Financial Statements: positive operating result, but the challenge of debt remains

The City Council has approved the 2025 Financial Statements of the City of Lugano, which close with an operating surplus of 23.7 million francs, and an overall negative result of 28.1 million francs; both figures are in clear improvement compared to the budget.

The 2025 financial statements of the City of Lugano close with a significant improvement in the operating result compared to the budget (+47.7 million), attributable to the cost-saving measures implemented by the City Council and to the significant contribution of extraordinary items, partly non-recurring, among revenues.

In summary, the most significant figures for the 2025 financial year show:

• a total operating result (current operating surplus) of 23.7 million, compared with a deficit of -24.0 million, with an improvement of 47.7 million;
• confirmation in the financial statements of the budgeted tax revenue of 258.0 million: 209.0 million for individuals and 49.0 million for legal entities;
• total actual expenses (operating, financial and extraordinary expenses) amounting to 487.4 million compared with the budgeted 494.2 million, with savings of 6.8 million equal to 1.4%;
• total revenues (operating, financial and extraordinary revenues) amounting to 511.1 million (budget: 470.2 million), with an improvement of 40.9 million equal to 8.7%.

The improvement in the total operating result of 47.7 million compared to the budget is mainly due to the following factors:

• 23.3 million deriving from exceptional tax accruals, exceeding the 40.0 million budgeted: 13.5 million relating to individuals and 9.8 million to legal entities; for the latter, the increase is due in particular to the trading sector, which in the fiscal years 2022, 2023 and 2024 recorded exceptional countercyclical profits, in the context of geopolitical instability, in line with what has been observed at federal level, with the accruals of the same sector in the Canton of Geneva;
• 6.3 million due to supplementary taxes, withholding taxes and special taxes;
• 10.8 million due to the revaluation, in accordance with MCA2 provisions, of the plots of the former Castagneto nursing home, following the transfer from administrative assets to financial assets;
• lower personnel expenses amounting to 6.1 million;
• lower expenses for goods and services and other operating expenses amounting to 5.8 million, partially offset by the recognition of a prudent allowance for doubtful accounts of 4.2 million, permitted under the MCA2 accounting model.

As at 31 December 2025, the City’s financial debt amounts to CHF 1,049.9 million, down from CHF 1,090.6 million recorded as at 31 December 2024. Over the same period, cash and term deposits decrease from CHF 201.8 million to CHF 141.0 million. The ratio between gross debt and revenues, a benchmark indicator in the assessment of the City’s rating, decreases from 220% as at 31 December 2024 to 204% as at 31 December 2025, in line with the assumptions underlying the Financial Plan 2026-2033, which indicated a ratio of 203% at year-end 2025.

The average cost of debt remained substantially stable at 0.979%.

Net investments in administrative assets amount to 74.1 million, lower than the budgeted 82.9 million. The most significant variations include the non-execution of the disposal of the Castagneto for 14.8 million, which has not yet taken place. Lower expenditure was also recorded for the acquisition of the RSI area, as in 2025 only an advance payment of 10.0 million was made instead of the full amount of 21.0 million initially planned.

Compared with budget expectations, self-financing records an increase of 46.0 million and its ratio stands at 62.1%, compared with the 0.04% provided for in the budget.

The overall result, amounting to -28.1 million, while showing a significant improvement of 54.8 million, remains far from break-even and confirms the trend towards increasing debt recorded in recent years. Public debt therefore remains a matter of primary concern for the City.

Equity amounts to 210.1 million, compared with 186.1 million as at 31.12.2024 (+12.9%).

The City Council confirms its intention to continue, supported by external experts, in defining appropriate consolidation measures, in particular with regard to the overall result, in order to reduce indebtedness towards third parties over the coming years and to prepare for the financial consequences of the projects recently approved by popular vote.