Pakistani public sector companies made net profits of Rs102 billion during the first half of the last fiscal year 2023-24, despite continuing losses from power distribution companies and Pakistan International Airlines (PIA).
The Ministerial Committee on State-Owned Enterprises, headed by Finance Minister Muhammad Aurangzeb, approved the semi-annual report for the period July-December 2023, which shows the net profit of the public sector.
The report revealed a net profit of 102 billion rupees for all state-owned companies after adjusting for the total losses incurred during the first half of the last fiscal year. The total profit amounted to 510 billion rupees, compared to losses amounting to 407 billion rupees. Seven companies affiliated with Pakistan’s sovereign wealth fund contributed Rs249 billion to the total profit.
The International Monetary Fund raised concerns about placing these companies under the umbrella of the sovereign wealth fund, objecting to transferring their profits to the fund.
Oil and Gas Development Corporation (OGDC) led earnings with Rs 123.3 billion. It was followed by Pakistan Petroleum Corporation Limited with an amount of Rs 68.8 billion, and then the National Energy Parks Management Company with an amount of Rs 36.3 billion.
Other profitable entities include Pakistan Arab Refinery Company (Rs. 35 billion), Government Holdings Limited (Rs. 32.5 billion), Lahore Electricity Supply Company (Rs. 28.4 billion), National Bank of Pakistan (Rs. 26.7 billion), and Multan Electric Power Company. Company (Rs. 22.3 billion), Port Qasim Authority (Rs. 18.5 billion), and Water and Power Development Authority (Rs. 16.8 billion).
Privatization appeared ineffective in resolving financial issues, as evidenced by the Pakistan Telecommunications Company Limited (PTCL) – which was privatized nearly two decades ago – which suffered losses of Rs 7.8 billion during the same period, according to a Finance Ministry report.
The National Highways Authority recorded the highest losses at Rs151.4 billion, followed by Quetta Electricity Supply Corporation with losses of Rs56.3 billion and PIA at Rs51.8 billion. Other entities that incurred losses included Peshawar Electricity Supply Corporation (Rs. 39 billion), Pakistan Railways (Rs. 23.6 billion), Sukkur Electricity Corporation (Rs. 21 billion), closed Pakistan Steel Mills (Rs. 14.4 billion), and Islamabad Electricity Supply Company. (12 billion rupees). 2 billion), Central Power Generation Corporation (Rs. 8.4 billion), Pakistan Telecommunication Corporation (Rs. 7.8 billion), and Pakistan Post Office (Rs. 5.5 billion).
Of the 15 biggest losing companies, seven of them operate in the energy sector.
The Prime Minister decided to shut down the Utility Stores Corporation which incurred losses worth Rs 2.2 billion and ranked 15th among the loss-making entities.
Total revenues of state-owned enterprises rose by more than 15%, reaching 7 trillion rupees in the first half of the last fiscal year. Net profit during this period amounted to 101.5 billion rupees, compared to losses of 101 billion rupees during the same period of the previous year. Total losses fell by 10%, from Rs453 billion to Rs407 billion, according to the report.
Dividends fell by 72%, with only 9 billion rupees disbursed compared to 32 billion rupees the previous year. State-owned civilian companies employ about 350,000 people.
The government provided 437 billion rupees in financial support to state-owned enterprises during this period. Despite this, the net cash flow of SOEs was positive at 122 billion rupees, with the government receiving 559 billion rupees in dividends, taxes and non-tax revenues.
The committee approved several appointments to the Board of Directors, including Jahanzeb Baig and Muhammad Kamran Khan for Overseas Pakistan, and Rubina Bashir and Muzaffaruddin for Livestock and Dairy Development.
He also reconstituted the board of directors of the Pakistan Printing Company, appointing Wahab Shehzad, Ayesha Waqar, Naeem Akhtar Sheikh, Hajra Omar and lawyer Ehsan Qazi as independent directors.
In addition, the recommendations of the Ministry of Railways on reconstitution of the boards of directors of state-owned enterprises of Pakistan Railways were approved. These companies included Pakistan Railways Consulting and Advisory Services, Pakistan Railways Freight Transport Corporation, Railway Development and Marketing Corporation, and Pakistan Railway Construction Corporation Limited.
The Ministry of National Food Security and Research has also received approval to appoint independent directors to the Fisheries Development Board and the Pakistan Cotton Standards Institute.