SOE Net Losses Jump Over 300% Despite Generating Rs. 12 Trillion in Revenue

State-Owned Enterprises (SOEs) in Pakistan reported a significant increase in losses for FY2024-25, posting a net loss of Rs. 122.9 billion, a 301.66 percent rise compared to Rs. 30.6 billion in FY2024. This information was presented during a meeting of the Cabinet Committee on SOEs (CCoSOEs), chaired by Federal Minister for Finance and Revenue Muhammad Aurangzeb.

The Annual Consolidated Performance Report, prepared by the Central Monitoring Unit (CMU) of the Finance Division, provided a detailed assessment of both commercial and non-commercial SOEs. The report covered financial and non-financial performance, government support and fiscal flows, contributions to the national exchequer, debt profiles, corporate governance, business plan evaluations, and the proposed path forward under the SOEs Act, 2023.

During FY2024-25, aggregate revenues of SOEs were approximately Rs. 12.4 trillion, reflecting a decline largely due to reduced profitability in the oil sector amid lower international oil prices. Profits of profit-making SOEs fell by 13 percent to Rs. 709.9 billion, while aggregate losses of loss-making SOEs decreased slightly by 2 percent to Rs. 832.8 billion. Despite this improvement, the sector recorded an overall net loss of Rs. 122.9 billion.

Losses were concentrated in a small number of entities, particularly in transport and power distribution sectors. The National Highway Authority (NHA) and several power distribution companies were highlighted as major contributors, affected by structural inefficiencies, high depreciation, financing costs, and the public service nature of certain operations.

The report also categorized SOEs into green, amber, and red groups based on financial sustainability to prioritize reforms. Total government support to SOEs increased to Rs. 2,078 billion, mainly due to equity injections to address circular debt, while inflows from SOEs to the government rose to Rs. 2,119 billion, driven by dividends, tax receipts, and interest on government loans.

SOE debt at the portfolio level increased to Rs. 9.57 trillion, including development loans, foreign re-lent loans, bank borrowings, and accrued interest. Unfunded pension liabilities were estimated at around Rs. 2 trillion, with guarantees and other off-balance-sheet contingencies at Rs. 2.16 trillion, representing significant legacy risks.

The Cabinet Committee praised the CMU for consolidating financial data on an IFRS-aligned basis, improving transparency, and creating a digital database to support evidence-based decision-making. The Committee emphasized the importance of audit compliance, IFRS-based reporting by February 2026, realistic business plans, sector-specific engagement, loss-reduction strategies, and enforcing hard budget constraints for chronically loss-making entities.

The Committee approved the publication of the Annual Consolidated Performance Report to enhance accountability, transparency, and informed policymaking in the management of SOEs. It also approved the appointment of independent directors in several power and energy companies, including GEPCO, JPCL, EIDMC, ISMO, IESCO, and TESCO. Senior federal ministers and officials attended the meeting to review performance, governance, and reform measures across SOEs.