Profits of major industrial firms drop in April

Source: Xinhua | 2019-05-28

CHINA’S major industrial firms posted a decline in profits year on year in April, reversing the fast growth in March, while the drop in the period from January to April was generally flat from that in the first quarter.

Profits of industrial companies with annual revenue of more than 20 million yuan (US$2.9 million) fell 3.7 percent from a year earlier last month to total 515.39 billion yuan, data from the National Bureau of Statistics showed yesterday.

In comparison, the industrial profits in March posted their fastest growth of 13.9 percent since August 2018.

For the period from January to April, the accumulated profits dropped 3.4 percent from the same period last year, down 0.1 percentage point from the first quarter.

Taking into account factors like adjustments to the statistical system, enhanced enforcement of statistics, elimination of duplicate data, reforms of enterprises and the fourth national economic census, the decline in January-April remained generally flat from the first quarter, the bureau said.

The value-added tax rate cut went into effect from April 1, resulting in the early release of demand for industrial products in March. This factor, along with the higher base figure in April last year, led to the drop in profits of major industrial enterprises last month, said Zhu Hong, a senior statistician of the industrial office at NBS.

Zhu highlighted that profits of major industries such as iron and steel, oil processing, oil extraction and chemical industry had improved.

From January to April, the oil extraction sector posted a 19.7 percent jump in profits year on year, 9.4 percentage points faster than those in the first quarter. Profits in the iron and steel, oil processing and chemical industries decreased by 28.1 percent, 50.2 percent and 16 percent year on year, respectively, of which the decline was narrowed by 16.4 percentage points, 4.3 percentage points and 1.8 percentage points, respectively, from January to March.

Meanwhile, of the 41 major industrial sectors, 27 industries posted year-on-year growth in profits. The sectors with the largest increase in profits were tobacco products with a 29.4 percent year-on-year increase; the wine, beverage and refined tea sector with 18.1 percent increase; and electrical machinery and equipment manufacturing up 14.5 percent.

State-owned enterprises also narrowed the drop by 3.7 percentage points compared with the first quarter, falling by 9.7 percent in January-April, while profits in private companies extended the growth by 4.1 percent from a year earlier.

The operating revenue of industrial enterprises rose 5.1 percent from a year earlier in the first four months to 32. 84 trillion yuan, while the operating costs increased 5.3 percent to 27.71 trillion yuan, leading to the rate of profit in operating revenue dipping by 0.48 percentage points to 5.52 percent.