SOE losses widen to Rs123bn in FY25 despite revenue of Rs12.4trn
- Aggregate revenues of SOEs stood at approximately Rs12.4 trillion during FY25
Losses of state-owned enterprises (SOEs) widened sharply in FY2024-25 despite generating revenues of around Rs12.4 trillion, as structural inefficiencies, rising debt and persistent losses in key sectors continued to weigh on the portfolio, the Finance Division said in a statement on Friday.
The issue came under review on Friday as the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, met at the Finance Division to examine the annual performance of commercial and non-commercial SOEs.
The committee was presented the Annual Consolidated Performance Report for FY25 prepared by the Central Monitoring Unit (CMU) of the Finance Division, offering a comprehensive assessment of financial and non-financial performance, fiscal flows, governance, debt and reform priorities under the SOEs Act, 2023.
According to the report, aggregate revenues of SOEs stood at approximately Rs12.4 trillion during FY25, reflecting a decline mainly due to lower profitability in the oil sector amid reduced international oil prices.
READ MORE: SOEs post 14pc decrease in losses YoY
Aggregate profits of profit-making SOEs fell 13% year-on-year to Rs709.9 billion from Rs820.7 billion in the previous year.
While losses of loss-making SOEs showed a modest improvement, declining by around 2% to Rs832.8 billion, the overall SOE portfolio recorded a net loss of Rs122.9 billion, compared with a net loss of Rs30.6 billion last year.
The committee was informed that losses remain heavily concentrated in a small number of entities, particularly in the transport and power distribution sectors.
The National Highway Authority and several power distribution companies continued to be major contributors, driven by structural inefficiencies, high depreciation and financing costs, and the public service nature of certain operations.
READ MORE: Privatising loss-making SOEs top priority: PM
SOEs were categorised into green, amber and red segments based on financial sustainability, a classification aimed at prioritising reform actions and policy decisions.
On fiscal support, total government assistance to SOEs increased to Rs2,078 billion during FY25, largely due to higher equity injections to clear circular debt, while subsidies declined modestly.
Inflows from SOEs to the government rose to Rs2,119 billion, supported by higher dividends, tax receipts and interest income.
The committee also reviewed the debt profile of SOEs, which increased to Rs9.57 trillion, comprising domestic and foreign loans, bank borrowings and accrued interest.
Unfunded pension liabilities across SOEs were estimated at around Rs2 trillion, identified as a major legacy risk. Off-balance-sheet guarantees and other contingencies stood at Rs2.16 trillion.
Commending the CMU, the finance minister highlighted improvements in transparency, IFRS-aligned reporting and the development of a comprehensive digital database for evidence-based oversight.
He said these advances provided a credible foundation for informed policy action and sustained reforms.
Committee members stressed the need for strict enforcement of audit completion in line with the SOEs Act, 2023, timely transition to IFRS-based reporting by February 2026, and adoption of realistic business plans, loss-reduction strategies and hard budget constraints for chronically loss-making entities.
The committee approved the publication of the Annual Consolidated Performance Report and directed that its findings be shared with relevant ministries to guide reform measures.
It also approved the appointment of independent directors in Gujranwala Electric Power Company, Jamshoro Power Generation Company Limited, Energy Infrastructure Development and Management Company, Independent System and Market Operator, Islamabad Electric Supply Company and Tribal Areas Electric Supply Company.
The meeting was attended by federal ministers for power, science and technology, planning, commerce and maritime affairs, along with senior officials from relevant ministries and regulatory bodies.
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