Sound Sales Growth
GGRM succeeded to post the growth of 10.1% in sales from IDR19.97 trillion in 1Q17 into IDR21.98 trillion in 1Q18. The sound sales performance was not followed by its peer — HMSP posted the lower sales growth of 2.5% y-y in 1Q18. The success of machine–made clove cigarette (SKM) — the biggest contributor of 90% to the overall sales — in posting the growth of 10.1% from IDR17.94 in 1Q17 into IDR19.76 in 1Q18 was the potent driver for GGRM’s sound sales performance

Soaring COGS Stunting Profit Growth
Despite the growth of 10.1% in top line, GGRM’s net profit only nudged up 0.1% from IDR1.890 trillion in 1Q17 into IDR1.892 trillion in 1Q18. Its gross margin whittling away from 22% in 1Q17 into 20% in 1Q18 stunted its profit growth. The soaring COGS stemmed from the higher use of finished goods by 3.8% y-y in 1Q18.

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