Sat, December 20, 2008

Higher energy prices trim Chinese state firms' profits

2008-12-20 07:48:29 GMT2008-12-20 15:48:29 (Beijing Time)  Xinhua English

BEIJING, Dec. 20 (Xinhua) -- Profits in China's state-owned enterprises (SOEs) administered by the central government would drop 20 percent from a year earlier because of higher energy prices, said an official with the State-owned Assets Supervision and Administration Commission (SASAC).

The central SOEs would earn a total of 800 billion yuan (117 billion U.S. dollars) this year, compared with 1 trillion yuan in 2007, said Wang Xiaoqi, head of the planning and development bureau with the SASAC on Friday.

According to Wang, most of the loss came from the petroleum and electricity industries, which suffered under the government-capped pricing system.

The country's five largest power generators, including China Huaneng Group, China Datang Corp. and China Guodian Corp., may post a combined loss of 55 billion yuan this year because of the gap between the steep coal prices and the state-set electricity prices, he said.

The global financial crisis has also eroded earnings in the SOEs, Wang said.

The central SOEs reported a sharp profit decline of 26 percent in the first 11 months this year, according to the SASAC statistics. Combined profits stood at 683 billion yuan from January to November.

There are now 143 central SOEs running under the supervision of the SASAC.

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