Major state-owned enterprises (SOEs) reported a sharp slowdown in profit growth in the first half of the year on the back of a high comparative basis and the soaring prices of raw materials.

The enterprises raked in combined profits of 298.81 billion yuan (36.84 billion US dollars), up 29.1 percent year on year. This was much lower than the 40 percent surge seen in the previous two consecutive years, Minister Li Rongrong in charge of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council told a meeting here Friday.

He said 106 SOEs saw a slower growth of profits and that 67 others saw decline in the profit growth. The number of enterprisessuffering losses was 26.

The SASAC supervises the operation of about 200 big companies controlled by the central government in strategic sectors such as oil and steel.

Li said the profit downsliding of the companies was "partly reasonable" because of previous skyrocketing growth and price hikes of raw materials.

"It, however, also spotlighted such protruding problems in financial management of the SOEs as the excessively fast growth of production costs, accounts receivable and fund provisions for stockpiles," he acknowledged.

The minister also blamed the profit decrease for huge losses from investment in risk-intensive fields including futures, derivatives, stock markets and entrusted financing.

Source: Xinhua