Profit of Mining Industry in the First Quarter Dropped by 61% on Y-o-Y Basis



Profit of Mining Industry in the First Quarter Dropped by 61% on Y-o-Y Basis

According to data published by the National Bureau of Statistics, from January to March, nationwide industrial enterprises above designated size fulfilled total profit of 1254.32 billion yuan, down by 2.7% on Y-o-Y basis, the decline margin narrowed by 1.5 percentage points than the period from January to February. Wherein, from January to March, income from main business of the mining industry was 1230.34 billion yuan, down by 14.5% on Y-o-Y basis; total profit fulfilled was 65.55 billion yuan, down by 61% on Y-o-Y basis.

From January to March, in 41 big category industries, 30 industries recorded Y-o-Y growth in total profit, 1 industry maintained stable, 8 industries experienced decline in growth, 2 industries turned from profit-earning to loss on Y-o-Y basis. Wherein, non metal mineral product industry grew by 0.1%, black metal smelting and rolling processing industry grew by 2.2%, nonferrous metal smelting and rolling processing industry grew by 28.3%, power, thermal production and supply industry grew by 16.4%, coal mining and washing & dressing industry dropped by 61.9%, oil and natural gas mining industry dropped by 71.7%, petroleum processing, coking and nuclear fuel processing industry turned from profit earning in the same period of the last year to loss.

When interpreting January ~ March profit data of industrial enterprise, Dr. He Ping of the National Bureau of Statistics said industrial profit in March presented two features, firstly, profit decline margin narrowed slightly; secondly, profit ratio improved to certain degree.

He Ping said, the reason that in March industrial profit decline margin narrowed is that: Decline margin of raw material price increased, investment proceeds turned from decrease to increase, financial expense turned from increase to decrease, industries such as petroleum processing recorded obvious improvement in profit earning. Suffering from impact of delayed effect from crude oil price fluctuation and gradual digestion of high cost crude oil inventory, in March, profit of petroleum processing coking and nuclear fuel processing industry increased by 10.75 billion yuan on Y-o-Y basis, whereas that of January~ February declined by 28.55 billion yuan on Y-o-Y basis, profit earning in March improved significantly than January~ February period, which raised profit increase of all industrial enterprises above designated size by 5.8 percentage points. Furthermore, oil and natural gas mining industry, coal mining and washing & dressing industry also showed improvement in industrial profit-earning condition than that of January~ February period.

According to He Ping, although profit decline margin in March narrowed slightly, industrial enterprises are still facing grim production and operation situation. Owing to weak demand, growth of industrial production slowed down, product prices continued to drop, growth of income from main business plunged evidently, which restrained enterprise profit growth. Meanwhile, sluggish sales resulted in mounting pressure in enterprise inventory, account receivable remained high. At the end of March, industrial enterprises’ stock of finished products increased by 7.7% on Y-o-Y basis, the growth speed is 5.7 percentage points higher than that of accrued income from main business; turnover days of finished product stock is 15.6 days, up by 0.8 days on Y-o-Y basis. Enterprises’ account receivable increased by 9.3% on Y-o-Y basis, the growth speed is 7.3 percentage points higher than that of accrued income from main business; average collection period of account receivable is 37.5 days, up by 2.8 on Y-o-Y basis. Inventory pressure and capital turnover difficulty all the more further restrained improvement of enterprise efficiency.