PIA’s annual loss soars to Rs45bn

Published October 14, 2017
PIA's loss from operations in January-March surged 2.9 times to Rs7.71bn on an annual basis because of rising fuel costs.— White Star
PIA's loss from operations in January-March surged 2.9 times to Rs7.71bn on an annual basis because of rising fuel costs.— White Star

KARACHI: Pakistan International Airlines Corporation (PIA) posted a net loss of Rs45 billion ($433 million) for 2016, a jump of 36 per cent over the loss of Rs33bn ($310m) incurred in the previous year.

According to a stock filing on Friday, the company’s revenue was down 2pc to Rs89bn from Rs91bn a year ago.

The airline also released financial figures for January-March. It posted a net loss of Rs11bn in the three-month period, up 91pc from Rs6bn in the similar quarter of the earlier year.

Revenues for the two comparable quarters remained almost flat. The loss from operations in the latest quarter jumped to Rs7.71bn from Rs2.65bn a year ago due to an increase in aircraft fuel costs that amounted to Rs8bn in January-March.

But the bottom line was hit mainly by an unexplained item marked as “other costs”. It amounted to Rs20bn for the quarter, up from Rs18bn a year ago.

Investors will have to wait for detailed accounts to study the relating notes to learn what this amount represents.

PIA Secretary Muhammad Shuaib was not available for comment.

The airline did not announce any dividend. The stock lost 36 paisa to close at Rs4.63 a share on the stock market.

Total assets of the airline at the end of 2016 stood at Rs110bn. The notes appended to the accounts for the quarter ending on March 31 said that the airline had a fleet size of 36 aircraft with 11 777s, 15 A320s, including four on wet lease, five ATR72s and five ATR42s.

“The company is in the process of acquiring more aircraft on dry lease for which tenders have been floated,” stated a note attached to the quarterly accounts.

In the last report, PIA mentioned that as the majority shareholder in the company, the government had communicated that it would extend “maximum” support to maintain the company’s “going concern” status.

It was possibly to explain the auditors’ note on the company’s “going concern concept” as its liabilities exceeded assets.

The company asserted that “PIA continues and would sustain in the long term as a viable business entity” on the basis of numerous financial measures taken since 2012 to lift the airline off the ground.

Published in Dawn, October 14th, 2017

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