Power distribution companies aggregate losses hit Rs1.15 trillion, AGP report shows

Pakistan’s power distribution companies (Discos) remained under financial pressure in FY2024-25, with aggregate losses reaching Rs1.15 trillion, according to the Auditor General of Pakistan’s report for 2025-26.

The report showed Lahore Electric Supply Company posted a net loss of Rs45.38 billion during the year, while Hyderabad Electric Supply Company recorded a loss of Rs12.90 billion.

Hesco remained the weakest among the reviewed companies, with accumulated losses rising to Rs513 billion. Lesco’s accumulated losses stood at Rs331.20 billion, pushing its equity into negative Rs174.95 billion and raising concerns over its ability to continue operations without government support.

Multan Electric Power Company reported a profit of Rs5.26 billion, but its accumulated losses remained at Rs174.56 billion, with negative equity of Rs76.72 billion. Auditors rated its financial sustainability as unsatisfactory.

In contrast, Faisalabad Electric Supply Company recorded a net profit after tax of Rs9.43 billion, compared with Rs998 million in FY2023-24. Its billed revenue rose to Rs470.12 billion, while lower electricity procurement costs helped restore total equity to a positive Rs62.97 billion by June 2025.

Islamabad Electric Supply Company reduced its annual loss to Rs1.42 billion from Rs15.80 billion a year earlier. Its revenue increased to Rs331.07 billion, supported by lower transmission and distribution losses and better recovery of receivables.

The report said Fesco’s debtor turnover days fell to 65 from 108 in FY2021-22, while receivables declined slightly to Rs82.08 billion. The company generated Rs15.05 billion in cash from operations, though employees’ retirement benefit obligations stood at Rs122.85 billion.

Iesco’s transmission and distribution losses fell to 8.39 percent, moving closer to Nepra’s benchmarks. Its debtor turnover days improved from 155 to 55 over five years, and cash generated from operations reached Rs44.62 billion. However, retirement benefit liabilities of Rs109.74 billion and liquidity constraints continued to weigh on its finances.

Lesco posted a negative net profit ratio of 6.87 percent and faced a working capital deficit, with current liabilities exceeding current assets by Rs92.45 billion. Its staff retirement benefit obligations stood at Rs176.09 billion. Auditors issued a qualified opinion on the company’s financial statements.

Mepco reported revenue of Rs524.06 billion and recovered dues within an average of 34 days. Its transmission and distribution losses improved from 14.95 percent to 13.33 percent, but remained above Nepra’s target of 11.34 percent. The company also relied on government subsidies of Rs80.12 billion, while retirement benefit obligations increased to Rs177.14 billion.

Hesco recorded a current ratio of 0.25 and faced liquidity pressure, with creditor payment periods stretching to nearly 800 days. Its employees’ retirement benefit liabilities rose to Rs102.98 billion and remained entirely unfunded.

The audit reports showed that while Fesco and Iesco improved profitability and operational performance, Lesco, Hesco and Mepco remained exposed to accumulated losses, weak liquidity, pension liabilities and dependence on government support.