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ISLAMABAD:

The finance ministry has disclosed in a report that Pakistan International Airlines (PIA) last year incurred a net loss of Rs4.6 billion and one-off accounting profit of Rs26 billion due to treating past losses as future assets “should not be misinterpreted as a sign of operational profitability”.

The biannual report on federal state-owned enterprises (SOEs) has again highlighted the inefficiencies of PIA, though it has been freed from legacy debt and liabilities.

The Central Monitoring Unit (CMU) of the Ministry of Finance released the report on Friday, which gave an in-depth understanding of the accounts of PIA Corporation Limited (PIACL) after its restructuring in which Rs660 billion worth of debt was taken out of the company books.

“Despite the overhaul, PIACL Core still reported a pre-tax loss of Rs4.6 billion for the full year and Rs2.3 billion over six months,” said the Ministry of Finance.

Three months ago, every high-up from Defence Minister Khawaja Asif to Prime Minister Shehbaz Sharif showed satisfaction with PIA’s profit of Rs26 billion without knowing that it was a mere “accounting profit”. The finance ministry’s report stated that a one-off deferred tax asset (DTA) recognition of approximately Rs30 billion was booked as part of the restructuring. While this resulted in an “accounting profit”, it is important to recognise that this is a non-cash adjustment, stated the ministry while correcting the record.

The report stated “excluding the DTA, the airline’s net loss before tax stands at Rs4.58 billion for 12 months,” ending December. This DTA reflects the company’s expectation of future taxable profits, which is itself a vote of confidence in the potential recovery path, but it should not be misinterpreted as a sign of operational profitability, said the ministry. “The CMU has, therefore, highlighted this so that future valuations consider these items”.

Accounting rules permit the DTA recognition where sufficient future taxable profits are probable, enabling to offset the accumulated tax losses.

“The deferred tax asset of Rs30 billion represents a future tax shield and should not be considered part of core profitability,” said CMU Director General Majid Soofi.

But the CMU has plainly said that “the profit figures are essentially impacted by deferred tax reversals, impacting the effective tax rate and earnings quality”.

The report stated that a significant outcome of the restructuring was the dramatic reduction in long-term financing liabilities, from over Rs295 billion to just Rs13 billion, including lease obligations. Consequently, the finance cost plunged from Rs79 billion to Rs10 billion. The cost of services remains elevated and total operational costs reached Rs106.6 billion. “To mitigate these pressures, PIACL must aggressively pursue fleet modernisation, enter fuel hedging contracts and renegotiate existing supply agreements,” the CMU recommended.

It added that Rs8.3 billion in administrative cost and another Rs8.2 billion in distribution cost were high. PIACL also incurred exchange losses of Rs2.3 billion, reflecting unhedged exposure to foreign currencies that is a structural vulnerability for any international airline.

The finance ministry said that following delisting from the Pakistan Stock Exchange and full government ownership of PIA via Holding Company, PIACL “is now free from short-term market pressures”.

But it said that a performance-based human resources model must be introduced, along with international productivity benchmarks and merit-based promotions.

The ministry stated that PIA and Pakistan Telecommunication Company Limited (PTCL) also posed major risks. PIA’s heavy debt despite debt being carved out increases insolvency risks, requiring urgent restructuring and potential strategic partnerships. “Rapid privatisation should be ensured,” it said. After the failure of the first attempt, for the second attempt to privatise PIA, the Privatisation Commission has pre-qualified four parties and three of them are cement makers.

The finance ministry said that PIA and PTCL face market pressures and operational inefficiencies. Debt restructuring, operational improvements and reduced leverage through asset sales are key measures to regain financial health and reduce their dependence on the government, it recommended. PIA is among the entities that face undue interference. It has also been placed among the entities that have low compliance with the SOEs Act, falling even below 60% threshold.

To address these challenges, strategic mandates of SOEs must be clearly recalibrated and aligned with national economic goals and fiscal discipline. Long-term business plans that incorporate measurable stakeholder-aligned objectives must be institutionalised, particularly for high loss-making entities like power distribution companies, Railways, and PIA, stated the report. It added that the restructuring of PIACL marks a turning point in the airline’s decades-long struggle with debt and inefficiency.

Through the successful implementation of the Scheme of Arrangement (SOA), the airline has shed legacy debt and non-core assets, emerging as a streamlined, aviation-focused entity. This strategic realignment allows the company to shift from financial firefighting to operational revitalisation. The government has parked Rs660 billion worth of PIA debt in a new holding company along with non-core real estate assets, which substantially cleaned up the balance sheet.

With this separation, PIACL now operates as a focused airline business, while PIA Holding Company takes on the responsibility of settling historical obligations through budgetary support and asset monetisation. This structure enables clearer financial reporting and makes future privatisation or partnerships more feasible. Post-restructuring, PIACL’s total assets are recorded at Rs187 billion after accounting adjustments.

The company’s current liabilities have declined from Rs482 billion to Rs142 billion and non-current liabilities from Rs366 billion to Rs41 billion. These carve-outs have eliminated the suffocating debt overhang and improved solvency metrics, offering much-needed breathing space for strategic decision-making, according to the report.

KARACHI: As the probe into actor-model Humaira Asghar’s death progresses, police have retrieved data from her electronic devices, offering new clues to the investigators, officials confirmed Saturday night.

She was found dead on July 8 in a flat in Defence Phase VI’s Ittehad Commercial area, where she had been living alone for seven years.

Her body was discovered when a court-appointed bailiff arrived to enforce an eviction order over unpaid rent, following a case filed by the flat’s owner.

In a breakthrough pointing to new leads, investigators have accessed her three mobile phones, a tablet, and a laptop, officials familiar with the case say.

They said the passwords for the devices were written in a personal diary found in the room where the actor’s decomposing body was discovered, allowing them to unlock and recover the data.

Two people have so far recorded their statements, while two others have been summoned for questioning, officials said.

Police added that the actress regularly visited a gym and a beautician.

Her gym trainer and others from her close circle will also be approached to help piece together her final days, according to investigators.

Humaira’s bank accounts, transactions, and communication records have also been reviewed, authorities said, noting that her contact list was small, suggesting a close-knit circle.

Officials further said no evidence suggesting foul play was found in Humaira Asghar’s apartment, while the exact cause of death would become clear once the post-mortem and chemical examination reports were available.

A case will be registered after the reports are received, they confirmed.

On July 10, Sindh Police’s Deputy Inspector General (DIG) South, Asad Raza, had said that the model’s body is probably six months old.

“The expiry date of food and drinks found in the flat is 2024, and the last messages in the actor’s phone records are also from October 2024,” DIG Raza had said, based on the police surgeon’s finding that the actor’s body was in an “advanced stage of decomposition”.

Humaira shot to fame with her appearance on the reality show Tamasha Ghar and later cemented her place in the spotlight through her role in the film Jalaibee.

Her death comes less than three weeks after renowned veteran actress Ayesha Khan was found dead in her flat in Karachi’s Gulshan-e-Iqbal area.

The passing of 84-year-old Ayesha came to light after neighbours alerted her family to a foul smell coming from her apartment.