ISLAMABAD: Pakistan’s state-owned enterprises (SOEs) losses hit a staggering Rs832.848 billion during the fiscal year 2025, bringing accumulated losses to Rs6.563 trillion.
It was revealed in the Federal State-Owned Enterprises annual aggregate report on SOEs fiscal year 2025 (July 2024 to June 2025), released by the Central Monitoring Unit (CMU) of the Finance Division on Friday, which further noted Rs 3 billion per day equity erosion across loss makers.
The report noted that in 2025 (July 2024 to June 2025), 25 state-owned enterprises (SOEs) reported aggregate losses of Rs 832.8 billion. The National Highway Authority (NHA) incurred the highest loss at Rs 294.9 billion, followed by Quetta Electric Supply Company (Rs 112.7 billion), Peshawar Electric Supply Company (Rs 92.7 billion), Pakistan Railways (Rs 60.3 billion) and PIA Holding Company Limited (R 48.9 billion).
Other major loss-making entities included National Power Parks Management Company (Rs 46.1 billion), Neelum Jhelum Hydropower Company (Rs 29.4 billion), Pakistan Steel Mills (Rs 26.0 billion), and Sukkur Electric Power Company (Rs 25.3 billion). Further losses were reported by Pakistan Post Office (Rs 19.3 billion), Pakistan Agricultural Storage & Services Corporation (Rs 19 billion), Hyderabad Electric Supply Company (Rs 12.9 billion), Lahore Electric Supply Company (Rs 12.7 billion), and GENCO-II (Rs 10.3 billion).
Smaller losses were recorded by National Insurance Company (Rs 2.9 billion), CPPA-G (Rs 2 billion), Islamabad Electric Supply Company (Rs 1.4 billion), Pakistan Television Corporation (Rs 0.6 billion), Private Power & Infrastructure Board (Rs 0.47 billion), Pakistan Expo Centres (Rs 0.22 billion), Hazara Electric Supply Company (Rs 0.04 billion), National Construction Limited (Rs 0.03 billion), and Pakistan Broadcasting Corporation (Rs 0.03 billion.
READ MORE: SOE losses widen to Rs123bn in FY25 despite revenue of Rs12.4trn
The report noted that aggregate profits decreased by 13 percent, falling from Rs 820.7 billion in fiscal year 2024 to Rs 709.9 billion in fiscal year 2025. This downward adjustment was primarily attributed to reduced financial contributions from profit-making SOEs in Oil Sector, a consequence of declining international oil prices. On the loss side, there was a slight improvement, with cumulative losses across SOEs declining by 2 percent. Aggregate losses dropped from Rs 851.4 billion in the previous fiscal year to Rs 832.8 billion in fiscal year 2025. The net result of these changes in profits and losses was a total net adjusted loss of Rs 122.9 billion for 2025 from Rs 30.6 billion recorded in 2024.
In 2025, the balance sheet of SOEs presented a combination of positive and negative trends. Total equity increased by 7 percent, rising from Rs 5,865.2 billion in 2024 to Rs 6,245.7 billion in 2025. This growth was primarily driven by recapitalization efforts and significant equity injections, particularly in the power sector to clear circular debt stock. On the liabilities side, there was a moderate improvement, as total liabilities decreased by 3 percent. The figure declined from Rs 32,570.5 billion to Rs 31,742.4 billion over the course of the year. Total assets remained largely unchanged, exhibiting only a marginal decrease of 1 percent. The value of assets moved from Rs 38,435.7 billion to Rs 37,988.1 billion, indicating relative stability in the overall asset base of the SOE sector during 2025.
In 2025 (July 2024 to June 2025), profit-making SOEs posted an aggregate profit of Rs 709 billion, with earnings heavily concentrated among a small group of entities. The top contributors were Oil and Gas Development Company Limited at Rs 169.9 billion, followed by Pakistan Petroleum Limited (Rs 89.9 billion), National Bank of Pakistan (Rs 56.7 billion), Water and Power Development Authority (Rs 52.3 billion), and Government Holdings (Private) Limited (Rs 48.5 billion). Other major profit generators included Karachi Port Trust (Rs 35.3 billion), Port Qasim Authority (Rs 35.1 billion), Pak Arab Refinery Company (Rs 22.2 billion), Pakistan National Shipping Corporation (Rs 20.4 billion), State Life Insurance Corporation (Rs 14.8 billion), SNGPL (Rs 14.6 billion), Pakistan State Oil (Rs 14.2 billion), Gujranwala Electric Power Company (Rs 13.7 billion), Zarai Taraqiati Bank Limited (Rs 9.7 billion), Saindak Metals (Rs 8.4 billion), NTDC (Rs 7.6 billion), SSGPL (Rs 7.4 billion for nine months), and PIACL (Rs 6.8 billion for six months). Overall, a handful of prominent SOEs account for nearly 90 percent of total profits, underscoring a high degree of earnings concentration within the portfolio. These entities effectively form the profitability backbone of the SOE sector, generating the surplus that partially offsets persistent losses across the remaining SOEs— and, in classic portfolio terms, carrying far more weight than their headcount would suggest, the report noted.
In fiscal year 2025, government fiscal support to SOEs saw an increase, rising to Rs 2,078.5 billion. This represents a 37 percent growth compared to the previous year’s support of Rs 1,512.9 billion.
