Gudang Garam Tbk (GGRM) has recorded sales reaching IDR 40.2 trillion in the first half of 2017, up 8.9 percent over the same period last year. The company’s sales growth is above the domestic cigarette industry performance which actually recorded a decline.
The sales increase boosted the company’s net profit by 8.8 percent to IDR 3.1 trillion. This allowed the company to maintain its net profit margin of 7.8 percent despite the decline in gross profit margin and operating profit margin.
The total sales volume rose by 2.4 percent to 38.6 billion cigarettes. In the hand-rolled cigarette category, sales volume increased by 3.7 percent to 4.3 billion cigarettes, as well as low tar nicotine machine-rolled cigarettes by 2.3 percent to 4.7 billion cigarettes. Full Flavor machine-rolled cigarettes also grew by 2.2 percent to 29.6 billion cigarettes.
Based on Nielsen market data, the total sales volume of the domestic cigarette industry dropped by 0.8 percent to 140.8 billion cigarettes. This was influenced by the decline recorded in the hand-rolled cigarettes by 6.6 percent to 25.8 billion cigarettes, white cigarette by 8.4 percent to 7.6 billion cigarettes, and low tar nicotine machine-rolled cigarettes by 2.7 percent to 54 billion cigarettes. Meanwhile, Full Flavor machine-rolled cigarettes increased by 5.7 percent to 53.3 billion cigarettes.
“Gross profit margin slumped from 21.7 to 20.9 percent as the cost of excise stamps, VAT and cigarette taxes increased by 15.5 percent to IDR 24.3 trillion or 76 percent of the total cost of sales,” said the management. Operating profit margin also fell from 12 to 11.4 percent due to an increase in operating expenses by 4.8 percent to IDR 3.9 trillion.
On Thursday (31/8), GGRM rose 0.15 percent to IDR 68,950. (*)