Gudang Garam's nine-month profit up

Gudang Garam's nine-month profit up

JAKARTA: Indonesia's largest cigarette producer, PT Gudang Garam, Tuesday posted a nine-month net profit of Rp 1.64 trillion (US$178 million), up 6.5 percent on year.

Gudang Garam said sales during the period rose 22 percent to Rp 16.07 trillion from Rp 13.14 trillion last year, boosting net profit.

Gudang Garam is the leading seller of clove cigarettes, known locally as "kretek," which account for most of the smoking market in the country.

The company gave no details on volumes, but analysts expected the company to have boosted sales by raising prices rather than selling more sticks.

Indonesia's government has been increasing the amount of excise tax cigarette companies must contribute to state coffers, pushing producers to hike prices. In turn, volumes are falling as consumers turn to cheaper brands.

The company said operating profit for the first nine months rose 8.2 percent to Rp 2.64 trillion from Rp 2.44 trillion last year. -- Dow Jones