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[BEIJING] Profits from China's state firms fell 14.2 per cent in the January to February period from a year earlier to 222.61 billion yuan (US$34.2 billion), the Ministry of Finance said on Friday, in a sign of worsening business conditions from a slowing economy.
Local state firms posted a 40.9 per cent plunge in earnings in the first two months from a year earlier, the ministry said. In contrast, firms owned by the central government saw their profits drop 8.2 per cent.
The sharp decline reflected slow business during the Lunar New Year holidays and weakness in the coal and steel sectors, where Chinese leaders have said 1.8 million workers would be laid off as efforts are made to reduce industrial overcapacity.
Excluding financial firms, revenues of state firms for the January to February period fell 5.8 per cent from a year earlier to 6.24 trillion yuan, the ministry said.
Steel, coal, petroleum and non-ferrous companies suffered losses, while the pharmaceuticals and machinery sectors saw profits rise, it said.
Total assets of state firms increased 15.6 per cent on year to 120.33 trillion yuan in the first two months, while total liabilities grew 17.9 per cent to 79.73 trillion yuan, it added.
In 2015, profits at China's state firms fell 6.7 per cent from the prior year, when they increased 3.4 per cent.