China’s industrial profits up 11.6 pct in Q1

World
Europe

China’s major industrial firms reported a profit growth of 11.6 percent in the first quarter of 2018, slower from the 16.1 percent increase in January-February, data from the National Bureau of Statistics (NBS) showed Friday.

In March alone, combined profits at industrial companies each with annual revenue above 20 million yuan (about 3.2 million US dollars) amounted to 589.75 billion yuan, up 3.1 percent from one year earlier, according to the NBS.

NBS statistician He Ping attributed the slower profit growth in March mainly to lagging effect of the Spring Festival holiday, slower growth in industrial product prices, and the rising financial cost for the companies caused by exchange loss and the increase in net interest expenses.

This year’s Spring Festival, China’s most important holiday, during which most factory activities pause, fell on Feb. 16, and the following Lantern Festival fell on March 2. Some companies did not start working again until after that holiday. Therefore, their actual production and operation days are fewer compared with the same period of last year, dragging down the revenue growth.

Despite the slower profit increase, the companies’ profitability has improved, as the profit rate of their primary businesses rose to 6.18 percent, an increase of 0.11 percentage points over the same period of last year, according to He.

Meanwhile, the companies' leverage ratio continued to fall, and the asset-liability ratio stood at 56.4 percent by the end of March, a year-on-year decrease of 0.8 percentage points.

Manufacturing company profits took up a larger proportion - 83.9 percent of the total in the first quarter, up 0.3 percent from January to February.

Profits of emerging industries have maintained relatively rapid growth, with a profit increase of 10.7 percent in the first quarter.

Among the 41 industries surveyed, 25 posted year-on-year profit growth during the first quarter.

Combined mining industry profits rose 36.1 percent during the period and manufacturing expanded 8.2 percent, while those of power generation, heating, fuel gas and water supply companies rose 30.4 percent.

Industries such as textile, nonferrous metal smelting, automobile manufacturing, electrical machinery and equipment manufacturing, computer, communications and other electronic equipment manufacturing have all seen profits decrease at a different rate in the period.