Cigarette Producers Sampoerna Mild And Dji Sam Soe Will Distribute Dividends Of IDR 8.06 Trillion

President Director of Sampoerna Vassilis Gkatzelis. Photo: (Doc HM Sampoerna)

JAKARTA PT HM Sampoerna Tbk (HMSP) has decided to distribute dividends of IDR 8.06 trillion years to shareholders.

This was decided at the Annual General Meeting of Shareholders (AGMS) on Tuesday, April 23, 2024.

"At the Annual General Meeting of Shareholders today, the Company announced a total dividend payment of IDR 8.060 trillion from the Company's profit balance for the financial year ending December 31, 2023, with a dividend payment ratio of 99.6 percent or IDR 69.3 per share," Sampoerna President Director Vassilis Gkatzelis said in his official statement, Tuesday, April 23, 2024.

Meanwhile, HMSP's net profit in performance throughout 2023 increased by 28 percent to IDR 8.1 trillion compared to 2022 which was valued at IDR 6.3 trillion.

Throughout 2023, HMSP's net sales will increase to IDR 115.9 trillion in 2023 when compared to IDR 111.2 trillion in the previous year.

According to Vassilis, this maintains the performance of HMSP in the Indonesian tobacco industry with a market share of 28.6 percent and an overall volume of 83.4 billion sticks thanks to a strong portfolio across segments, especially the growth of the Hand Kretek Cigarette segment (SKT) which is labor-intensive.

"The year 2023 marks the year of the return of strong profitability growth for Sampoerna, with important achievements in developing smoke-free products based on scientific evidence, increasing investment and employment in Indonesia, and producing strong multiplier effects, in line with the country's priorities to increase downstreaming," said Vassilis.

Vassilis said that currently, the tobacco industry is still facing major challenges with a significant two-digit excise rate increase above the inflation rate, a larger excise gap between the Group 1 Volume segment and the segment below the Class 1 Volume which is subject to lower excise, as well as increased circulation of illegal cigarettes.

Overall, the national cigarette industry's volume has decreased by 4 percent compared to 2022.

Despite the challenging conditions, Sampoerna's net sales increased by 4.3 percent to IDR 116 trillion, although profitability was still well below pre-pandemic levels.

As for 2023, Sampoerna's smoke-free products achieved strategic achievements. In the Jakarta Urban area, IQOS achieved a market share of 3.5 percent in the fourth quarter of 2023, an increase of 2 points from the fourth quarter of 2022.

The city of Jakarta represents West, Central and South Jakarta which covers about 1.5 million Adult Nikotin Users.

Vassilis said that along with strategic priorities to accelerate the commercialization of smoke-free innovative tobacco products, Sampoerna also made several important moments in 2023, starting with the inauguration of Karawang production facilities and the release of its first export with the introduction of IQOS ILUMA's latest innovation to be exclusively used with TERSEA tobacco bars.

Furthermore, the operation of a world-class Testing and Analysis Laboratory with advanced facilities for smoke-free innovative tobacco products began in the third quarter; and followed by the introduction of clove edition TERAEA tobacco stalks for adult smokers and users of adult tobacco/nicotin products in Indonesia.

In addition, Vassilis said that until the end of 2023, the company also invested in smoke-free products of around 300 million US dollars.

The company's production facilities for smoke-free tobacco products are the first for Philip Morris International (PMI) in Southeast Asia and the seventh in the world, and are focused on exports to the Asia Pacific region as well as meeting domestic market demand in line with the government's downstream agenda.

"The Laboratory on Testing and Analysis for smoke-free innovative tobacco products involves more than 200 talented Indonesian scientists and is part of our commitment to absorbing high-skill labor, particularly in supporting the transformation of the national tobacco industry," Vassilis said.

Meanwhile, the performance of the SKT segment shows signs of recovery with a market share of 28 percent in 2023 after experiencing a downward trend in sustainable market share from 37 percent in 2006 to 17 percent in 2019.

In addition, this is supported by the Government's policy regarding excise duty on tobacco products which considers the absorption of labor and tobacco and cloves from local farmers. Along with this, Sampoerna added the production facilities for SKT and Cigarette Production Partners (MPS) in early 2024 which had a direct impact on the absorption of tens of thousands of new workers.

Vassilis conveyed that with this addition, Sampoerna's total workforce directly and indirectly became more than 90,000 people.

"Entering 111 years of Sampoerna taking part in Indonesia, we continue to consistently strive to play an active role in supporting national economic growth through long-term investment, creating economic value in all industrial chains, and absorbing labor which is expected to contribute to the creation of multiple effects in Indonesia," said Vassilis.