Sampoerna profit up 35% to Rp 353 billion
Sampoerna profit up 35% to Rp 353 billion
JAKARTA (JP): PT Handjaya Mandala Sampoerna, a publicly listed cigarette maker, reported a 35-percent increase in its after-tax profit to Rp 353 billion (US$152.6 million) last year.
The company's president, Putera Sampoerna, told reporters after an annual meeting with investors yesterday that the profit was generated by a 23-percent increase in total sales, which were supported by a 16-percent increase in the retail prices of clove- blended cigarettes(kretek) in nine major cities in the country.
The firm's net sales reached Rp 1.66 trillion last year as compared to Rp 1.35 trillion in 1994.
The sales of the company's flagship brand, Dji Sam Soe, rose from 8.8 billion cigarettes in 1994 to more than ten billion last year.
Sales of the company's low tar and low nicotine A-Mild brands also rose over 118 percent.
Putera said that the company's marketing efforts over the last few years have established an image for A-Mild, which will further strengthen the company's position in the cigarette market.
"Moreover, A-Mild is the sole low tar kretek product in Indonesia. A survey conducted by Survey Research Indonesia showed that the image of A-Mild is now on par with the foreign brand Marlboro," he added.
A director of the company, Eka D. Kasih, forecast that the company's net sales would reach Rp 2.4 trillion this year and Rp 2.7 trillion next year.
"We expect to book Rp 440 billion in net profit this year and about Rp 590 billion next year," said Eka.
Putera explained that the company will continue to expand its production and marketing activities in the Philippines, Myanmar, Vietnam and Malaysia with a total investment of S$63 million (US$44.6 million).
"The share of kretek products has reached 20 percent of the total cigarette market in Malaysia. But Gudang Garam (produced by Sampoerna's main competitor PT Gudang Garam) still controls about 90 percent of the kretek market," Putera said.
However, he added, his company has promising growth prospects there, particularly because the Malaysian government has limited the tar content of kretek cigarettes to be sold in that country to a maximum of 20 mg. (08)