JAKARTA (TheInsiderStories) - Indonesia’s cigarette maker, PT Hanjaya Mandala Sampoerna Tbk (IDX: HMSP), split each of its shares into 25 shares in a move to increase its liquidity and attract more retail investors. The cigarette maker 92.5 percent-owned by Philip Morris International.
Under the scheme, each one share will receive 25 new shares, which will increase the number of outstanding shares to 116.32 billion shares from 4.65 billion shares at present.
On April 26, the company’s shares closed at Rp92,500 a share, which makes the trading of its shares to be illiquid.
“We believe that the stock split will make the price of the shares to be more affordable, therefore attracting interest of investors,” HM Sampoerna President Director Paul Janelle said.
In the first quarter of 2016, the company posted revenues of Rp21.9 trillion, up 1.7% from the same quarter last year of Rp21.6 trillion, while net profit reached Rp3.1 trillion, up 7.6% from Rp2.9 trillion a year earlier.
HM Sampoerna, which is controlled by Philip Morris International Inc., currently controlled 34.1% of Indonesia’s cigarette market share.
Industry-wise, Sampoerna expects cigarette industry to decline by 1-2% this year, following the government’s decision to raise excise tax by 15 percent.
Philip Morris took over the company in a $5.2 billion deal in 2005.