Earnings hit in Indonesia
Sampoerna accounted for 7 percent of PMI operating profits and 9 percent of PMI volumes in 2010. More than one out of three PMI employees worldwide work in Indonesia.
The earnings of Indonesia’s listed cigarette producers are expected to remain under pressure for the remainder of this year, according to a story in Indonesia Investments.
The companies, the story said, would face big challenges this year from fierce competition for market share, from rising taxes and from anti-tobacco regulations.
Of the four publicly-listed cigarette manufacturers in Indonesia, only Gudang Garam had reported growing net sales and profit during the first half of the year. HM Sampoerna and Wismilak Inti Makmur had seen their sales and net profits decline, while Bentoel was yet to release its results.
A finance ministry regulation from January 1 pushed the value-added tax on cigarettes up to 9.1 percent. And later that month cigarette excise tax was increased by an average of 10.54 percent.