SCIO briefing on the performance of centrally administered SOEs in Q1

The State Council Information Office held a press conference in Beijing on Monday to brief the media on the performance of state-owned enterprises managed by the central government in the first quarter of 2020. April 22, 2020

Peng Huagang:

Compared with the first quarter of last year, the total operating revenue of centrally administered SOEs fell by 11.8% to 6 trillion yuan this time round, and more than 80% of those enterprises saw their revenues decline. The total net profit reached 130.4 billion yuan, down 58.8% year-on-year. 57 centrally administered SOEs saw a decrease in their net profits, and 26 made losses. In terms of monthly data, although the total net profit in March showed a sharp recovery from that in February, they were much lower compared with the same period last year. 

As the virus is raging across the world, the domestic and global demand for commodities, such as crude oil, has shrunk, forcing sharp falls in oil prices. Some centrally administered SOEs in the energy industry implemented national policies by lowering prices to benefit customers. Under the combined influence of market developments and relevant policies, centrally administered SOEs in petroleum and petrochemicals, aviation, automobile, and electrical grid sectors saw a massive drop in both revenues and profits.

On the whole, most centrally administered SOEs have encountered unprecedented difficulties in their production and business operations and come under intense pressure to increase profits. However, all enterprises are taking various measures to overcome difficulties and recoup their losses, thus maintaining a stable overall performance.

First, centrally administered SOEs are accelerating the resumption of work and production, with business operations back on track. Enterprises in petroleum and petrochemicals, power and grid, steel, machinery manufacturing, and air transportation sectors didn't suspend production during the Spring Festival and the outbreak. Instead, they made an all-out effort to stabilize operation. By the end of February, more than 90% of centrally administered SOEs had resumed production, and now the figure has reached 99.4%. Despite difficulties, centrally administered SOEs in construction, automobile, tourism, and other sectors hit hard by the outbreak returned to work earlier than other enterprises in the same sector. Centrally administered SOEs responsible for crucial projects did their utmost to ensure the progress of key projects.

Second, most centrally administered SOEs reported better profitability. With the work of COVID-19 prevention and control being conducted steadily and positively across China, the operating revenues of centrally administered SOEs reached 2.2 trillion yuan, returning to the same level as January. A total of 11 central SOEs saw year-on-year growth in the first quarter. In March, the profitability of 43 central SOEs returned to the average growth level in 2019, while 37 central SOEs saw the rate of profit decline by more than 10 percentage points from the first two months of 2020.

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