Blommberg

Blommberg Jakarta

PT H.M. Sampoerna, Indonesia's No. 2 cigarette maker by sales, had a 51 percent gain in second-quarter profit, aided by higher prices and local demand.

Net income rose to Rp 516.6 billion (US$57 million) in the three months ended June 30 from Rp 342.9 billion a year ago. Sales increased 24 percent to Rp 4.31 trillion. The figures were derived by subtracting first-quarter numbers from six-month figures released by the company on Friday.

Surabaya, East Java-based Sampoerna said in July combined volume sales of cigarette companies in Indonesia, a nation of 235 million people, may grow as much as 10 percent this year as faster economic expansion boosts cigarette purchases. Spending by political candidates during this year's elections may also boost sales in a market of 141 million smokers, the company said.

The company said in its earnings announcement today it raised prices since the second half of last year. No details of the price increase were given.

More than 153 million Indonesians will vote in the final round of polling next week to choose directly for the first time their president and vice president. The first round was held in July after a parliamentary election in April.

Political parties distributed everything from cigarettes to milk for infants to garner support during the campaigning, which helped Sampoerna's sales. The parties may spend as much as $1.75 billion this year for the elections, Asian Development Bank Senior Economist Ramesh Subramanian estimated in April.

Net income rose to Rp 1.09 trillion, or Rp 247 a share, in the six months ended June 30 from Rp 786.8 billion, or Rp 179 a share, a year earlier, Sampoerna said in an e- mailed statement. Sales rose about a fifth to Rp 8.42 trillion.

Higher sales were helped by "our flagship brands, such as Dji Sam Soe, A Mild, and Sampoerna A-Hijau," the company said in the statement.

Sampoerna sold 20.2 billion sticks in the first six months, more than the 17.7 billion sticks in the year-ago period.