China's industrial profits fall in Q1 under virus strain

Beijing: Profits of China's major industrial firms dropped in the first quarter (Q1) of 2020 with signs of improvement in March amid efforts to coordinate COVID-19 containment and economic growth, data from the National Bureau of Statistics (NBS) showed.
Profits of industrial companies with annual revenue of more than 20 million yuan (about $2.83 million) totalled 781.45 billion yuan in Q1, down 36.7 per cent year on year, NBS said in a statement.
The contraction narrowed from the 38.3-per cent decline in the first two months, NBS data showed.
In breakdown, profits of the manufacturing and mining industries went down 38.9 per cent and 27.5 per cent, respectively, while that of the production and supply of electricity, thermal power, gas and water reported a year-on-year decrease of 28.6 per cent.
Industrial profits warmed in March as stepped-up work and production resumption nationwide drove up sales for industrial products, said NBS official Zhang Weihua, pointing to bright spots in the readings.
While profits in 39 of the 41 industrial sectors surveyed fell in Q1 from the same period last year, 28 sectors saw their profit growth improve or pullback soften in March, according to the NBS.
Electronic product manufacturers, along with beverages and tea makers, reversed January-February profit slumps to expand 19.5 per cent and 7.5 per cent, respectively.
Industrial firms in the hi-tech manufacturing sector achieved profit rebound with a 0.5-per cent growth in March after the 37.1-per cent fall in the first two months.
Companies in the daily necessities sector registered significant profit improvement in March, said Zhang, noting that profits of the non-staple food processing sector grew 28.7 per cent in March, up from 2.2 per cent in the first two months.
Profits of private and small industrial firms, as well as that of overseas-funded companies, also narrowed their profit slump in March from the January-February period, according to the NBS.
Despite improvement last month, the profit decline in Q1 remained relatively steep due to factors including mounting stockpile, falling factory-gate prices, rising costs as well as market demand, which has yet to fully recover from COVID-19 impact, said Zhang.
Revenue of the major industrial firms amounted to 19.86 trillion yuan in Q1, down 15.1 per cent year on year, and their business costs skidded 14.6 per cent to 16.83 trillion yuan during the period.