Indonesia's Sampoerna H1 net Profit up 9.5 pct

Source from:  JAKARTA, July 31 (Reuters) 08/01/2007

Indonesia's second-largest tobacco company, PT Handaya Mandala Sampoerna , reported on Tuesday a 9.5 percent rise in its first half net profit, benefiting from a recovery in consumer spending. A sharp fall in inflation, which hit around six-year highs in late 2005 after the government hiked domestic fuel prices, is helping the country's consumer sector, including tobacco companies. Sampoerna booked a net profit of 2.07 trillion rupiah ($224.9 million) in the January-June period, up from 1.89 trillion a year ago. The profit growth came despite its sales revenue slipping by around 1 percent from a year ago to 14.4 trillion rupiah. The company, controlled by Philip Morris International, the tobacco arm of Altria Group , did not elaborate on the results. On Monday, Sampoerna's main rival, PT Gudang Garam Tbk , reported a 30.4 percent rise in its first-half net profit, thanks partly to lower operating expenses. Indonesia's $8 billion tobacco industry accounts for about 10 percent of the tax revenue in the world's fifth largest tobacco market. The government is forecasting a 3 percent increase in cigarette production this year to 224 billion sticks. Sampoerna's products are aimed at a niche, younger market, less sensitive to prices. Gudang Garam has been mostly pursuing a mass market approach. While the number of smokers in many Western countries has fallen in recent years, experts say more than a third of Indonesia's population smokes today compared with a little over 25 percent about a decade ago. ($1=9,205 rupiah) Enditem