation, and cancellation of existing treasury shares
SEOUL, South Korea, Nov. 14, 2023 /PRNewswire/ -- KT&G Corporation("KT&G" or the "Company") (KRX:033780), South Korea's leading tobacco manufacturer, hosted 'Value Day 2023' on November 13, 2023.
The event took place in an online conference setting, and was streamed live on KT&G's official website. At the conference, KT&G outlined its shareholder return plans for 2024-2026 and delivered updates on the progress towards the company's future vision that focuses on three core business areas: Next Generation Product, Overseas Cigarette, and Health Functional Food.
KT&G reiterated its unwavering commitment to long-term shareholder value creation with the announcement of a new shareholder return policy totaling KRW 2.8 trillion over the next three years. The plan encompasses KRW 1.8 trillion in cash dividend and KRW 1 trillion allocated for share buyback and cancellation. In addition to cancelling newly acquired shares, KT&G also plans to cancel approximately half of its existing treasury shares, equivalent to around 10 million shares (approximately 7.5% of its shares issued) over the next three years.
KT&G has consistently pursued an active shareholder return policy since its listing, demonstrated by an impressive total shareholder return rate of 93% from 2021 to 2023. This surpasses the average total shareholder return rate of the Global Big 4 tobacco companies over the last three years (81%) and also exceeds the average of top 10 Korean companies by market capitalization (22%). As part of the three-year shareholder return policy KT&G has previously announced in 2021, the company has acquired 3.47 million of its own shares (KRW 0.3 trillion) for cancellation during the third quarter and executed its first ever interim dividend.
KT&G also provided updates on its mid-to-long-term growth investment plans previously unveiled at its Investor Day held in January. At its Investor Day, KT&G had presented 'Global Top-tier' vision and outlined growth strategies that focus on three core business areas.
In line with the growth strategies, KT&G made significant growth investments in Indonesia and Kazakhstan in September and October, respectively. KT&G conducted an investment support ceremony with the Indonesian Ministry of Investment to discuss the establishment of its new manufacturing plant in Indonesia. The company also embarked on the construction of a cutting-edge hybrid production facility in Kazakhstan, designed to accommodate the production of both Heat Not Burn consumables and combustible products.
KT&G aims to expand the production capacity of its Next Generation Product and Overseas Cigarette business sectors to respond to the growing demand in both domestic and overseas markets. The company expects to secure price competitiveness and profitability by achieving economies of scale.
"We have achieved consistent revenue growth over the past years by developing a well-balanced business portfolio. We are now focusing on strengthening the global competitiveness of our core business areas and restructuring our business portfolio with an emphasis on overseas business. We will continue to make progress as a 'Global Top-tier' company by continuously delivering strong business results and enhancing shareholder value," said KT&G spokesperson.