Bold statement: State-owned enterprises (SOEs) in FY25 carried an enormous financial burden, with 25 entities collectively losing Rs 832 billion and overall losses surging by 300%. But here’s where it gets controversial: a small cluster of big earners still drive most of the sector’s profits, raising questions about efficiency, risk, and policy priorities.
In FY25, the net losses for SOEs rose to Rs 123 billion from Rs 30.6 billion in FY24, marking a 300% increase. The National Highway Authority (NHA) posted the largest loss at Rs 294.9 billion, followed by Quetta Electric Supply Company (Qesco) with Rs 112.7 billion, Pesco at Rs 92.7 billion, Pakistan Railways at Rs 60.3 billion, and PIA Holding Company Limited at Rs 48.9 billion. Other major losers included National Power Parks Management Company (Rs 46.1 billion), Neelum-Jhelum Hydropower Company (Rs 29.4 billion), Pakistan Steel Mills (Rs 26 billion), and Sukkur Electric Power Company (Rs 25.3 billion).
Smaller losses were reported by Pakistan Post Office (Rs 19.3 billion), Pakistan Agricultural Storage & Services Corporation (Rs 19.0 billion), Hyderabad Electric Supply Company (Rs 12.9 billion), Lahore Electric Supply Company (Rs 12.7 billion), and GENCO-II (Rs 10.3 billion).
Several smaller entities recorded losses as well, including National Insurance Company (Rs 2.9 billion), CPPA-G (Rs 2.0 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).
Conversely, FY25 also saw a group of SOEs posting substantial profits, totaling an aggregate Rs 709 billion. Profitability was highly concentrated among a few large players: Oil and Gas Development Company Limited led with 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 notable 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 relatively small number of high-profile SOEs account for nearly 90% of total profits, indicating a heavy concentration of earnings within the portfolio. These entities form the profitability backbone of the SOE sector, generating the surplus that partially offsets losses across the rest of the portfolio.
In FY25, the SOE balance sheet showed mixed signals. Total equity rose by about 7%, climbing from Rs 5,865.2 billion in FY24 to Rs 6,245.7 billion in FY25. This increase was largely driven by recapitalisation and sizable equity injections, especially in the power sector to clear circular debt.
On the liabilities side, total liabilities decreased by around 3%, dropping from Rs 32,570.5 billion to Rs 31,742.4 billion over the year. Total assets remained relatively stable, with a slight dip of about 1%, from Rs 38,435.7 billion to Rs 37,988.1 billion.
Fiscal support from the government to SOEs rose to Rs 2,078.5 billion in FY25, up 37% from Rs 1,512.9 billion in FY24. The drivers of this expanded support included:
- Equity injections: A significant increase, reaching Rs 728.9 billion in FY25, largely tied to one-off power-sector circular debt clearance and payments to IPPs presented as equity injections.
- Loans to SOEs: Government lending rose 34%, from Rs 263.3 billion to Rs 354.1 billion, signaling ongoing direct financial backing for operations and restructuring.
- Grants and subsidies: Both declined, with grants down 27% to Rs 269.2 billion and subsidies down 7% to Rs 726.3 billion. This shift may reflect changing priorities or efficiency gains in certain areas.
- Sovereign guarantees: These jumped from Rs 1,419.0 billion in FY24 to Rs 2,164.0 billion in FY25, a 52% increase due to the accounting treatment of self-liquidating guarantees on stock rather than new guarantees.
Tax revenue for FY25 totaled Rs 12,970 billion, with about Rs 2,078 billion (roughly 16%) recycled back to SOEs via subsidies, equity injections, grants, and loans. In practical terms, roughly every Rs 6 collected in taxes circulates back to support the SOE sector in some form.
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