Crisis finds state enterprise earnings declining 43.7pc in first two months

State-owned enterprises saw their total profits slump 43.7 per cent in the first two months from the same period last year to a combined 121.7 billion yuan (HK$138.11 billion) as the financial crisis deepened, the Ministry of Finance said.

The decline was bigger than the 0.4 per cent drop in the first two months of last year and a 25.2 per cent decrease for the whole year, according to the ministry.

Revenue at state-owned companies totalled 2.7 trillion yuan in January and February, down 8.1 per cent, the first decline in 'many years', it said. 'The impact of the global financial crisis on the nation's companies is deepening.'

State companies under the central government recorded a 33.3 per cent decline in net profits to 106 billion yuan in the two-month period, while earnings at those under provincial governments slumped 72.5 per cent to 15.8 billion yuan.

The electricity, transport, steel and non-ferrous industries recorded a net loss on shrinking demand. Profit at the oil and vehicle industries largely declined, while coal was the only industry to record profit growth, although the pace abated, the ministry said.

Over the past two months, the central government has announced stimulus packages for 10 strategic industries, including textiles, vehicles, shipbuilding, electronics and information technology, light industry, petrochemical, heavy machinery, non-ferrous metals and steel, and logistics.

The packages came after a 4 trillion yuan investment expansion plan to boost the economy announced in November.