Baca berita tanpa iklan. Gabung Kompas.com+

Gudang Garam Projected to Report Lower Earnings Due to Excise Hike

June 15, 2020, 09.14 PM

JAKARTA, KOMPAS.com – Indonesian cigarette and tobacco giant PT Gudang Garam Tbk is projected to announce a 25-percent decrease in profit earnings. 

The reduced profit earnings is attributed not to the outbreak of Covid-19 in Indonesia but to the hike in tobacco excise.

The landmark tobacco excise is regulated by Ministry of Finance Regulation Number 152/PMK.010/2019 on Cigarette Excise.

The law seeks to reduce the smoking prevalence in Indonesia by raising tobacco excise by 23 percent and the retail cigarette price excise by 35 percent.

Also Read: Indonesian Government Looks to 2023 for an Economic Rebound

According to Statistics Indonesia, the average money spent on cigarette purchases in 2019 was bigger than that for purchasing rice.

The average Indonesian would spend 5.57 percent of their monthly earnings on cigarette purchases. These purchases equal the combined expenses on milk, eggs, and vegetables.

“The Consolidated Financial Statements as per March 31, 2020 did not indicate a drop yet" in Gudang Garam's earnings, said Corporate Secretary of the Indonesian Stock Exchange Heru Budiman on June 15. "However, sales profit, revenue, and sales volume of the company have dipped compared to 2019 as a result of the relatively high tobacco excise as well as weaker consumer spending.” 

The Covid-19 pandemic in 2020 has been a challenge in itself. Coupled with weaker consumer spending, the outbreak is poised to put pressure on Gudang Garam’s demand this year.

Also Read: Airlines and Hotels in Indonesia Need 2 Years to Recover Post Pandemic

“From April until today, the sales volume has clearly indicated a sharp decline,” added Heru.

Amid the pandemic, Gudang Garam has not laid off workers. In 2020, Gudang Garam has 32,208 employees in comparison to December 2019 when it had 32,491 staff members.

Gudang Garam has strived to meet consumer demand while upholding the health protocols issued by the Indonesian Ministry of Health and the World Health Organization.

Contribution of excise hike

Vice Minister of Finance Suhasil Nazara said that Indonesia’s earnings from customs and excise increased by 19.17 percent in April 2020.

“The growth was driven by excise earnings specifically the tobacco excise which increased 25.08 percent,” Suhasil said.

During that period, cigarette manufacturers made advanced orders for tobacco in anticipation of Indonesia’s large-scale social restrictions (PSBB).

The tobacco industry’s concern was that uneven implementation and duration of PSBB would disrupt cigarette distribution. 

(Writer: Kiki Safitri | Editor: Bambang P. Jatmiko) 

Source: https://money.kompas.com/read/2020/06/15/190600326/gudang-garam-proyeksikan-pendapatan-terpangkas-akibat-kenaikan-cukai-rokok

Simak breaking news dan berita pilihan kami langsung di ponselmu. Pilih saluran andalanmu akses berita Kompas.com WhatsApp Channel : https://www.whatsapp.com/channel/0029VaFPbedBPzjZrk13HO3D. Pastikan kamu sudah install aplikasi WhatsApp ya.



Comment wisely and responsibly. Comments are entirely the responsibility of the commentator as regulated in the ITE Law
Report
Thank You! We have received your report. We will remove comments that conflict with the Community Guidelines and the ITE Law.

More Headlines

News
April 14, 2023, 12.38 PM

Indonesia Detects New Covid Arcturus Variant

Baca berita tanpa iklan. Gabung Kompas.com+
Baca berita tanpa iklan. Gabung Kompas.com+

MOST POPULAR

Baca berita tanpa iklan. Gabung Kompas.com+
Baca berita tanpa iklan. Gabung Kompas.com+
Close Ads
Oke