Sampoerna remains profitable

| March 3, 2016

Still on a roll

Hanjaya Mandala Sampoerna reported net income of IDR10.4 trillion ($780 million) in 2015, up 1.8 percent from a year earlier, reports The Jakarta Globe citing a March 2 company statement to the Indonesia Stock Exchange.

Net sales increased 10 percent to IDR89.1 trillion as Sampoerna continued to benefits from Indonesia’s high smoking prevalence.

A 2011 World Health Organization survey showed that more than a third of the country’s population above 15 years old are smokers, despite heavy excise imposed by the governments.

Including hand-rolled kreteks, Indonesia recently overtook Russia as the world’s largest tobacco market after China.

Excise accounts for more than 70 percent of the cost of Sampoerna’s cigarettes.

Sampoerna remains the largest tax payer in the country, contributing IDR54 trillion, or a more than a third of the government’s excise revenue in 2015. It paid IDR40 trillion in excise in 2014.

The government raised its cigarette excise twice last year in order to meet the state budget’s revenue target, which took a hit from weakening commodities price and a lower export performance.

It has also required cigarette makers to display pictorial warnings on packages since June 2014.

Category: Breaking News

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