(Yicai Global) April 20 -- Profits atChina's state-owned enterprises,which include China National Petroleum, China Petrochemical, State Grid, China Mobile, and Dongfeng Motor,plunged an average58.5 percent in the first quarter from a year earlier because of the economic disruption caused by the coronavirus lockdown.

Total net profit at the 97 companies directly controlled bythe State-owned Assets Supervision and Administration Commission was CNY130.4 billion (USD18.4 billion) in the three months ended March, it said today. Operating revenue fell 11.8 percent to CNY6 trillion (USD847.9 billion), with more than 80 percent of the SOEs suffering a decline, SASAC General-Secretary Peng Huagang said at a press conference today.

Some 57 SOEs reported a decline in net profit from the same period last year, and 26 logged a net operating loss, Peng said. The SASAC will strengthen the governance of loss-making enterprises, particularly those listed on the stock market, he added.

The Covid-19 global pandemic led to a sharp drop in both domestic and overseas demand while commodity prices, including crude oil, fell sharply, Peng noted. Some energy SOEs also have cut prices based on national policies, so firms in the petroleum, petrochemical, aviation, automobile and power grid sectors have seen a steep decline in revenue because of market and policy factors.

With China’s economic recovery underway last month, SOEs reported CNY2.2 trillion in monthly operating revenue, returning to January levels, and 11 firms booked a higher profit in the first quarter than in previous.

Central enterprises must stabilize their operations and industrial chains and prevent major risks while taking proper Covid-19 control measures and try their best not to go bankrupt or substantially reduce wages and headcounts, except for zombie enterprise disposals, Peng said.

The SASAC will bolster governance of loss-making listed companies when disposing of zombie firms to eliminate the source of losses, he added.

Editor: Peter Thomas