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SEOUL, Aug. 5 (Yonhap) — KT&G Corp., South Korea’s dominant tobacco company, said Thursday its second-quarter net profit fell 16 percent from a year earlier due mainly to a strong won.
Net profit for the three months that ended in June fell to 246.4 billion won (US$215 million) from 293 billion won in the same period of last year, the company said in a regulatory filing.
“The won’s strength (against the dollar) drove down the dollar-denominated earnings (when converted into the local currency),” a company spokesman said over the phone.
Decreased equity gains from its non-tobacco subsidiary also weighed on the quarterly bottom line, he said.
Operating profit declined 16 percent to 330.14 billion won in the second quarter from 394.12 billion won a year ago. Sales rose 2.1 percent to 1.35 trillion won from 1.32 trillion won during the same period.
KT&G sold 10.34 billion cigarettes in the domestic market in the first three months, down 170 million from a year earlier. It accounted for 64 percent of the domestic cigarette market.
Its overseas sales fell 14 percent on-year to 11.9 billion cigarettes from a year earlier due to weaker demand from the Middle East.
Korea Ginseng Corp. (KGC), a wholly owned unit of the tobacco firm, saw its second-quarter sales fall 6.6 percent on-year to 259.3 billion won, with its operating income plunging 67.5 percent to 6.5 billion won.
KT&G has four tobacco manufacturing plants in South Korea, Russia, Turkey and Indonesia whose combined capacity reached 13.6 billion cigarettes a year as of last year.