University of Helsinki reports operating result €9 million in deficit in 2022
In 2022 the University of Helsinki’s operating result or the result without taking investment activities and fundraising into account was €9 million in deficit. Energy costs increased by €9 million from the previous year to a total of almost €20 million. Electricity costs rose by over 160% and heating costs by almost 30%.
“The rise in energy costs and salaries, as well as the impact of high inflation on prices, have increased the University’s expenses. The university index will only remedy the situation from 2024 onwards. We expect our result to fall close to €20 million in the red in 2023,” says Chief Financial Officer Marjo Berglund.
Inflation has continued at a high rate also this year, which the university index will remedy only in 2025. Consequently, the profit forecast for 2024 is also close to €20 million in deficit.
The operating deficit for 2010–2022 totals €10 million. The operating result excludes income from investments and fundraising.
The loss from fundraising, investment and financial activities was €43 million, driving the University’s overall result of €52 million into the red. The return on investment and financial activities included €72 million in changes in the value of investment instruments. Investments are recorded in the financial statements at market value in accordance with the code of financial management at higher education institutions by the Ministry of Education and Culture.
Record amount of external funding
Core funding increased from 2021 by a little under €8 million. For external funding, 2022 was a record-breaking year, as the funding amounted to €320 million, thus crossing the €300-million mark for the first time. External funding included €3.4 million of investment aid.
Research funding accounted for €239 million of external funding, of which €123 million was received from the Academy of Finland. Funding from the Academy increased by €7 million from the year before, largely as a result of success in the 2020 funding calls, where the Academy awarded a record amount of funding. The increase in Academy of Finland funding related to the supplementary government budgets and the EU’s Recovery and Resilience Facility funding.
At the end of December 2022, the number of staff was 8,383. Teaching and research staff comprised 4,862 employees. Staff costs constituted almost two-thirds of the overall expenses. Another considerable expense are the facilities required for studying, research and other activities.
University of Helsinki investment activities generate a loss of over 15%
Developments in the international capital market made the return on the University of Helsinki’s securities investments -15.67% in 2022. The market value of securities investments dropped by €109 million.
Under the current investment strategy, from 2019 to 2022, the University’s securities investments have generated an average return of 11.14% per year, clearly exceeding the long-term real return target of 4%.
The University adheres to an investment strategy based on financial economics and the promotion of sustainable development. For example, excluding fossil fuel–producing businesses helped to reduce the TCFD (Task Force on Climate-Related Financial Disclosures) carbon footprint of equity investments to roughly half of that of the benchmark index.