The Finance Ministry yesterday said 51 major State Owned Enterprises (SOEs) reported a combined profit of Rs. 259.3 billion in the first half of 2026, up from Rs. 227.8 billion a year earlier.
The rise in cumulative earnings is despite rising input costs, supply chain disruptions and order cancellations caused by the Middle East conflict, with State banks leading the gains while Treasury subsidies supported Ceylon Petroleum Corporation (CPC) and SriLankan Airlines sank deeper into losses.
The figures are contained in the Ministry of Finance, Planning and Economic Development’s Mid-Year Fiscal Position Report released yesterday. Between April and June, the General Treasury provided subsidies of Rs. 41 billion to the CPC and Rs. 15 billion to the National System Operator (Private) Limited (NSO) to mitigate the impact of the conflict on the public and the wider economy.
The State banks delivered the strongest results. Bank of Ceylon (BoC) reported profit before tax (PBT) of Rs. 62.6 billion, up from Rs. 59.4 billion, driven by a 9.2% rise in total operating income to Rs. 131.4 billion. Its loans and advances grew 6.6% to Rs. 2.5 trillion while deposits fell 1.6% to Rs. 4.3 trillion, and its impaired (Stage III) loans ratio, a measure of bad loans, improved to 5.01% from 5.59% at end-2025. People’s Bank recorded an all-time high PBT of Rs. 32.6 billion against Rs. 28 billion, on an 18.9% rise in net interest income to Rs. 82.4 billion, with loans up 9.7% to Rs. 1.9 trillion, deposits down 2% to Rs. 3.2 trillion and its Stage III ratio improving to 6.7% from 7.7%. National Savings Bank’s PBT fell 6.2% to Rs. 22.6 billion, mainly due to a 10% rise in personnel expenses to Rs. 13.8 billion.
The CPC’s results reflected the conflict’s direct cost. Net sales revenue rose 40.4% to Rs. 576.6 billion on higher domestic fuel prices, but its petroleum import bill surged 73.8% to $ 1.7 billion from $ 1 billion amid disruptions to shipments through the Strait of Hormuz and higher shipping and insurance costs. Cost of sales rose 50.2% to Rs. 567.6 billion, cutting gross profit by 72.9% to Rs. 8.9 billion. Operating profit nevertheless rose to Rs. 23.9 billion from Rs. 11.1 billion, mainly due to the April to June subsidy, and with an unrealised exchange gain of Rs. 7.2 billion, net profit rose 71.8% to Rs. 29.2 billion. Total fuel subsidies to domestic petroleum market players amounted to about Rs. 57 billion.
SriLankan Airlines posted a loss before tax of Rs. 35.6 billion in the first quarter of the 2026/27 financial year, against Rs. 12 billion a year earlier, based on unaudited management accounts. Revenue rose to Rs. 82.8 billion from Rs. 62.6 billion, but total expenditure climbed 40.4% to Rs. 95.2 billion as aircraft fuel costs jumped about 93% to Rs. 41.2 billion, producing an operating loss of about Rs. 12.5 billion before exchange losses. The group’s net loss narrowed to Rs. 32.2 billion after Rs. 3.4 billion in net income from SriLankan Catering.
“The above financial performance demonstrates that SLA continues to face significant structural financial and liquidity challenges,” the report said. With total liabilities of Rs. 561.4 billion against assets of Rs. 209.9 billion, the airline reported negative equity of Rs. 351.5 billion at end-June. “This is particularly significant given the Company’s existing debt burden and the continuing requirement for Government support to ensure uninterrupted operations,” the Ministry said.
That support continued in the first half. The Government serviced instalments on selected BoC and People’s Bank loans to the airline, released $ 30 million for short-term funding needs and absorbed $ 126.5 million in restructured guaranteed Bonds into the Government debt stock from 20 March, 2026. In June, the Cabinet approved a Strategy and Restructuring Committee to undertake a comprehensive review of the airline.
In the power sector, the Ceylon Electricity Board’s (CEB) functions passed to six wholly government-owned successor companies from 9 March, 2026 under the Sri Lanka Electricity Act. The Public Utilities Commission of Sri Lanka (PUCSL) approved an average 10.3% tariff increase in April and a further 18% increase in May for selected categories, including domestic consumers using more than 180 units a month and all Government entities, while the Rs. 15 billion NSO subsidy supported the remaining categories, about 95% of consumers. Electricity sales revenue rose 20% to Rs. 231.2 billion as demand grew about 7% to 9,304 GWh and average revenue per unit rose to Rs. 31.9 per kWh from Rs. 24.6. Hydropower generation fell about 23%, and despite a 57% rise in rooftop solar, thermal fuel generation increased about 88% to meet demand. The Treasury also provided Rs. 8 billion in equity to fund a Voluntary Retirement Scheme for CEB employees who did not move to the successor companies.
Sri Lanka Ports Authority (SLPA) lifted profit 19% to Rs. 29.1 billion, helped by a 9% rise in operational revenue to Rs. 44.1 billion and a foreign exchange gain of Rs. 2.7 billion, although containerised cargo fell 6% to 1.2 million TEUs. “The decline in containerized cargo volumes and the changing global shipping environment remain areas requiring close monitoring to sustain the Authority’s financial performance,” the report said.
Airport and Aviation Services (Sri Lanka) (Private) Limited (AASL) more than doubled PBT to Rs. 24.9 billion from Rs. 11.2 billion, on a 17% rise in non-aeronautical revenue to Rs. 23.4 billion and an exchange gain of Rs. 5.6 billion against a loss of Rs. 4.3 billion a year earlier, as aircraft diversions to Sri Lanka offset flight cancellations, including 115 at Bandaranaike International Airport in a single day. “The continuing uncertainty in the Middle East, particularly its potential impact on flight connectivity and passenger movements, warrants close monitoring given the importance of Middle Eastern routes to Sri Lanka’s aviation and tourism sectors,” the Ministry said.
Elsewhere, the National Water Supply and Drainage Board’s net profit fell 8.5% to Rs. 16.2 billion as higher pumping costs lifted cost of sales about 10%, while non-revenue water edged up to 24.4%. Sri Lanka Insurance Corporation Limited raised PBT 10.3% to Rs. 2.6 billion.
On restructuring, a dedicated SOE restructuring unit set up under the Ministry in March 2026 is liquidating 33 selected SOEs, while the Treasury had settled Rs. 2.8 billion of the Rs. 5 billion allocated in the 2026 Budget for long-outstanding Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF) and gratuity liabilities of selected SOEs by end-August.
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