PIA Reports Huge Losses in Financial Results for 2017

After many delays, PIA has finally announced its financial results for the year that ended December 31, 2017 and they’re not something to look upon.

Pakistan International Airlines (PIA) reported a loss of Rs. 47.76 billion in 2017, up 6.37% over the previous year. However, revenues for the year saw a small increase of 2.07% from Rs. 127 billion in 2016 to Rs. 90.84 billion.

Basic expenses like cost fuel increased by 13.90% over the year to Rs. 30.94 billion from Rs. 27.15 billion. The national flag carrier continued its struggle to contain rising costs which grew from Rs. 103 billion to Rs. 107 billion in the previous year which took the gross loss to Rs. 16.93 billion against Rs. 14.19 billion in 2016 which is up by 19.31%.

Administrative costs were meagerly down by 1.59% to Rs. 6.28 billion, as compared with Rs. 6.31 billion. The company’s distribution costs narrowed by 1.04% and other provision adjustments were narrowed by massively 72%.

However, this potential positive impact was written off due to the increase in net exchange losses which was stated at Rs. 2.18 billion as compared with a net loss of Rs. 294 million in 2016. The finance cost of the company also jumped by 16% to Rs. 15.24 billion against Rs. 13.15 billion.

During 2017, PIA had to pay Rs. 1 billion in taxes against Rs. 104 million in 2016. The company reported a loss per share of Rs. 9.12 as compared with a loss per share of  Rs. 8.58 for the A class ordinary shares of Rs. 10. each.

For the B class ordinary shares of Rs5 each, the company reported a loss per share of Rs. 4.56 against Rs. 4.29.

The delay in financial results was due to the refusal of statutory auditors of Pakistan International Airlines (PIA) to validate financial statements for the last two years due to some missing record, which could carry huge implications for the company, shareholders and the management.

Previously due to the auditors’ refusal to sign the accounts, the PIA management had not been able to finalise the audited annual financial statement for 2017. The audited financial statements for 2018 are yet to be announced.

At the time of filing this report, PIA’s script at the bourse was trading at Rs. 4.69, down by Rs. 0.06 or -1.26% during the first trading session on Friday.