THE impact of August’s yuan devaluation has shown up in Chinese publicly traded companies’ annual results — and investors are bracing for more pain.

    Some 980 listed Chinese companies reported combined foreign exchange losses of 48.7 billion yuan (US$7.5 billion) for last year, almost 13 times the amount in 2014. Profits at those firms slumped 11 percent last year to 789.2 billion yuan.

    State-owned oil refiner China Petroleum & Chemical Corp., or Sinopec, reported 3.9 billion yuan in net foreign exchange losses, increasing from 179 million yuan in 2014.

    The yuan’s 4.5 percent tumble last year, the largest since 1994, swelled financing costs for Chinese companies, the biggest U.S. dollar borrowers in Asia. More depreciation in January triggered a global stock rout and contributed to a 31 percent first-quarter drop in Chinese dollar bond sales. While the yuan has rallied against the U.S. dollar for two months, it is still weakening against a basket of currencies.

    “Continued yuan depreciation will definitely impact Chinese companies’ bottom line,” said Raymond Chia, the Singapore-based head of credit research for Asia excluding Japan at Schroder Investment Management Ltd.

    “In some cases, the impact is severe. Although one can argue foreign exchange impact is non-cash, it does impact the company’s credit ratios and debt servicing ability,” Chia said.

    The airline sector was hurt most with a combined foreign exchange loss of 17.9 billion yuan for 2015, compared with 951.7 million yuan a year earlier. The big three State-owned airlines — China Southern Airlines Co., China Eastern Airlines Corp., Air China Ltd. — suffered the equivalent of US$2.5 billion in foreign losses.

    China’s real estate companies, Asia’s biggest dollar high-yield borrowers, were the second most-hit with combined foreign exchange losses of 11.9 billion yuan, up from 1.4 billion yuan in 2014. (SD-Agencies)