China says industrial profits down 37 percent

Profits at China’s oil producers, steel makers and other major industrial companies fell sharply in January and February as sales were battered by the global economic crisis, data showed Friday.

The data highlighted the impact of China’s downturn on even its biggest companies despite a multibillion-dollar government stimulus plan.
Hardest-hit were producers of aluminum and other nonferrous metals, which suffered a net loss of 1.9 billion yuan ($277 million), the National Bureau of Statistics said. It said the iron and steel industry suffered a net loss of 770 million yuan ($112 million), though the biggest producers have said they were still profitable.

China’s overall economic growth slowed to 6.8 percent in the fourth quarter from 2007’s stunning 13 percent rate as exports plunged and domestic sales of real estate, autos and other goods weakened. Independent economists expect growth as low as 5 percent this year, which would be the fastest for any major economy but would hurt companies that rely on rapid growth in exports and investment.

Oil and power companies have been squeezed by government controls that at times bar them from passing on higher costs for crude and coal.

The country’s biggest oil producer, PetroChina Ltd., said this week its 2008 profit fell 22 percent compared with 2007, though it still reported annual earnings of 114.4 billion yuan ($16.7 billion).

AP