After much delay, PIA has finally announced its unconsolidated financial results for the year ended December 31, 2018.
The delay in announcing financial results was due to the refusal of statutory auditors of Pakistan International Airlines (PIA) to validate financial statements because of missing records, which could carry huge implications for the company, shareholders and the management.
The national carrier has reported a staggering loss of Rs. 67.32 billion in 2018, an increase of 32% over the previous year. It had reported a loss of Rs. 51.00 billion in 2017.
However, revenues for the mentioned period increased by 14.30% from Rs. 90.55 billion in 2017 to Rs. 103.49 billion in 2018. The company managed to increase its revenue for 2018 but it was the rise in the cost of services by 14.34% that led to gross losses of Rs. 19.73 billion, which were 14.60 % higher than the Rs. 17.22 billion losses recorded in 2017.
Basic expenses like cost fuel increased by 43.76% over the year to Rs. 43.55 billion from Rs. 30.94 billion due to the increase in oil prices.
The company reported a massive increase of 586% in exchange losses in 2018. They were reported at Rs. 14.95 billion as compared to Rs. 2.18 billion in 2017, likely due to the rupee’s depreciation against the US dollar in the period. The finance costs of the company also increased to Rs. 20.38 billion, up by 33.73% as compared with Rs. 15.24 recorded in 2017 due to an increase in interest rates in the country.
The company reported a loss per share of Rs. 12.86 as compared to a loss per share of Rs.9.74 for the A-class ordinary shares of Rs. 10. each. For the B class ordinary shares of Rs. 5 each, the company reported a loss per share of Rs. 6.43 against Rs. 4.87.
It is pertinent to mention that the PSX had already placed the loss-making airline in the defaulters segment with effect from October 10, 2018 for its failure to hold AGM and submit annual and audited accounts for the year ended December 31, 2017 and 2018.
At the time of filing this report, PIA’s shares at the bourse were trading at Rs. 6.60, down by Rs. 0.04 with a turnover of 2.1 million shares on Friday
Big Claims by the CEO
Pakistan International Airlines (PIA) Chief Executive Officer, Air Marshal Arshad Mahmood Malik,had claimed that monthly operational losses of the airlines had been reduced to Rs. 1.5 billion compared to more than Rs. 3 billion before he assumed the charge. However, as of 2019, not a single quarter result has been made public.
SECP took serious notice of the statement of Pakistan International Airlines (PIA) CEO about earnings of PIA, which was viewed as market manipulation. The SECP board was informed that after a recent statement issued by the PIA’s chief, market transactions had increased while the corporation’s share prices went up significantly.
The commission was directed to look into it and take appropriate enforcement action.
Disposal of PIA properties
The government has also increased the pace to privatize PIA Investment Limited. CCoP discussed the privatization of PIA-Investment Limited and approved a proposal for the constitution of a task force to examine and process all necessary formalities for early disposal of PIA’s properties, including the Roosevelt Hotel in New York and Hotel Scribe in Paris.