PIA Posts Staggering Loss of Over Rs. 43 Billion in H1 2022

Pakistan International Airlines Corporation Limited (PIACL) has announced its financial results for the half-year ended 30 June 2022.

It has incurred a staggering loss of Rs. 43.48 billion, increasing by 64 percent compared to a loss of around Rs. 26.53 billion in the same period last year, according to a filing at the Pakistan Stock Exchange (PSX).

According to the PIAC’s consolidated results, its net revenue went up by 160 percent to Rs. 73.89 billion in January-June 2022 against Rs. 28.33 billion in the same period of last year. The cost of services soared to Rs. 76.49 billion, compared with Rs. 37.25 billion last year.

The airline reported a gross loss of Rs. 2.6 billion compared to Rs. 8.92 billion last year, which is down by 71 percent.

Administrative expenses increased to Rs. 5.708 billion from Rs. 4.91 billion, while the distribution costs went up by 34 percent to Rs. 3.13 billion compared to Rs. 2.33 billion during the first half of 2022. Fuel costs during the period had a massive 300 percent increase from Rs. 7.63 billion in January-June 2021 to Rs. 30.57 billion in the same period this year.

PIA is still suffering from liquidity issues that have increased borrowings and raised the finance cost by 78.16 percent to Rs. 21.70 billion from Rs. 12.18 billion in the half year. This increase was also influenced by a hike in interest rates.

The Assistant Vice President at JS Global, Muhammad Waqas Ghani, while commenting on the results said,

As per news flow, the Qatar Investment Authority may invest up to US$3bn in Pakistan. Prospective sectors are Aviation, Power, Hospitality and Renewable energy. To recall Qatar has already planned to invest US$2bn in Pakistan where some of the above may overlap the already planned investment. In the recent official meeting, the Pakistani delegation has reportedly offered a 25% stake in Roosevelt Hotel in New York’s Manha­ttan area. The said investment is currently held by the national carrier, Pakistan International Air­lines (PIA) through PIA-Investments Limited. This might result in a cash inflow helping in easing off some pressure on the airline. PIA has been under severe financial pressures and also posted a gross loss in its June quarter results. The company also faced higher financial charges and exchange losses during the period.

PIA also reported a net exchange loss of Rs. 13.82 billion during the period in review.

The company reported a loss per share of Rs. 8.31 as compared to a loss per share of Rs. 5.07 for the A-class ordinary share of Rs. 10. each. For the B class ordinary shares of Rs. 5 each, it reported a loss per share of Rs. 4.16 versus Rs. 2.54.

At the time of filing this report, PIA’s scrip at the bourse was trading at Rs. 4.93, down by Rs. 0.42 or 7.85 percent, with a turnover of 7.5 million shares on Thursday.