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September 19, 2009

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Home » Business » Economy

SOEs post profit decline of US$119b

PROFIT growth in auto and petrochemical companies narrowed the earnings decline of state-owned enterprises in the first eight months of this year, signaling some strength may be returning to the heavy industrial sector.

Aggregate profits fell 19.6 percent from a year earlier to 813.5 billion yuan (US$119 billion). That followed a 22.8 percent slump in July and a 27 percent slide in the first half, the Ministry of Finance said on its Website yesterday.

SOEs in August recorded a month-on-month profit gain of 4.3 percent to 127.3 billion yuan, according to Shanghai Daily's calculations.

"Most state-owned enterprises have made improvements since the second quarter, though profit growth still lags growth in the economy," said Ye Bingnan, analyst at BOC International.

"Profits of heavy industry are expected to improve as the effects of the government's massive stimulus package ripple through the economy," Ye added.

The slower decline in state-owned enterprise profits came after national economic data showed industrial output in August accelerated at a faster-than-expected 12.3 percent pace.

In addition to profit gains in autos and petrochemicals, steel, nonferrous metals, petroleum and machinery sectors narrowed their profit declines, the ministry said.

On the revenue front, the sales of state-owned enterprises in the first eight months of the year dropped 3.5 percent to 13.68 trillion yuan, compared with a 4.7 percent decline in the first seven months.

In the narrower pool of 136 companies directly administrated by the central government, combined profit in the January-August period fell 16.4 percent to 481.78 billion yuan, the State-Owned Assets Supervision and Administration Commission said yesterday.


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