Pakistan Steel Mills (PSM) has accumulated losses of Rs245.9 billion after more than a decade of financial decline, according to the latest audit report issued by the Auditor General of Pakistan. The report blames weak governance, poor financial management, and years of halted operations for the company’s worsening financial condition.
According to the audit, PSM’s accumulated losses jumped by more than 1,355 percent, increasing from Rs16.9 billion in FY2008-09 to Rs245.9 billion by FY2023-24. The report also pointed out that the company has yet to finalize its financial statements for FY2023-24 and FY2024-25, raising questions about transparency and financial accountability.
The audit highlighted several governance issues, including the incorrect recording of Rs11 billion in equity. It also noted that ownership records for 1,675 acres of land remain outdated and revealed that an executive was appointed in violation of the State-Owned Enterprises Act.
The report further stated that finished steel inventory worth Rs17.6 billion has remained unsold since production came to a halt in 2015. It added that unresolved theft cases, weak asset management, unauthorized occupation of 1,929 residential units, and discrepancies in water supply costs continue to put pressure on the company’s finances. Together, these issues are causing annual losses of more than Rs1.1 billion.
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From FY2008-09 to FY2023-24, Pakistan Steel Mills recorded an average annual net loss of Rs25.5 billion. The company reported a profit only once during this period, in FY2021-22.
The federal government provided loans worth Rs106.2 billion between 2013 and 2025 to keep the corporation functioning. During the same period, finance costs rose from Rs464 million to Rs20 billion, while administrative expenses increased by more than three times.
Since production stopped in 2015, Pakistan Steel Mills has lost its main source of income and has largely depended on selling its remaining steel inventory.
By FY2023-24, the company’s total liabilities had reached Rs358 billion. The audit noted that higher land valuations, rather than improved financial performance, were mainly responsible for the increase in equity. It also highlighted a sharp rise in trade debts, adding further strain to the company’s financial position.
The Auditor General has recommended immediate restructuring of Pakistan Steel Mills. The report also called for the appointment of a permanent chief executive officer and the preparation of a comprehensive revival plan. It suggested exploring public-private partnerships or leasing assets to reduce losses and support the company’s long-term financial stability.