HMSP - Face 4.1% decline in cigarettes sales for 1H23

HM Sampoerna (HMSP) reported a total cigarette sales volume of 40.5 bn sticks during 1H23, reflecting a slight decline from the 42.3 bn sticks sold in 1H22. The decrease in sales aligns with the broader market trend, with Indonesia's cigarette trade volume experiencing a 5.6% yoy decline in the first half of 2023 compared to the 149.5 bn sticks traded in 1H22. Notwithstanding, Sampoerna's cigarette sales increased from April to June 2023 to 20.8 bn sticks from 19.7 bn sticks from January to March 2023. This quarterly volume growth contributed to HMSP's market share, which rose from 28.5% in 1Q23 to 28.9% in 2Q23. Looking forward, the Indonesian tobacco market is expected to benefit from the growing reliance upon utilizing third-party factories, which is anticipated to drive margin growth in the latter half of 2023 despite the oning decline in sales volume of tobacco products. HM Sampoerna is well-positioned to capitalize on this catalyst and foresees operational revenue growth, supporting margin expansion despite inflationary pressures and other technical effects. The growth in Indonesia's sub-tier 1 segment further contributes to this positive outlook. (Source : Bisnis Indonesia)