Jakarta. Indonesian cigarette maker Gudang Garam (GGRM) reported first-quarter 2026 net profit of Rp 1.5 trillion ($86.5 million), marking its highest quarterly earnings since 2023.

The result already accounts for roughly half of the company’s projected full-year net profit.

The figure represents a sharp increase from Rp 104 billion in the first quarter of 2025 and Rp 450 billion in the fourth quarter of 2025.

Everson Sugianto, an investment analyst at Stockbit Sekuritas, said the surge was driven by Gudang Garam’s pricing strategy, combined with the government’s decision not to raise tobacco excise in 2026.

“This is reflected in the proportion of excise to revenue, which declined to 71% compared with 74% in the first quarter of 2025,” Everson said on Thursday.

“Any increase in average selling prices directly improves profit margins, given that excise rates have not been raised this year,” he added.

Costs Fall, Margins Improve
Cost of goods sold fell 34% year-on-year, supported by lower raw material costs and favorable inventory movements.

Despite the strong earnings growth, Gudang Garam’s revenue declined 13% year-on-year in the first quarter of 2026.

Shares of Gudang Garam closed 1.1% higher at Rp 16,000 on Thursday on the Indonesia Stock Exchange.

Over the past week, the stock has climbed 14.9%, while gaining 15.5% over the past month. Year-to-date, GGRM shares have risen 14.29%.