State Grid Corp. of China, the behemoth that transmits and supplies nearly 90% of the country’s electricity, recorded an 81% year-on-year plunge in first-half profit, reported Caixin.
The power utility’s first-half net profit nosedived to RMB 5.66 billion ($811 million), although its revenue dipped just 4.7% year-on-year to RMB 1.2 trillion, according to company chair Mao Weiming.
Mao disclosed the first-half figures, which the company doesn’t make public, in an interim financial meeting on July 22, people familiar with the matter told Caixin. State Grid only reports annual figures. Of the 27 provincial power companies owned by State Grid, only eight made a profit during the period.
State Grid attributed the collapse in profit to fallout from the coronavirus outbreak and a government-ordered cut to electricity prices. In February, China’s National Development and Reform Commission, the country’s top economic planner, lowered electricity prices by 5% for all enterprises except the most power-hungry companies to cut them some financial slack. Mao said the price cuts cost the company RMB 45 billion in revenue in the first half of the year.