Loss for Reykjavík Concert Hall, Akureyri Boasts Surplus Skip to content

Loss for Reykjavík Concert Hall, Akureyri Boasts Surplus

The operation of the concert and conference center Harpa in Reykjavík, which opened in May 2011, is expected to suffer a loss of ISK 407 million in 2012 under the current arrangement, as reported by the Ministry of Education and Culture in early August.


Harpa. Photo by Páll Kjartansson.

Auditing company KPMG concluded that the administration of the concert center is complicated because it is currently operated by eight private limited companies, each of which has an independent management, ruv.is reports.

A five-year plan will be presented in the autumn with the goal of making the operations sustainable. In the center’s first year of operation, 250,000 guests attended 367 concerts.

The reasons for the loss include higher real estate tariffs than anticipated, more expensive operations of the building and lower income from conferences, catering and parking.

The disposable capital of Portus, the holding company of Harpa, will only last until mid-2013 if the operation continues in the same way, according to Portus chair Pétur J. Eiríksson.

Pétur told Fréttablaðið that part of the deficit can be explained with higher real estate tariffs, ISK 380 million (USD 3.2 million, EUR 2.6 million) instead of ISK 180 million, which is paid to one of Harpa’s two owners, the City of Reykjavík.

“We have paid the real estate tariffs for a whole year and haven’t sought help from the owners and won’t have to this year,” Pétur said. “But if this continues, we can fund our operations until mid-next year, not much longer.”

The Icelandic state and City of Reykjavík granted a loan to Austurhöfn-TR, a private company founded by the state and city to complete the construction of Harpa and launch the center’s operations, of ISK 730 million (USD 6.1 million, EUR 4.9 million) in November 2011 to be repaid in 12 months.

A bond offer delivered ISK 19.3 billion (USD 161 million, EUR 130 million) to Austurhöfn-TR earlier this year.

Increased need for funds has been clear at least since April 2010. Portus and Austurhöfn suggest that the capital stock be increased by ISK 580 million, part of which would come from Austurhöfn-TR in the form of equipment. The contribution of the owners would be ISK 505 million.

Meanwhile, More than 300,000 guests have visited the culture center Hof in Akureyri, North Iceland, since it opened in the autumn of 2010. After the past year in operation, the center’s management reported ISK 1.5 million (USD 12,500, EUR 10,100) in operation profit.

“Our operation plan was pretty detailed and comprehensive and everything simply worked out,” managing director of Hof Ingibjörg Ösp Stefánsdóttir told Morgunblaðið of the results, praising her staff’s effort and thanking the public for their interest in cultural events organized by Hof.

“There was a higher turnout than we had anticipated, both among visitors and event organizers, and that had a significant impact,” Ingibjörg pointed out.

Hof’s management has decided that the operation profit will go to the municipality Akureyrarbær. “We are proud that the operation is in profit and find it right to give it back to the municipality,” Ingibjörg said.

“At the same time we encourage local authorities to make sure that the funds will be used to create new artistic events in the area,” she added.


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