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China's state companies expect 30% drop in 2008 profits

(Xinhua)
Updated: 2009-01-05 19:17

BEIJING - Profits at China's centrally-administered state-owned enterprises (SOEs) are expected to fall 30 percent in 2008 from a year earlier, the first annual decline since 2002, figures from the state assets watchdog showed Monday.

Profits in the 142 SOE giants would total 700 billion yuan (about US$103 billion) last year, Huang Shuhe, deputy director of the State-owned Assets Supervision and Management Commission (SASAC) told a conference here Monday.

Natural disasters, government-capped energy prices and the ongoing global financial crisis all contributed to the decline, Huang said.

Sales revenue in these companies, however, increased 20 percent year-on-year to 11.5 trillion yuan last year, according to the SASAC.

The central SOEs reported 130 billion yuan in economic losses because of the natural disasters last year, including the snowstorms in early 2008 and the deadly earthquake in May. A total of 200 billion yuan would be needed for post-disaster reconstruction.

The global financial crisis also posed serious challenges to the central SOEs with falling market demands, shrinking financing channels and heavy investment losses.

The metallurgy, transportation, petrochemical, electricity, auto and tourism industries were the worst affected, according to the SASAC.

Meanwhile, the government-capped pricing on petroleum and electricity to curb inflation and stabilize domestic market led to more than 260 billion yuan losses in oil refiners, power companies and grid operators.