Sampoerna's revenue up on price increase

The Jakarta Post Jakarta

The country's second largest cigarette producer PT HM Sampoerna announced on Monday that it had recorded a slight rise in sales revenue in the first nine months of this year amid a decline in sales volume.

In a statement, the company said that as of the end of September its sales increased by 3 percent to Rp 10.8 trillion (US$1.3 billion) from Rp 10.5 trillion a year earlier.

The company said that the rise was mostly attributed to the increase in the price of its products, following the surge in the cigarette excise rate set by the government.

Late last year, the government increased the excise tax on cigarettes, which led cigarette companies to increase cigarette prices.

Since 1999, the government has hiked clove cigarette prices five times. For example, the price of machine-made clove cigarettes has been raised from between Rp 110 and Rp 225 per cigarette in 1999, to between Rp 320 and Rp 400 at present.

Sampoerna said that in the first nine months of this year, the sales volume of its machine-rolled cigarettes fell by 3 percent to 10.28 billion cigarettes, from 10.65 billion a year earlier. Meanwhile, the sales volume of its hand-rolled cigarettes dropped by 11 percent to 17.16 billion cigarettes, from 19.24 billion.

Sales of hand-rolled cigarettes provide the largest portion of the company's revenue. In the first nine months of this year this type of cigarette contributed Rp 7.17 trillion to total sales, while the machine-rolled cigarettes accounted for Rp 3.71 trillion of sales.

Sampoerna said that its legendary hand-rolled Dji Sam Soe brand remained the company's best seller. In the first nine months of the year Sampoerna sold 12.15 billion cigarettes, down by 8 percent from 13.16 billion a year earlier.

Dji Sam Soe also contributed more than 50 percent to Sampoerna's total revenue with Rp 5.56 trillion as of September this year, up from Rp 5.52 trillion in the same period of last year.