The country's second largest cigarette producer Gudang Garam (GGRM), suffered an 8.6 percent drop in net profits in the first six months of this year to Rp 2.12 trillion (US$222.6 million), due to soaring costs of goods sold (COGS).
According to its unaudited financial statement released on Tuesday, Gudang Garam booked Rp 23.5 trillion in revenues during the January-to-June period, a rise of 18.6 percent from Rp 19.84 trillion in the same period last year.
Gudang Garam’s COGS soared 26.17 percent to Rp19.01 trillion, leading to a decrease in net profits to Rp 2.12 trillion, versus Rp 2.32 trillion in the first half of 2011.
On the other hand, No. 1 cigarette manufacturer PT Hanjaya Mandala Sampoerna (HMSP) performed well in the same period. Despite a 30.72 percent rise in COGS to Rp 23.02 trillion, HM Sampoerna managed to book Rp 4.88 trillion in net profits, up 26.59 percent compared to the same period last year.
The higher costs were mostly caused by swings in clove prices, as well as tobacco excises that were raised by an average of 16 percent this year.
Gudang Garam’s share price has plunged 9.55 percent so far this year to Rp 56,350 on Tuesday, the slide continuing with a decrease of 3.51 percent from Monday’s close at Rp 58,400. (yps)