ISLAMABAD, June 1: Three out of the four major public sector corporations were either unable to achieve their financial targets or suffered losses in the second quarter (October-December) of the current fiscal year, partially because of higher oil prices. According to an update of the finance ministry, Pakistan Steel Mills incurred a loss of Rs15 million in the second quarter of the year, mainly because of less than targeted capacity utilisation.
The corporation had projected profit before tax of Rs818 million for the quarter. However, it earned only Rs23 million and paid a tax of Rs38 million, thus incurring a loss of Rs15 million. This was mainly because the corporation had projected capacity utilisation at 90 per cent but it actually attained 60 per cent capacity utilisation and could not achieve the target set for production.
The national flag carrier, Pakistan International Airlines, had estimated a profit of Rs461 million for the October-December quarter but instead faced a loss of Rs543 million, mainly because of increase in its fuel cost. The PIA generated Rs19.7 billion revenue against a target of Rs16.7 billion, showing an increase of 17.7 per cent but its expenditure was higher that the target.
The total expenditure amounted to Rs20.23 billion against a target of Rs16.3 billion, showing an increase of 24.34 per cent. This was mainly because of sharp increases in fuel cost, higher expenditure on landing over-flying, aircraft rental, interest payment, technical handling and salaries.
The actual deficit of Pakistan Railways went up by Rs1.1 billion due to increases in operating revenue (Rs648.7 million) and in expenditure (Rs461.4 million).
The revenue receipts of Pakistan Railways was less than the target by Rs649 million due to a decrease of Rs4 million and Rs364 million in earnings from passengers and goods, respectively, and a decline in sundry earnings. It revenue expenditure exceeded the target by Rs461 million.
The excess in operating expenditure is due to increase in fuel prices since July 2005 and revision of pay-scales of government employees with effect from July 1, 2005.
Wapda has indicated a surplus of Rs4.4 billion as against a deficit of Rs2.325 billion during the corresponding period of last year and a deficit of Rs3.45 billion during the previous quarter of current fiscal year. However, Wapda did not pay its debt liabilities to the federal government. It line losses were reduced by 0.8 per cent during the quarter under review.
The Karachi Electric Supply Corporation, whose majority shareholding has now been transferred to the private sector, also posted a net loss which was Rs2.827 billion higher than its target for the October-December quarter. Its line losses were 0.5 per cent higher than the target for the year but it did not disclose the total line losses.