Eighteen out of 52 key state-owned enterprises in Sri Lanka have reported losses in the first six months of 2025, placing a renewed burden on the government and taxpayers, according to the Mid-Year Fiscal Report issued by the Ministry of Finance.
The report shows that overall profitability in the state enterprise sector has narrowed sharply, with major entities such as the Ceylon Electricity Board (CEB), SriLankan Airlines and Lanka Sugar Company among the largest loss-makers. In 2024, the 52 enterprises collectively posted a profit of Rs. 280.7 billion during the first half of the year. In contrast, the figure for the same period in 2025 has dropped to Rs. 227.8 billion.
The CEB has reported a pre-tax loss of Rs. 13.2 billion as of 30 June 2025, compared to profits of Rs. 144 billion in 2024 and Rs. 57.6 billion in 2023. SriLankan Airlines has also experienced a sharp downturn, posting a pre-tax loss of Rs. 12 billion from April to June 2025. Its cumulative losses now stand at Rs. 628 billion, pushing the airline’s equity position to a negative Rs. 415 billion, with total liabilities amounting to Rs. 606.7 billion.
According to a news report compiled by the BBC, the Finance Ministry attributes the airline’s continuing losses to limited revenue diversification and high debt-servicing commitments. The Cabinet has approved the restructuring of long-overdue debt totalling USD 210 million and Rs. 31.4 billion, to be serviced through Treasury participation.
Lanka Sugar Company Limited has widened its losses as well, recording a pre-tax loss of Rs. 2.6 billion as at 30 June, compared to a Rs. 1.9 billion loss in 2024 and a Rs. 2.8 billion profit the previous year.
Presenting the Budget 2026, President Anura Kumara Dissanayake said political interference, poor financial discipline and recruitment based on patronage rather than merit had resulted in state entities becoming a significant financial strain. A number of institutions have been unable to pay bank loans, taxes, or employee EPF/ETF contributions. The government has already allocated Rs. 11 billion to settle overdue payments such as employee benefits and outstanding taxes.
He said the government intends to shut down institutions with no commercial, regulatory or administrative relevance, merge agencies performing duplicate functions and reorganise entities that have drifted from their original purpose.
State institutions reporting losses as of 30 June 2025 include:
* Ceylon Electricity Board
* SriLankan Airlines (Ltd)
* Lanka Sugar Company (Ltd)
* State Engineering Corporation
* Lanka Sathosa (Ltd)
* Hotel Developers (Lanka) Ltd
* State Development and Construction Corporation
* Sri Lanka Rupavahini Corporation
* State Timber Corporation
* Independent Television Network (ITN)
* Sri Lanka Broadcasting Corporation
* State Printing Corporation
* Ceylon Fisheries Harbour Corporation
* National Livestock Development Board
* Janatha Estate Development Board
* Sri Lanka State Plantation Corporation
* Sri Lanka Cashew Corporation
* Ceylon Fisheries Corporation
Institutions unable to pay EPF/ETF and taxes, requiring Treasury support, include:
* Lanka Sugar Private Ltd
* Janatha Estate Development Board
* Sri Lanka State Plantation Corporation
* Sri Lanka Rupavahini Corporation
* Ceylon Fisheries Corporation
* National Livestock Development Board
* Elkaduwa Plantations Ltd
* Sri Lanka Broadcasting Corporation
* North Sea Ltd
* Lanka Ceramics Joint Venture Corporation
Despite these pressures, the Finance Ministry notes that key state banks have increased profitability by Rs. 65.5 billion in the first half of 2025, while the Sri Lanka Ports Authority, National Water Supply and Drainage Board and the Employees’ Trust Fund Board have also reported improved performance.
The government has already initiated action to close 33 inactive institutions by 2026 and restructure others in line with new mandates and efficiency targets. (Newswire)