Posted on 04/27/2020 2:40:15 PM PDT by fluorescence
Profits at China’s big industrial firms collapsed in the first quarter of the year, during the country’s unprecedented coronavirus lockdown.
Industrial firms saw profits fell by 36.7 per cent over the first three months, led by a massive 187.9 per cent collapse in the profitability of firms in the oil and gas industries. These firms saw a 28.5 billion yuan (US$4 billion) profit over the same period of 2019 fall to a 24.7 billion yuan loss.
Big companies in metal products, machinery and equipment sectors saw profits fall by 84.3 per cent. The automotive industry saw a 80.2 per cent profit drop, profits in the chemicals sector were down 56.5 per cent, while ferrous metal processing profits slid by 55.7 per cent over the first quarter.
Among China's 41 industrial sectors, all but two reported losses: tobacco and food processing.
Profits at state-owned industrial enterprises plummeted by 45.5 per cent, while those in the private-sector fell by 29.5 per cent. In March, industrial profits fell by 34.9 per cent, a slight improvement on the record plunge of 38.3 per cent in combined figures for January and February. But the sluggish month shows the challenge in reopening the economy, which is now being hit by demand-side shocks after the supply shock of the first two months.
[snip]"although the profit situation of industrial enterprises has improved in March, due to the fact that market demand has not yet fully recovered, product inventories have increased, industrial products prices have continued to fall, and cost pressures are still large,” said China's National Bureau of Statistics said in a statement accompanying the data. “We must carefully implement various policies and measures to promote economic and social development, and actively help enterprises alleviate difficulties and stabilise and promote the stable operation of the industrial economy.”
(Excerpt) Read more at scmp.com ...
Just you wait and see when the American People stop buying their crap and buy American
Without reading the article, if you made $200 profit on something and now only have a $12.10 profit. Hopefully they are going negative though. IIRC, oil and gas in the USA in a good year have profits around 20% to 30%.
“...a 28.5 billion yuan (US$4 billion) profit over the same period of 2019 fall to a 24.7 billion yuan loss.”
Whew. If we were letting China make 200% profit on their oil and gas while putting so much added cost on our own in the form of over zealous regulations, that would be nuts.
I'm supposing a 187.9% collapse would mean that not only are you making no profit, but you are actually paying people bigtime to haul your product away.
But I don't know.
If you previosly had a $100 profit but now have an $87.90 loss, your change in profitability (from a profit to a loss) has been -$187.90 / $100 prior profit = -187.9% net change.
Do the math and it's more like 86.6% loss. I don't get it either. What are we missing with the 187.9% collapse in profitability of the same firms? My percentage of net loss and the 187.9% of the same firms over a year don't equate. I can read a P&L statement and know the difference between gross income and net profits which they refer to. I've owned 3 small companies.
More China lies? Or are they confusing gross income with net profits after operating expenses? Make no sense to me the way it reads.
“Wouldn’t a 100% collapse on a previous profit of $200 be -0-, which is to say, zero profit?”
Duh - I’m such an idiot! You are right.
I don’t know if they had to pay someone to haul their oil away, but they did lose money. They still had to drill, refine it, pay the workers, etc.
However, there are a lot of oil tankers off the coast of California. I doubt they will just dump their oil into the ocean. Although it is also costing them money sitting offshore waiting to take it. (Hmm - I suppose they ship over “raw” oil and we refine it?).
I can almost see the Chinese dumping their oil off the coast of California though.
There’s nothing wrong with the math. The calculation is simply the change in profit divided by the previous profit: (-24.7 - 28.5) / 28.5 [ * 100%]
It has nothing to do with the profit margin or anything else.
I see no mention of dollar/yuan amounts in the excerpt. It speaks to percentages of profit and loss for the same firms. If it's further in the article, then my math could be wrong.
Good. We need to starve the CCP to death.
Then piss on the corpse.
L
My calculator must be made in china, because it reads current profit 24.7% divided by previous 28.5 = 86.6.% difference and not the 187% they say in the excerpt.
I must be doing the math wrong, which wouldn't surprise me at my age.
I thought Communism (unlike Capitalism) was not indended to produce a profit.
Yup, I did the math wrong. I was comparing profit to profit rather than subtracting previous profit to 0 and then adding in the current loss. My bad. I’ll stay off of statistical threads since I no longer have the smarts.
Reporters don’t understand basic math. But I’m guessing going from 28 billion profit to 24 billion LOSS, could be stated as a percentage over 100?
For a while, oil went negative...they went from profit to owing money to store something that was less than worthless...which would result in over 100% drop in profits...that’s the only analogy that makes sense to me but I may be way off base...
You missed the minus sign. Current profit is negative (ie, loss).
If your bank balance went from $28.50 to being 24.70 overdrawn, how much money went out?
Yes, I admitted in my post #15 that I did the math wrong.
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