Hafnarfjörður's financial position is sound – A good year in operations behind us

Annual Report of the Municipality of Hafnarfjörður 2024

The annual accounts of the Municipality of Hafnarfjörður for the year 2024 were presented to the town council today, 10 April 2025. The operating surplus for Sections A and B amounted to 1,208 million króna in 2024, compared to 808 million the previous year. The operating result before depreciation amounted to 3,545 million króna. The surplus from the operation of Section A was 117 million króna in 2024, compared to 251 million króna the previous year. Operating cash flow from Sections A and B amounted to 3,734 million króna, 975 million króna over budget. Operating cash flow from operations amounted to 7.61% of total revenues, compared to 5.61% in the previous year. The debt ratio for the Hafnarfjörður municipality group stood at 901% at the end of 2024.

The town's financial position is strong

,The core operations of the City of Hafnarfjörður performed very well last year, despite a somewhat smaller increase in population than had been anticipated and slower development, partly due to high interest rates. Furthermore, the city's financial position is strong. Operating cash flow was significantly above projections, which strengthens the municipality's ability to meet its capital expenditure and financial commitments. Infrastructure investment was significantly increased, which will result in an even more robust service and an improved quality of life for residents. Hafnarfjörður is now benefiting from a significant increase in residential and commercial development in recent years, which will strengthen the municipality's revenue streams for the future.“ says Valdimar Víðisson, the mayor.

Operating revenue from Parts A and B amounted to 49.3 billion króna in 2024, an increase of 2 billion króna year-on-year. Of this, revenue from payroll tax and property tax increased by 2.4 billion króna. As a proportion of total revenues, income tax accounted for 51.41% and property taxes for 9.11%. Operating expenses were 43.9 billion króna, an increase of 1.9 billion króna year-on-year. Of this, salaries and related expenses amounted to 24.1 billion krónur, an increase of 1.9 billion krónur year-on-year. The share of salaries and related expenses as a proportion of the total revenue of the City of Hafnarfjörður was approximately 48.9%.

Positive operating result for Parts A and B

Interest expenses exceeded interest income by 2,337 million króna, which is 503 million króna less than the previous year. The interest cost was about 180 million króna below the forecast, mainly due to lower inflation than had been assumed in the year's budget.

The operating result for Sectors A and B was a surplus of approximately ISK 1,208 million, which is about ISK 658 million below forecast. In this regard, it should be noted that revenues from the sale of building rights were approximately ISK 2,027 million below what had been forecast for the year.

Hafnarfjörður's debt ratio increased from 821% to 901% at the end of the year and is significantly below the 1501% debt ratio required by the regulations on financial criteria and supervision of local authorities' finances. The debt ratio increased from 1,291% to 1,331%.

17% increase in investment

Investments in 2024 amounted to 8.3 billion króna, a 171% increase year-on-year. Total assets at the end of the year amounted to 101.0 billion króna, an increase of 7.0 billion over the year. The municipality's total debts and liabilities amounted to 65.7 billion krónur, an increase of 4.6 billion krónur. In Hafnarfjörður, pension liabilities account for around 271% of the municipality's total debt and liabilities, which is a considerably higher proportion than in neighbouring municipalities.

Shareholders' equity amounted to 35.3 billion krónur at year-end, an increase of 2.5 billion krónur during the year. The equity ratio is 34.91%, unchanged from the previous year.

The population of Hafnarfjörður was 31,525 on 1 January 2025, an increase of 909 inhabitants.