Kópavogur posts 222 million krona operating loss

Kópavogur municipality reported an operating loss of 222 million Icelandic krónur for the first six months of 2026, mbl.is reported. The result was 263 million krónur better than the budgeted loss of 485 million.

The municipality said the negative result was caused by increased inflation. At the turn of the year, 84.5 percent of Kópavogur’s debt was inflation-linked, meaning it moves in line with inflation.

Kópavogur’s interim accounts for the period from January 1 to June 30 were presented to the municipal council’s executive committee on Thursday.

Consolidated loss of 112 million krónur

The consolidated result for Kópavogur, including its A and B sections, was 306 million krónur better than budgeted. However, the consolidated result was negative by 112 million krónur during the first six months of the year, mainly because financial expenses exceeded forecasts as a result of higher inflation. The budget had projected a consolidated operating loss of 418 million krónur.

The municipality said its total debt and liabilities decreased in real terms during the first six months of the year. The negative operating result was therefore attributed to calculated financial items rather than the operation of the municipality’s basic services.

Funds from operations amounted to 2.5 billion krónur during the period, while cash from operations amounted to 1.1 billion. The consolidated operating surplus was 3.8 billion krónur, or 12.1 percent of operating revenue before pension liabilities, and 3 billion krónur, or 9.7 percent of operating revenue, after pension liabilities were taken into account.

The municipality said these figures provide an important indication of the strength of its operations and their ability to support investment, debt repayments and future development.

Basic operations remain strong

Ásdís Kristjánsdóttir, mayor of Kópavogur, said the accounts showed that the municipality’s basic operations remained strong despite challenging external conditions, including rising interest rates and persistent inflation.

Excluding financial items, the operation of the municipality’s basic services during the first six months of the year was considerably better than forecast, she said.

“Kópavogur’s strong position is the result of targeted prioritisation, efficiency measures and responsible decisions in the municipality’s operations. Funds from operations are a key measure for municipalities and amounted to 2.5 billion krónur during the period. This shows that operations continue to create significant scope for investment, debt repayment and further development in the town,” Kristjánsdóttir said in the statement.

She added that increased inflation and higher interest rates had a substantial effect on calculated financial items and therefore on the period’s operating result. Operations in 2024 and 2025 had produced some of the strongest results in 18 years, she said, and the 2026 interim accounts indicated that performance would remain historically strong.

Kristjánsdóttir said inflation and high interest rates had reduced households’ disposable income in many parts of the country. Kópavogur had therefore placed strong emphasis on protecting residents’ interests and ensuring stability in household finances. Property taxes had fallen in real terms in recent years and were the lowest in the capital area, she said.