Strong financial position in a year of major investments

The Annual Financial Statement of the Municipality of Hafnarfjörður for the year 2025 was presented to the City Executive Council today, 16 April 2026. The operating surplus for Parts A and B amounted to 50 million ISK in 2025, compared with 1,208 million ISK the previous year. The operating result before financial items amounted to 2,395 million ISK.

The operating result of Part A was negative by 1,165 million ISK in 2025, whereas the previous year showed a profit of 107 million ISK. Cash flow from operations for Parts A and B amounted to 2,761 million ISK and was 147 million ISK below budget. Cash flow from operations corresponded to 5.1% of total revenues, compared with 7.6% of total revenues the year before. The consolidated debt ratio of the Municipality of Hafnarfjörður was 97% at the end of 2025.

“The year 2025 was a year of major development for the Municipality of Hafnarfjörður, which is clearly reflected in the annual financial statement,” says Valdimar Víðisson, Mayor of Hafnarfjörður. “Investments in Part A increased by 33% year on year, contributing to improved quality of life and stronger services for residents. Among other things, the municipality brought three major sports facilities into operation last year, along with other infrastructure development throughout the town. Financing costs increased only slightly from the previous year, but pension liabilities increased by 3 billion ISK compared with 1 billion ISK in 2024. Had this increase not occurred, operations of the Part A municipal fund would have shown a surplus. In addition, Hafnarfjörður has felt the impact of wage increases, as have other municipalities. The annual financial statement reflects solid operations and economic strength, built steadily over recent years.”

Key figures from the annual financial statement

Operating revenues for Parts A and B amounted to 54.4 billion ISK in 2025 and increased by 5.1 billion ISK year on year. Of this, revenues from municipal income tax and property taxes increased by 3.2 billion ISK. As a share of total revenues, municipal income tax amounted to 51.5% and property taxes to 9.0%. Operating expenses were 49.9 billion ISK and increased by 6.0 billion ISK year on year. Of this, wages and related expenses amounted to 26.3 billion ISK, increasing by 2.2 billion ISK year on year. Wages and related expenses as a proportion of total revenues were approximately 48.3%.

Net financial expenses exceeded financial income by 2,346 million ISK, which is 8.5 million ISK more than the previous year. Financing costs were almost in line with budget, approximately 74 million ISK above forecast.

The operating result for Parts A and B was positive by 50 million ISK, which is about 1,035 million ISK below budget. In this context, it should be noted that revenues from the sale of development rights were approximately 2,287 million ISK below budget, and changes in pension obligations were 1,473 million ISK above budget.

The debt ratio of the Municipality of Hafnarfjörður increased from 90% to 97% at year‑end and remains well below the 150% limit set by regulations on financial criteria and oversight of municipal finances. The debt‑to‑revenue ratio declined from 133% to 130%.

Major investments during the year

Investments in 2025 amounted to 10.5 billion ISK, representing a 26.5% increase compared with the previous year. Total assets at year‑end amounted to 108.7 billion ISK, increasing by 7.7 billion ISK during the year. Total liabilities and commitments of the municipality amounted to 70.7 billion ISK, increasing by 5.0 billion ISK. Pension obligations account for approximately 27% of the municipality’s total liabilities and commitments, which is a somewhat higher proportion than in neighbouring municipalities.

Equity amounted to 37.949 billion ISK at year‑end and increased by 2.7 billion ISK during the year. The equity ratio was 34.9%, unchanged from the previous year.

The population of Hafnarfjörður was 32,398 on 1 January 2026, an increase of 873 residents during 2025. Over the past four years, the population of Hafnarfjörður has grown by 3,351 residents.