The expansion of fiscal support was driven by significant changes across various components.
Equity Injections: The most notable increase was observed in equity injections, which amounted to Rs 728.9 billion in fiscal year 2025. These are related to one off power sector circular debt clearing, payment to IPPS which are reflected in the form of equity injections aimed at strengthening the financial positions of key SOEs.
Loans to SOEs: Government loans provided to SOEs also grew, climbing by 34 percent from Rs 263.3 billion to Rs 354.1 billion. This underscores the government’s ongoing commitment to providing direct financial resources to support SOE operations and restructuring.
Grants and Subsidies: In contrast to the increases in guarantees, loans, and equity, both grants and subsidies experienced declines. Grants fell by 27 percent to Rs 269.2 billion, while subsidies dropped by 7 percent, reaching RS 726.3 billion. These reductions may reflect shifting government priorities or improved operational efficiencies in certain areas.
Sovereign Guarantees: These increased markedly, from Rs 1,419.0 billion in FY2024 to Rs 2,164.0 billion in FY2025, reflecting a 52 percent rise. This change is not due to addition of new guarantees, rather accounting for self-liquidating guarantees on stock.
In FY2025, the federal government collected RS 12,970 billion in tax revenue, of which approximately Rs 2,078 billion (about 16 percent) was channelled back to SOEs through subsidies, equity injections, grants, and loans. In practical terms, every Rs 6 collected in taxes results in Rs 1 being absorbed by SOEs.
SOEs made a significant financial contribution to the federal government, totalling Rs 2,119.2 billion. This amount represents a 7.5 percent increase compared to the previous year’s figure of Rs 1,971.2 billion, underlining the expanding fiscal role of SOEs in national revenue generation.
Dividends paid by SOEs experienced substantial growth, from Rs 82.8 billion in the prior year to Rs 149.6 billion in FY2025. This 81 percent increase reflects both improved profitability among leading commercial SOEs and enhanced adherence to dividend payout policies.
Tax revenues collected from SOEs saw a notable rise of 17 percent, reaching Rs 436.9 billion. This upward trend signifies a positive shift in tax contributions and the fiscal impact of SOEs on government finances.
Non-tax revenues, which encompass royalties, levies, development surcharges, and other statutory charges, registered a decline of 10 percent. The total decreased from Rs 1,400.5 billion in the previous year to Rs 1,264.9 billion in FY2025. The reduction highlights the inherent volatility of commodity-linked revenue streams— particularly those associated with oil and gas—and the impact of tariff adjustments on overall collections.
Interest payments on government loans to SOEs rose sharply, jumping from Rs 115.0 billion to Rs 267.8 billion, which represents a 133 percent increase. This surge indicates a growing reliance on loan rollovers rather than cash settlements for servicing outstanding obligations, pointing to changes in SOE debt management practices and financial sustainability.
The Net Fiscal Flow, calculated as the difference between State-Owned Enterprises’ (SOEs) contributions to the government— including taxes, dividends, levies, royalties, and interest payments— and the fiscal support received in the form of equity injections, grants, subsidies, loans, and guarantees, experienced a dramatic decrease. Specifically, the Net Fiscal Flow dropped from Rs 458.2 billion in the previous fiscal year to just Rs 40.7 billion in FY2025. This sharp reduction highlights a substantial decline in the net cash returns provided by SOEs to the government.
Total debt at the portfolio level rose by 4percent, increasing from Rs 9,195.7 billion to Rs 9,571.1 billion. This growth reflects a clear re-profiling of the funding architecture among State Owned Enterprises (SOEs).
Cash Development Loans saw a significant expansion, up 21 percent from Rs 1,767.8 billion to Rs 2,146.2 billion. Similarly, Foreign Re-Lent exposure increased by 24 percent, moving from Rs 1,747 billion to Rs 2,159.1 billion. These changes confirm a shift toward sovereign-intermediate financing, in which the federal government assumes the credit risk and SOEs act as pass-through borrowers.
Bank borrowing remained nearly unchanged, declining marginally from Rs 2,813.5 billion to Rs 2,804.3 billion. This stability suggests an environment of credit saturation and a sector-wide tightening of exposure limits. Contributing factors include elevated leverage, deterioration in debt service coverage capacity, and higher expected loss under Basel III provisioning rules. Other debt composed of leases and right-of-use liabilities experienced a sharp contraction, dropping by 48percvent from Rs 533.4 billion to Rs 277.2 billion. This reduction is attributable to both delivery efforts and the reassessment of lease liabilities. Accrued interest is sitting at Rs 2,184.5 billion from Rs 2,334.0 billion previously showing slight reduction.
Unfunded pensions stand at Rs 2,030 billion excluding the pensions of Pakistan Railways which is reporting pensions on cash basis annually and not on aggregate pension unfunded obligations.
Circular debt levels moderated during the period, with a notable reduction in the power sector from Rs 2,440.4 billion to Rs 1,889.9 billion, largely reflecting fiscal support measures such as equity recapitalizations (equity injections) and balance-sheet adjustments (on books of DISCOS) of accumulated payables. In contrast, gas-sector circular debt remained broadly stable at around Rs 2.0 trillion, pointing to continuing structural challenges. On an aggregate IFRS full-accrual basis, circular debt declined from Rs 4,517 billion to Rs 3,929 billion.
Copyright Business Recorder, 2026