Profits of China's SOEs fall in first 3 quarters amid slowing economy

Profits of China's state-owned enterprises (SOEs), excluding financial institutions, dropped in the first three quarters amid the economic slowdown, according to the latest data released by the Ministry of Finance.

SOE profits in the first nine months were 1.11 trillion yuan (162.63 billion U.S. dollars), down 2.9 percent year on year. The January-August profits were 1.3 percent less from a year ago, the ministry has said in a report.

Sales revenue of the enterprises rose 25 percent to 16.03 trillion yuan for the year ending September, down 1.1 percentage points from the figure for the first eight months.

Profits of the central SOEs fell 9 percent to 780.22 billion yuan through September after a 7.7 percent decline in the first eight months from a year earlier.

Weak demand and rising cost of raw material squeezed the profits of the enterprises and forced many to cut production as, China's economy slowed to 9 percent in the third quarter this year, the first single-digit expansion since 2002.

Power sector suffered the most as the fine-tuned electricity prices could hardly make up for the soaring coal costs. Losses of the country's top five power companies totaled 21.4 billion yuan in the first nine months, a rise of 4.64 billion yuan from January-August.

The nation's top two power grids saw their profits tumble 80.9 percent from a year ago to 8.47 billion yuan, 1.7 percentage points higher than that for the first eight months.

The report said the oil producing and petrochemical industry's losses were narrowed as the crude prices dropped a lot of from the record high of 147 U.S. dollars per barrel in July, which narrowed the losses in the third quarter.

The petrochemical sector saw profits plunge 81.1 percent year on year to 13.65 billion yuan in the first three quarters, but were 13 percentage points lower than that for the first eight months.

Profits of the oil producing sector fell 6.9 percent to 171.29 billion yuan, 1.3 percentage points lower than that for January-August.