China SOEs' profits shrink despite increasing revenues

China's state-owned enterprises (SOEs) posted profit declines for the first 11 months of 2012 despite gains in their revenues, according to a report released Friday by the Ministry of Finance (MOF).

The profits of SOEs dropped 7 percent year on year to 1.94 trillion yuan (308.31 billion U.S. dollars) in the January-November period, marking their smallest year-on-year decline of 2012, the report said.

SOEs administered by the State-owned Assets Supervision and Administration Commission of the State Council saw their profits fall 2.7 percent year on year to 1.09 trillion yuan in the first 11 months, according to the report.

Meanwhile, the profits of SOEs under local governments tumbled 18.7 percent from the previous year to 576.67 billion yuan.

In contrast with the decreasing profits, the combined revenues of Chinese SOEs totaled 37.94 trillion yuan, up 10.9 percent year on year, the MOF said.

It added that their net profit margin on sales stood at 3.8 percent, down 0.8 percentage points from the previous year and unchanged on a month-on-month basis, while the rate of return on equity decreased 1.2 percentage points to 5.4 percent.

SOEs in electricity, tobacco, the auto sector, electronics and the light industry posted large profit gains, while those involved in chemicals, nonferrous metals, transportation, construction materials and machinery saw sharp declines.

The report covered SOEs that are centrally administered and ones supervised by local governments, but it did not look at SOEs in the financial sector.