Costs hit industry profit growth

By Wang Yanlin  |   2008-6-28  |     NEWSPAPER EDITION

PROFITS for the Chinese mainland's industrial companies rose 20.9 percent to 1.09 trillion yuan (US$158.8 billion) by May, the National Bureau of Statistics said yesterday.

The growth was much slower compared with the 42.1-percent climb achieved in the first five months last year because of the higher costs of energy and raw materials, analysts said.

"Upstream companies in energy and raw material industries have seen their growth pick up. But on the whole, most companies are suffering from higher costs and are reporting a slowdown in their profit growth, with some even posting losses," said Li Maoyu, an analyst with Changjiang Securities Co.

In the first five months, companies involved in petroleum and natural gas exploration reported that their profits had expanded 54.3 percent while coal companies soared 97.8 percent.

In comparison, the profits of power producers dropped 74 percent while oil refiners reported a net loss of 44.3 billion yuan.

China's Producer Price Index jumped 8.2 percent last month to reach a record high for more than three years.

Sales of industrial companies rose as much as 29.3 percent to 18.4 trillion yuan in the first five months.