South Korea’s tobacco maker KT&G Corp. reported record high overseas sales of 1.05 trillion won ($979 million) last year mainly driven by solid demand for its steady sellers ESSE and PINE cigarette brands in Russia and the Middle East.

The company announced on Thursday that its overseas sales reached 1.05 trillion won, up 57 percent from 941.4 billion won in 2016. It sold 55.4 billion cigarettes worldwide last year, up 13.8 percent from 48.7 billion cigarettes in 2016.

Main drivers behind the record cigarette sales were steady sales of its ESSE and PINE brands in its key markets in Russia and the Middle East, the company said. The company has also recently released new products tailor-made to meet the needs of local people in Africa and Latin America, which is expected to help the company’s overseas sales increase further.

Its foreign market sales amounting to just 2.6 billion cigarettes in 1999 began to increase rapidly in 2002 after privatization, growing more than 20-fold over the last 18 years. It has now become the world’s fifth largest tobacco maker that has global operations in more than 50 countries and runs manufacturing facilities in Russia, Turkey and Indonesia to provide quick and easy supply in the local markets.

The company nevertheless reported that operating profit for the fourth quarter ended December fell 26.9 percent to 222.5 billion won on a consolidated basis from the same period a year ago. Sales dropped 5.1 percent to 1.05 trillion won while net profit declined 14.5 percent to 346.4 billion won.

Shares of KT&G ended Thursday up 0.94 percent at 107,500 won.

The company attributed poor earnings to a fall in sales in local market and foreign exchange losses caused by the appreciated value of the Korean won against the U.S. dollar. The strong won makes the value of dollar-denominated earnings of Korean exporters drop when converted into the local currency. The Korean won climbed almost 13 percent against the dollar last year.

For full 2017, the company posted 1.43 trillion won in operating profit, down 3.0 percent from the previous year. Sales rose 3.6 percent to 4.67 trillion won while net profit slid 5.0 percent to 1.16 trillion won.

The company said sales from three business sectors - domestic cigarette sales, overseas cigarette sales and red ginseng products - all exceeded 1 trillion won last year.

In a separate filing, KT&G announced that it will increase dividend payout by 11.1 percent from 3,600 won per share last year to 4,000 won this year.

By Hwang Soon-min and Choi Mira

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]