Solid financial position in a major year of investment
The annual report of the City of Hafnarfjörður for the year 2025 was presented to the town council today, 16 April 2026. „The year 2025 was a year of significant development for the City of Hafnarfjörður, and this is reflected in the annual report,“ says Valdimar Víðisson, the mayor.
Annual Report of the Municipality of Hafnarfjörður 2025
The annual accounts of the Municipality of Hafnarfjörður for the year 2025 were presented to the town council today, 16 April 2026. The operating surplus for Sections A and B amounted to 50 million krónur in 2025, compared to 1,208 million the previous year. The operating result before capital items amounted to 2,395 million krónur.
The operating result for Section A was a negative 1,165 million króna in 2025, whereas the previous year it was a profit of 107 million króna. Operating cash flow for Sections A and B amounted to 2,761 million króna, 147 million króna below forecast. Operating cash flow from operations amounted to 5.11% of total revenue, compared to 7.61% in the previous year. The debt ratio for the Hafnarfjörður municipality group stood at 971% at the end of 2025.
„The year 2025 was a year of significant development for the City of Hafnarfjörður, and this is reflected in the annual accounts.“ says Valdimar Víðisson, the mayor. „Investment in capital projects increased by 331% year-on-year, resulting in an improved quality of life and more robust services for residents. Among other things, the town commissioned three major sports facilities last year, in addition to other infrastructure developments across the town. Interest expense increased slightly from the previous year, but the increase in pension liabilities amounted to 3 billion króna, compared to 1 billion króna in 2024. Had this increase not occurred, the A-section of the municipal budget would have generated a surplus. Furthermore, the City of Hafnarfjörður is significantly affected by the rise in wages, as are other municipalities. The annual report reflects the sound management and financial strength of the City of Hafnarfjörður, which has been steadily built up in recent years.“
Key figures from the annual accounts
Operating revenue from Parts A and B amounted to 54.4 billion króna in 2025, an increase of 5.1 billion króna year-on-year. Of this, revenue from payroll tax and property taxes increased by 3.2 billion króna. As a proportion of total revenues, income tax accounted for 51.51% and property taxes for 9.01%. Operating expenses were 49.9 billion króna, an increase of 6.0 billion króna year-on-year. Of this, salaries and related costs amounted to 26.3 billion krónur, an increase of 2.2 billion krónur year-on-year. The share of salaries and related costs as a proportion of the City of Hafnarfjörður's total revenues was approximately 48.3%.
Interest expenses exceeded interest income by 2,346 million króna, which is 8.5 million króna more than the previous year. Interest expense was almost in line with the budget, or about 74 million króna over budget.
The operating result for A and B sections was a surplus of 50 million króna, which is approximately 1,035 million króna below forecast. In this regard, it should be noted that revenue from the sale of building rights was approximately 2,287 million króna below what had been forecast for the year, while the change in pension liabilities was 1,473 million króna over forecast.
Hafnarfjörður's debt ratio increased from 901% to 971% 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 fell from 133% to 130%.
Significant investments during the year
Investments in the year 2025 amounted to 10.5 billion króna, an increase of 26.51% year-on-year. Total assets at the end of the year amounted to 108.7 billion króna, an increase of 7.7 billion over the year. The municipality's total debt and liabilities amounted to 70.7 billion króna, an increase of 5.0 billion króna. 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 379.49 billion krónur at year-end, an increase of 2.7 billion krónur over the year. The equity ratio is 34.91%, unchanged from the previous year.
The population of Hafnarfjörður was 32,398 on 1 January 2026, an increase of 873 residents in 2025. Over the past four years, the population of Hafnarfjörður has increased by 3,351 residents.