JAKARTA, NETRALNEWS.COM - Indonesia-based cigarette manufacturer PT Gudang Garam Tbk (IDX:GGRM) has reported that the company's cigarette sales volume decreased by 8.8% to 42.5 billion cigarettes in the period of January to June 2020. The weakening of cigarette sales volume is attributed to the COVID-19 coronavirus outbreak.
In a press release on the Indonesia Stock Exchange (IDX), Monday (24/8/2020), Gudang Garam's management said full flavor machine-rolled kretek (clove) cigarette (SKM FF) category sales volume fell 6.6% to 35.8 billion cigarettes, while low-tar low-nicotine machine-rolled clove (SMK LTN) cigarette sales volume slumped 45.6% to 2.3 billion cigarettes.
"Hand-rolled clove cigarettes (SKT) was the only segment that recorded growth, namely 7.5% to 4.5 billion cigarettes," the management reported.
This decline is in line with weaker industrial sales. Based on Nielsen's market research data, quoted by Gudang Garam, the industry's total sales volume fell 12.8 percent to 110.4 billion units.
From the financial side, GGRM recorded a slight growth in operating income, namely by 1.7% to IDR 53.7 trillion as compared to IDR 52.7 trillion in the first half of 2019.
"This revenue growth is due to an increase in sales prices," the management explained.
Meanwhile, excise expenses, including VAT and cigarette taxes reached 79.5% of the company's total sales costs during the first semester of 2020, slightly higher compared to 78.4% in the same period last year.
Moreover, Gudang Garam's gross profit fell by 13% to IDR8.7 trillion from IDR10 trillion previously.
Comprehensive income in the first semester of 2020 was recorded to have decreased by 10.7% from IDR 4.3 trillion to IDR 3.8 trillion.
The management of GGRM added that the COVID-19 pandemic has made the challenge even more difficult because people's purchasing power is being depressed, especially the lower class.
"Gudang Garam will continue to be on alert and monitor this development carefully," they added.