Constrained Profit Margin
HMSP posted the growth of 2.5% in sales from IDR22.5 trillion in the 1Q17 sales into IDR23.1 trillion in the 1Q18 sales. However, its net profit edged down by 8% from IDR 3.29 trillion in 1Q17 into IDR3.03 trillion in 1Q18. The hike of 11% in excise duties imposed on cigarette is the logical takeaway for the decline in profit growth because the soaring excise duties resulted in the soaring portion of excise duties to sales from 45% in 1Q17 into 51% in 1Q18.

Soaring Excise Duties Mounts Inflation
The total cigarette sales volume in Indonesia edged down 2.3% from 71 billion cigarettes in 1Q17 into 69.3 billion cigarettes in 1Q18. The tumble was attributable to the hike in excises duties mounting inflation in Indonesia. In 2018, it is estimated that the cigarette sales volume in Indonesia will edge down by 1%–3% in 2018.


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