Pakistan’s state-owned enterprises (SOEs) reported a net loss of Rs122.9 billion in FY2024-25, significantly higher than the Rs30.6 billion loss recorded in the previous fiscal year, according to the Annual Consolidated Performance Report approved by the Cabinet Committee on State-Owned Enterprises. Despite slight improvements in some loss-making entities, the overall net result for the SOE portfolio widened sharply due to structural inefficiencies and weaker profitability in key sectors.
The Cabinet Committee, chaired by Finance Minister Senator Muhammad Aurangzeb, reviewed the report prepared by the Central Monitoring Unit of the Finance Division, which provides a portfolio-wide assessment of financial and operational performance, governance, debt exposure, and reform priorities. The report highlighted aggregate revenues of SOEs at approximately Rs12.4 trillion, declining mainly due to lower oil sector earnings amid subdued global oil prices.
Profits of profit-making SOEs fell 13% year-on-year to Rs709.9 billion, while aggregate losses of loss-making entities marginally declined by around 2% to Rs832.8 billion. The combined effect resulted in a significantly higher net loss for the overall portfolio. Losses remained concentrated in a small number of entities, particularly in the transport and power distribution sectors. The National Highway Authority and several power distribution companies accounted for a substantial share of losses due to structural inefficiencies, high depreciation and financing costs, and non-commercial public service obligations.
SOEs were classified into green, amber, and red categories based on financial sustainability to help prioritise reforms. Fiscal support to SOEs increased to Rs2.08 trillion, largely through higher equity injections aimed at clearing circular debt, while subsidies declined slightly. Meanwhile, inflows from SOEs to the government rose to Rs2.12 trillion, supported by higher dividends, tax payments, and interest income, partially offsetting the fiscal burden.
The report also revealed total SOE debt rising to Rs9.57 trillion, comprising domestic and foreign loans, bank borrowings, and accrued interest. Unfunded pension liabilities were estimated at around Rs2 trillion, highlighting significant long-term fiscal risks. Guarantees and other off-balance-sheet obligations stood at Rs2.16 trillion.
Committee members stressed the urgent need for stricter enforcement of audit completion, timely transition to IFRS-based financial reporting by February 2026, and more realistic business plans for chronically loss-making entities. The committee directed that these findings be shared with relevant ministries and that progress on audits, governance reforms, debt rationalisation, and fiscal risk containment be reviewed regularly.
As part of broader governance reforms, the Cabinet Committee approved the appointment of independent directors to the boards of several power and energy sector entities, including GEPCO, JPCL, EIDMC, ISMO, IESCO, and TESCO. The approval and publication of the consolidated report comes as the government aims to contain fiscal risks from SOEs, an issue closely monitored by investors and lenders assessing Pakistan’s public finances and reform trajectory.
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