PIA declare massive loss of PKR 97 billion in 2022

May 22, 2023

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On May 19, Pakistan International Airlines (PIA) released its annual earnings report for the fiscal year ending in 2022 to the Pakistan Stock Exchange (PSX). The company reported a consolidated loss of Rs 97.23 billion and an unconsolidated loss of Rs 88 billion, marking year-on-year (YoY) increases of 82% and 76% respectively. The consolidated earnings report includes the financial performance of PIA’s subsidiary, PIA Investments Limited (PIAIL), and its associate company, Minhal Incorporated (Minhal), Sharjah. PIAIL, in turn, has several subsidiaries including Roosevelt Hotel Holding Company N.V. (RHC), RHC Operating LLC, Minhal France Sa.r.l., Minhal France B.V., PIA Hotels Limited, PIA Aviation Limited (PAL), Avant Hotels (Private) Limited, and Minhal France S.A. (MFSA).

The revenue experienced a substantial YoY surge of 103%, increasing from Rs 88 billion to Rs 178.5 billion, while the cost of services grew by 86% YoY from Rs 96.5 billion to Rs 179.3 billion. PIA demonstrated improved operational efficiency as the cost of services as a percentage of revenue decreased from 109.61% to 100.42%. The gross losses also significantly decreased by 91% YoY, plummeting from Rs 8.46 billion to Rs 755.8 million. This reflects in PIA’s gross loss margin (GLM), which improved YoY from -10% to -0.42%.

Distribution costs rose by 28% YoY from Rs 5.352 billion to Rs 6.83 billion, while administrative expenses increased by 29% YoY from Rs 8.9 billion to Rs 11.477 billion. On the other hand, other income fell by 32% YoY from Rs 6.89 billion to Rs 4.68 billion. Operating losses, however, decreased by 17% YoY from Rs 18.42 billion to Rs 15.33 billion, and the operating loss margin (OLM) improved YoY from -21% to -9%.

PIA’s interest expense saw a significant surge of 81% YoY, rising from Rs 28.5 billion to Rs 51.7 billion. Earnings before taxation resulted in a loss of Rs 100.58 billion, marking a substantial 85% YoY increase compared to last year’s Rs 54.35 billion. PIA’s tax rebate increased by 287% YoY from Rs 867 million to Rs 3.35 billion, while the effective tax rate (ETR) rose from 2% to 3%. The net consolidated losses for the year amounted to Rs 97.23 billion, indicating an 82% YoY increase compared to the previous year’s Rs 53.48 billion. However, the net loss margin (NLM) improved YoY from -61% to -54%.