Beijing: The profit growth of China's state-owned enterprises has slowed in the first eight months of this year amid slackening of momentum in the economy, according to data released by the Ministry of Finance.
The combined profits of China's state-owned enterprises (SOEs) rose 8 per cent year on year to 1.64 trillion yuan (USD 267.4 billion) during the January-August period, slowing from the 9.2 per cent rise for the first seven months.
The rise in operating costs continued to outpace revenue growth, dimming the outlook for future profit growth, state- run Xinhua news agency reported.
Total business revenue for state firms increased 5.5 per cent from a year ago to 31.2 trillion yuan in the first eight months, while operating costs rose at a faster pace of 5.7 per cent to 30.08 trillion yuan.
Financing costs increased the most, up nearly 20 per cent from a year ago, signaling difficulties in raising money have gradually become a problem for industrial giants amid the economic downturn.
Zhang Xu, vice president of the northern branch of China Huaneng Group, said the financial burdens have become a majority of company operating costs after commercial loans were taken with high interest rates.
By the end of August, total assets of SOEs stood at 99.06 trillion yuan, while liabilities grew 12.3 per cent year on year to 64.69 trillion yuan.
Between January and August, steel and transport companies reported higher profits, but coal and chemical industries saw notable drops in profits.
The figures, which exclude financial firms, were collected from SOEs in 36 provincial-level regions and those administered by the central government.
China has thousands of SOEs, 113 of which are directly administered by the country's central authorities.
