SKM Segment’s Lustrous Performance
GGRM succeeded in posting growth of 9.2% in sales from IDR76.2 trillion in 2016 into IDR83.3 trillion in 2017. 2017 growth in sales was higher than 2016 growth of 8.4% in sales. The machine-made kretek (SKM)—contributing 88% to the total sales and surging by 9.3% from IDR68.4 trillion in 2016 into IDR74.8 trillion in 2017—is the biggest bolsters to the sales growth.

We oversee that net revenues, excluding taxes, remained to hike higher than 11% amid the surge of 10.4% in 2017 excise cigarette. It indicated GGRM’s robust pricing power. In light of its robust pricing power, we project that in 2018 net revenues, excluding taxes, remains to top 11% despite the increase of 11.3% in excise imposed on machine-made kretek (SKM) I tier; therefore, net revenues are estimated to hike by 9.4% amid the downtrend of national cigarette production figures as of 2016.


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