Pakistan’s state-owned enterprises (SOEs) saw their combined adjusted profit fall 30 percent to Rs. 80.5 billion in the first half of FY26, with the power sector continuing to weigh heavily on the government’s finances.
The decline was reported in the Ministry of Finance’s latest SOEs Monitoring Report covering July to December 2025. Aggregate profits fell to Rs. 423.3 billion from Rs. 457.2 billion a year earlier, while total losses remained almost unchanged at Rs. 342.8 billion.
The worsening financial position has also increased the government’s daily burden. Loss-making SOEs are estimated to be losing around Rs. 2.8 billion every day, while the government is providing nearly Rs. 6.6 billion a day through subsidies, grants, loans and equity injections.
The power sector remains the biggest source of concern. Circular debt in the sector increased by Rs. 374 billion during the period, with the Finance Ministry pointing to weak recoveries and operational inefficiencies.
The ministry said the financial support required by SOEs is putting pressure on public finances and limiting the government’s ability to spend on development. It estimated that the burden during the six-month period was equivalent to about 11 percent of federal budgetary receipts.
The wider SOE portfolio is also carrying more than Rs. 10 trillion in debt exposure. Around Rs. 2.5 trillion consists of foreign currency-denominated liabilities, leaving the government exposed to exchange rate movements, refinancing risks and pressure from external financing needs.
The sector’s balance sheet weakened during the period, with total assets falling 2 percent to Rs. 37.107 trillion from Rs. 37.721 trillion. Equity declined 3 percent to Rs. 6.407 trillion, while liabilities fell 1 percent to Rs. 30.7 trillion.
The Finance Ministry said the combination of lower equity and high leverage continues to create fiscal and refinancing risks, particularly for capital-intensive SOEs operating in power, infrastructure and transport.
Profitability also remains concentrated in a small number of companies, with the oil and gas and financial sectors accounting for a substantial share of overall earnings. This leaves the broader SOE portfolio exposed to changes in commodity prices, exchange rates, regulations and wider economic conditions.
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