Key Takeaways
- Finance Division rejects media reports linking SOE financial decline to fiscal flow issues.
- SOEs posted aggregate profits of Rs423.3 billion, with losses contained at Rs342.8 billion.
- Net fiscal flow for SOEs was positive at Rs35.8 billion, despite increased government outflows.
The Finance Division has dismissed media reports suggesting a decline in the financial health of State-Owned Enterprises (SOEs), stating that such claims are based on a misinterpretation of fiscal flow data.
In a press release, the ministry clarified that fiscal flows and SOE financial performance are distinct measures, with fiscal flows capturing transactions between the government and SOEs, including support and receipts, while SOE performance is assessed through profitability and other financial and operational indicators.
According to the statement, profitable SOEs generated aggregate profits of Rs423.3 billion during the first half of FY2025-26, while losses at loss-making entities were contained at Rs342.8 billion, indicating progress under the ongoing SOE reform framework.
The Finance Division highlighted that SOEs remained net contributors to the government, generating Rs839.8 billion in inflows against Rs804.0 billion in outflows, resulting in a positive net fiscal flow of Rs35.8 billion.
The rise in government outflows, primarily due to equity injections and financing for restructuring and circular-debt management, was noted, but dividend receipts grew by 26 percent and tax contributions from SOEs increased by 10 percent.
The ministry emphasized that movements in net fiscal flow should be understood in the context of the timing and composition of government-SOE transactions and should not be interpreted as a standalone measure of SOE profitability or financial performance.
The Finance Division also cited ongoing reforms, including the closure of Utility Stores Corporation, the wind-down of Pakistan Agricultural Storage and Services Corporation, and the privatisation of First Women Bank Limited and Pakistan International Airlines.
In the power sector, nine distribution companies are included in the privatisation programme, with varying stages of the transaction process. The ministry noted that the broader restructuring and privatisation pipeline has drawn strong local and global investor interest.
Governance reforms are also underway, aimed at strengthening independent and professional boards, business-plan accountability, performance monitoring, and transparent, data-driven oversight across the SOE portfolio.
The Finance Division stated that the direction of reform is clear: a smaller SOE footprint, stronger governance and accountability, greater transparency, improved commercial discipline, and progressively lower fiscal risk.
