PIA incurs net pre-tax loss of Rs4.6 billion last year
Despite claims of profitability, Pakistan
International Airlines (PIA) incurred a net pre-tax loss of Rs4.6 billion last
year, the Ministry of Finance revealed in its biannual report on state-owned
enterprises.
The report clarified that the previously
announced Rs26 billion profit was not from actual earnings but from a one-time
accounting adjustment — the recognition of a Rs30 billion deferred tax asset
(DTA) during the airline’s restructuring. This DTA, which allows future tax
benefits against past losses, created a non-cash "accounting profit"
and should not be seen as a sign of operational success.
"Excluding the DTA, the airline's pre-tax
loss stands at Rs4.6 billion for the full year and Rs2.3 billion for the half
year," the report stated. The finance ministry stressed that these
adjustments affect earnings quality and should be considered in future
valuations.
Read More PIA
returns to profitability after 21 years, Posts Rs26.2 billion net gain for 2024
Following PIA’s restructuring, Rs660 billion
in debt was removed from its books, slashing long-term liabilities from Rs295
billion to Rs13 billion and reducing finance costs from Rs79 billion to Rs10
billion. However, operational challenges persist, with total service costs
rising to Rs106.6 billion.
To improve sustainability, the Central
Monitoring Unit (CMU) advised the airline to modernize its fleet, hedge fuel
prices, and renegotiate supplier contracts.
Source: Express Tribune