The financial result of the Kotka City Group for the fiscal year is balanced

25.3.2025 | The City of Kotka’s financial result for last year showed a surplus of just over €0.6 million. The entire city group, which also includes the city’s subsidiaries, recorded a surplus of €4.4 million.

At the end of the 2024 fiscal year, the cumulative surplus in the parent city’s balance sheet stood at €44.7 million, while the entire city group had a balance sheet surplus of €117.6 million.

When the city’s 2024 budget was initially approved, the result was expected to show a deficit of approximately €13.4 million. However, as it turned into a €0.6 million surplus, Kotka’s Mayor Esa Sirviö and Chief Financial Officer Pietu Mänttäri are naturally pleased.

According to Mänttäri, one of the key reasons for this positive turnaround was a significant increase in tax revenues compared to the budget.
“Tax revenue accumulation exceeded expectations, especially at the end of the year, surpassing the budget by about €4 million,” says Mänttäri.

Overall, Mänttäri considers the result a broad success, crediting all the city’s responsibility areas.
“The city’s operating expenses were significantly lower than budgeted, and budget management is now on a solid track. Additionally, a few one-time operating revenues contributed to the surplus,” Mänttäri notes.

However, Mänttäri also highlights financing costs as a negative aspect of the financial statement, mentioning a negative adjustment entry and increased investment pressures, which have weakened future outlooks.

Mayor Sirviö also praises all the city’s responsibility areas for their sound financial management.

“We have pursued a determined yet responsible approach to balancing the economy in recent years. Finding a financially stable position has been challenging, mainly due to external factors beyond the city’s control. However, we have successfully addressed these challenges together,” Sirviö states.

“Across the board, responsibility areas and operational units have demonstrated exceptional financial responsibility and sound judgment in this current climate. We can say that we have broadly succeeded, both in terms of decision-makers and employees. Once again, I dare to say that shared vision and understanding in uncertain situations are rare assets in today’s municipal sector. As mayor, I cannot be anything but proud of our entire team,” Sirviö commends.

Sirviö emphasizes the importance of the city accumulating a €44.7 million surplus in the parent city’s balance sheet.
“This is a good buffer for the future, as we recognize the city’s investment pressures and its future earnings potential. The surplus in the balance sheet gives us time to take necessary actions without having to resort to hasty, panic-driven decisions. The operating margin for the last fiscal year on the city side alone was €18.1 million. Depreciation and impairments amounted to approximately €17.7 million, meaning the operating margin covered about 102.5% of depreciation. This allows us to state that last year was balanced. However, at this stage, it is also important to keep in mind the upcoming investment pressures,” the mayor notes.

The Kotka group remains in strong financial condition

Kotka Mayor Sirviö once again praises the entire city group.
“We are in the same general situation in the municipal sector, where municipalities are increasingly assessed from the perspective of the entire group. The Kotka municipal group is diverse and includes both subsidized and economically independent companies. When we look at the entire city group, the 2024 financial result shows that our group is also in a very strong condition. The city group’s surplus for the financial year 2024 was approximately 4.36 million euros in total. When this is added to the accumulated surplus in the group balance sheet, it amounts to approximately 117.6 million euros. This figure shows that the entire group has had successes for several years,” says Sirviö.

“Although the Kotka city group consists of various entities affected differently by global conditions, we can interpret the financial figures and results of the group entities as indicating that financial management and operations have largely proceeded as planned. The group management can and should be very satisfied with the operations of the entities,” says Sirviö.

Challenges ahead

However, Mayor Esa Sirviö also reminds that individual group entities face very different challenges and prospects in the near future.
“The group’s loan balance per capita was 10,038 euros at the end of the financial year, meaning the total debt of the group increased somewhat last year. As we know that the city itself will face financial challenges in the coming years, the entire group must be involved in addressing these challenges, and we must increasingly view the finances from a group-wide perspective. Group entities are also particularly important in terms of upcoming business projects, which is why the entire city group must work together to set sail in the right direction,” Sirviö states.