Govt-Run Entities Reported a Huge Loss of Rs. 851 Billion in FY24

Loss-making State-Owned Enterprises (SOEs) recorded total losses of Rs. 851 billion in FY 2023-24, a 14.03 percent reduction year-on-year. According to the latest aggregate annual report on SOEs by the Ministry of Finance, after accounting for government subsidies of Rs. 782 billion and grants of Rs. 367 billion, the net aggregate losses stood at Rs. 521.5 billion. The National Highway Authority (NHA) led the losses with Rs. 295.5 billion, followed by Quetta Electric Supply Company (Rs. 120.4 billion), Peshawar Electric Supply Company (Rs. 88.7 billion), Pakistan International Airlines (Rs. 73.5 billion), and Pakistan Railways (Rs. 51.3 billion). Cumulative SOE losses have now reached Rs. 5,748 billion, with the most incurred in the last decade. Despite the losses, SOEs generated Rs. 13,524 billion in gross revenues, a 5.2 percent increase year-on-year, with total aggregate profits rising 14.61 percent to Rs. 820 billion. Asset value increased by 6.37 percent to Rs. 38,434 billion, while liabilities grew by 6.7 percent to Rs. 32,571 billion. Net equity improved to Rs. 5,863 billion, but high capital costs (WACC of 17-22 percent) kept Return on Equity negative at -0.5 percent and Return on Invested Capital at 3.4 percent. Oil and Gas Development Company (Rs. 208.9 billion), Pakistan Petroleum Limited (Rs. 115.4 billion), and National Power Parks (Rs. 76.8 billion) were among the top profit-making SOEs. However, despite these gains, financial inefficiencies persist, with negative Economic Value Added (EVA) of Rs. 2,500 billion and continued cash flow constraints. It is worth mentioning that SOEs contributed Rs. 372 billion in taxes, Non-tax revenues, which include sales taxes, royalties, and levies, amounted to Rs 1,400 billion. Dividends Rs. 82 billion and interest paid Rs. 206 billion. Aggregate contribution was Rs. 2,062 billion.