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China’s listed companies post their worst interim results since 2009 as slower economy hurts

Companies publicly traded on mainland China’s two equity bourses have ended the first-half reporting season with their worst combined performance since 2009, in another sign that the slowest economic growth rate in decades is beginning to hurt.

The combined net profits of the 2,911 companies listed on the Shanghai and Shenzhen exchanges fell 4.1 per cent to 1.4 trillion yuan (HK$1.625 trillion) in the first six months, according to data compiled by Shanghai Wind Information Co. That’s the worst aggregate interim in seven years.

Oil companies suffered the worst losses, weighed down by slumping oil prices and a slower economy that cut industrial usage of the fuel. The energy sector saw its combined net profit tumble 63.2 per cent to 23 billion yuan during the first six months.

China Oilfield Services Co reported an interim loss of 8.4 billion yuan, while Sinopec Oilfield Service Co.’s first-half loss more than tripled to 4.44 billion yuan.

The financial services industry, comprising banks, brokerages and insurers, was also badly hit, with their combined profitability declining 7.9 per cent compared with the same period last year.

Shanghai was the better performer between China’s two stock exchanges.

Companies listed in Shenzhen saw their first-half profit down by 9.1 per cent, while Shanghai-listed companies posted a 6.6 per cent decline.

Chinese publicly traded companies performed worse during the second quarter, with their profits declining 6.8 per cent compared with last year, according to the data.

Total profits in the financial industry tumbled 11.3 per cent during the quarter compared with last year, leading the declines.

Commodities industries became more profitable during the recent quarter, helped by recovering prices, and a continuing government programme to shutter unproductive factories and production lines. Steel mills and coal mines improved their performances.

The Shanghai A-share Index, which tracks the performance of yuan-denominated shares traded in the city, fell 17.2 per cent during the first half, while the Shenzhen A-share Index declined 14.5 per cent in the same period.