Sri Lanka: State-owned enterprises face losses in 2025

Sri Lanka’s State-owned enterprises (SOEs) posted a combined profit of 444.4 billion Sri Lankan Rupees in 2025, down 17.6 percent from the previous year, as losses at the power utility dragged down overall performance, according to the Finance Ministry.

The decline was driven by the state-run electricity provider, which swung from a profit of 141.6 billion rupees in 2024 to a loss of 38.7 billion rupees in 2025 following tariff cuts. Excluding the utility, the remaining 50 major SOEs recorded profits of 483.2 billion rupees, up 21.5 percent.

State-owned banks remained the biggest profit earners, led by Bank of Ceylon with 120.8 billion rupees, while the petroleum corporation reported profits of 36.5 billion rupees. Meanwhile, SriLankan Airlines widened its loss to 23.2 billion rupees despite stronger operating revenue.

While there have been long-standing calls by international lenders and market reform advocates for restructuring and disinvestment of loss-making SOEs, Colombo has accelerated reforms, including liquidating non-functional entities and restructuring major state enterprises under its IMF-backed programme.