Pakistan govt entities post net loss of PKR 123B in FY25

Pakistan’s state-owned enterprises posted a net loss of PKR 122.9 billion in the fiscal year 2024–25 fiscal year, as deep structural problems continued to weigh on public finances, the Finance Ministry said on Friday.

The losses were outlined during a meeting of the Cabinet Committee on State-Owned Enterprises (SOEs), chaired by Finance Minister Muhammad Aurangzeb, which reviewed an annual consolidated performance report prepared by the ministry’s Central Monitoring Unit.

According to the report, aggregate revenues of commercial and non-commercial SOEs stood at about PKR 12.4 trillion in fiscal year 2025, down from the previous year, largely because of weaker profitability in the oil sector following lower global oil prices.

SOEs' profit fell 13% to PKR 709.9 billion, compared with PKR 820.7 billion a year earlier. Meanwhile, losses declined slightly by about 2% to PKR 832.8 billion. Even so, the sector’s overall financial position deteriorated, with the net loss widening sharply from PKR 30.6 billion in fiscal year 2024.

Officials said losses remain heavily concentrated in a small number of enterprises, particularly in transport and power distribution entities.

Entities such as the National Highway Authority and several electricity distribution companies continued to be major loss-makers because of structural inefficiencies, high depreciation and financing costs, and the public-service nature of operations that are not commercially viable.

The committee was told that SOEs have been classified into green, amber and red categories based on financial sustainability, a move aimed at prioritizing reforms and policy decisions.

Government support to SOEs increased to PKR 2.08 trillion during the year, driven mainly by higher equity injections to clear circular debt, while subsidies declined slightly. At the same time, inflows from SOEs to the government rose to PKR 2.12 trillion, supported by higher dividends, taxes and interest income.

The ministry's report also highlighted mounting liabilities.

Total SOE debt increased to PKR 9.57 trillion, while unfunded pension obligations were estimated at about PKR 2 trillion, a major legacy risk.

Off-balance-sheet guarantees and other contingencies stood at PKR 2.16 trillion.

Aurangzeb praised the Central Monitoring Unit for improving transparency and consolidating SOE data on an International Financial Reporting Standards basis, saying the work provides a stronger foundation for policy action.

He reaffirmed the government’s commitment to structural reforms, improved governance and accountability, and putting state-owned firms on a path toward financial sustainability.

Committee members stressed the need to enforce audit completion under the SOEs Act of 2023, finalize the transition to IFRS reporting by February 2026, and impose hard budget constraints on chronically loss-making entities.

The cabinet committee approved publication of the annual performance report and directed that its findings be shared with relevant ministries to guide reform measures. It also approved the appointment of independent directors to several power and energy-related SOEs as part of broader governance reforms.

Officials said the government has already begun implementing reforms, including shutting down the Utility Stores Corporation, privatizing First Women Bank, initiating the winding-up of Pakistan Agricultural Storage & Services Corporation Ltd (PASSCO), and selling a majority stake in Pakistan International Airlines, with more restructurings and privatizations in the pipeline.