China's Key Industries Report Slower Decline In Profits

BEIJING -Dow Jones reported that the decline in profits within China's key state-run companies slowed in January-July due to increased revenue from core business, State Economic and Trade Commission data published Tuesday show.

The results were reported in a notice posted on the commission's Web site, which provided an outline of the performance of 511 key companies in China's state sector.

Output by key industries as measured in constant prices rose 16.2% on year to 1.372 trillion yuan ($1=CNY8.28) in the seven-month period, 0.9 percentage point faster than the first half of 2002, the commission said.

Output by key state-run companies in China's automotive, aviation and shipbuilding sectors all rose by more than 20% on year during the seven-month period.

Revenue from core business at the companies rose 8% on year to CNY2.135 trillion during January to July. The seven-month growth rate was 1.9 percentage points faster than the first-half result, the commission said.

Revenue from core business within China's power, metallurgical, telecommunications, automotive and electronics sectors all exceeded CNY100 billion during the seven-month period, outstripping the average growth of the 511 companies.

Sales to output ratio rose 0.3 percentage point on year to 98.5% in the first seven months, up 0.2 percentage point compared with the first half of 2002.

Production for export delivery by the 511 companies rose 16.6% on year to CNY124.22 billion in the seven-month period, 2.8 percentage points faster than the first-half growth rate.

Electronic products made for export were the main contributor to the seven- month growth, rising 34.1% on year to CNY49.27 billion. This comprised 39.7% of total production for export delivery, the commission said.

Despite the improved output and revenue during the period, profits by the key companies fell 3.1% on year to CNY143.61 billion. However, the fall in profits was 5.6 percentage points slower than the decline in the first half.

Among the 29 sectors over which the companies span, 22 reported net profits, suggesting that the remaining seven sectors reported net losses during the seven-month period.

Some were quite strong, such as the automotive sector, in which major companies saw a 33.7% on year net profit rise to CNY10.57 billion in the seven- month period.

Among the 511 companies, 111 reported net losses at the end of July, four fewer than at the end of June. Total losses at end-July rose 3.7% on year to CNY8.21 billion, the commission said.