Hanjaya Mandala Sampoerna Maintains Leadership in Indonesia's Tobacco Industry in 2024

Sampoerna maintains tobacco industry leadership in Indonesia, with 28% net profit growth, expanding smoke-free products, and new leadership appointments.

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Bijay Laxmi
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Hanjaya Mandala Sampoerna Maintains Leadership in Indonesia's Tobacco Industry in 2024

Hanjaya Mandala Sampoerna Maintains Leadership in Indonesia's Tobacco Industry in 2024

PT HM Sampoerna Tbk (HMSP) has maintained its leadership position in Indonesia's tobacco industry in 2024, reporting a 28% growth in net profit compared to the previous year. The company's strong portfolio across all segments, particularly the growth in the labor-intensive Hand-Rolled Cigarette (SKT) segment, contributed to its success, with a market share of 28.6% and a total volume of 83.4 billion sticks.

Despite facing challenges such as significant excise tax hikes, a widening tax gap between volume segments, and the increasing circulation of illegal cigarettes, Sampoerna's net sales increased by 4.3% to Rp 116.0 trillion. The company also made strategic milestones in its smoke-free product portfolio, with IQOS capturing a 3.5% market share in the Greater Jakarta area in Q4 2023, up 2.0 percentage points from the previous year.

Why this matters: Sampoerna's continued leadership in Indonesia's tobacco industry, despite various challenges, demonstrates the company's resilience and adaptability in a dynamic market. The growth in the labor-intensive SKT segment and the progress in smoke-free products highlight the company's commitment to both traditional and innovative offerings, which have significant implications for employment and public health in Indonesia.

Sampoerna invested in its smoke-free product facilities, inaugurating the Karawang production facility and introducing the latest IQOS ILUMA innovation. The company also opened a world-class Testing and Analysis Laboratory for its smoke-free tobacco products. In the SKT segment, Sampoerna added production facilities and Cigarette Production Partners (MPS), directly impacting the employment of tens of thousands of new workers.

At the Annual General Meeting of Shareholders, the company announced a total dividend payment of Rp 8.060 trillion from the company's retained earnings for the fiscal year ended December 31, 2023, with a dividend payout ratio of 99.6% or Rp 69.3 per share. The shareholders also approved the appointment of Ivan Cahyadi as the new President Director of Sampoerna, effective May 1, 2024, and Yohan Lesmana as a Director of the company.

Sampoerna's President Director, Vassilis Gkatzelis, stated, "Sampoerna's 2023 performance shows the company's resilience and adaptability in navigating a challenging business environment while maintaining its leadership position in the Indonesian tobacco industry. We remain committed to delivering sustainable growth and creating value for our stakeholders."

Key Takeaways

  • Sampoerna maintained leadership in Indonesia's tobacco industry, with 28% net profit growth.
  • Sampoerna's SKT segment and smoke-free products drove growth, despite industry challenges.
  • Sampoerna invested in production facilities, impacting employment of tens of thousands of workers.
  • Sampoerna paid Rp 8.060 trillion in dividends, with a 99.6% payout ratio.
  • Sampoerna appointed Ivan Cahyadi as the new President Director, effective May 1, 2024.