Omnibus prik

AU turns DKK 292 million deficit into DKK 262 million surplus

Following a deficit of DKK 292 million in 2022, Aarhus University has recovered its financial health and came out of 2023 with a surplus of DKK 262 million. According to the university director, this puts AU in a good position to face the Master’s reform and enrolment caps over the next few years.

The large budget surplus in 2023 was largely down to AU’s investments yielding good returns. Photo: Roar Lava Paaske

After a worrying deficit of DKK 292 million in 2022, Aarhus University’s finances have bounced back, and the university came out of 2023 with a healthy surplus of DKK 262 million. These figures are outlined in the university’s financial statement, which was presented last week.

The result is far better than anybody expected going into 2023. AU originally budgeted for a surplus of DKK 10 million, but this was adjusted upward to DKK 116 million towards the end of the year. The positive result is divided into a DKK 76 million surplus in operations – research funding, salaries, rent, energy consumption and so on – and a DKK 187 million surplus in financial items resulting from AU’s investments in shares and bonds.

The university was able to achieve a surplus in operations because energy prices and inflation rates developed more positively than anticipated, and also because the university went into 2023 showing financial restraint following a large deficit the year before. In addition, the university was able to utilise more external research funding than expected. In December, AU budgeted with a return of 83 per cent on its financial items, but the markets developed more favourably than expected.

University Director Kristian Thorn describes the annual result as “really good news”. Good news because the university has turned its deficit into a surplus and restored the financial reserves it was forced to draw on in 2022. To meet its fiscal targets, AU’s financial reserves must equate to at least 10 per cent of its revenue, and now they amount to 11.6 per cent. With this financial cushion, AU is now well placed to face the effects of the Master’s reform and caps on enrolments, which at this point remain unknown.

“In 2022, we lost a lot on the university’s mandatory investments, and this ate into our financial reserves. Now we’re putting almost the same amount back. So we’ve regained a sound financial position. If we hit any more bumps in the road, which we may well do during the Master’s reform, we can take them as they come,” says Kristian Thorn, who continues:

“With our result for 2023, we have exceeded our financial reserves target. This is very positive, because our budgets don’t yet account for the effect of the Master’s reform. The political parties behind the reform have just announced a political agreement on enrolment caps at Danish universities, but we don’t yet know how these caps will affect universities financially. As part of the reform, we will also have to admit more international students and convert some of our Master’s degree programmes,” he says.

The political agreement on enrolment caps means that AU will have to cut its Bachelor’s student intake by 9.5 per cent compared with the university’s average intake between 2018 and 2022, which corresponds to 545 student places.


But just because AU ended the year with a large surplus, it doesn’t mean that we can start living the high life. The surplus will help ensure that the university can withstand the consequences of recent political decisions, and it will also help to fund the relocation costs associated with planned campus development, explains the university director.

“This is another reason why it makes sense to have the good buffer we have now – to set us up for the years ahead. Before we can say anything about our long-term financial situation, we need to know the full extent of the effects of the Master’s reform. But it’s clear that it’s better to go into the next few years in a strong financial position rather than being unable to meet our financial reserve targets,” says Kristian Thorn.


When Omnibus spoke to the university director in December last year, AU expected to achieve a DKK 31 million surplus in operations, which Kristian Thorn described as “extraordinary”. This surplus ended up at DKK 76 million, which is partly due to a number of external factors developing more favourably than anticipated. Over the next few years, the university is budgeting for a deficit in its operations, but Kristian Thorn emphasises that AU has a long-term target of balancing its operations budget.


“We have drawn up a long-term budget so that our finances can stay healthy without help from our financial items. In 2023, we managed to achieve a surplus in our operations, and this is partly because we budgeted sensibly for the year. We didn’t know what would happen with inflation, energy prices and loss of student FTE funding. But none of our fears materialised. All these things have gone in a positive direction, and that’s a key reason why we’ve done so well,” says Kristian Thorn.

Another reason is that AU has secured and utilised a lot more external research funding than anticipated. Kristian Thorn sees this as the most encouraging factor in AU’s financial statement.

“We’ve been able to draw on a lot more external research funding, and this boosts our revenue. We are continuing to secure more external grants, which now amount to almost DKK 2.8 billion. This is a record high level of externally funded research activity,” he says.


As he did last year, the university director explains that a surplus in operations does not signify that faculties have adjusted their units without reason, for example by laying off members of staff.

“The adjustments that faculties have made are not fully reflected in this year’s result. It was necessary to make these adjustments to balance income and expenses and to achieve financial stability in the long term within each faculty’s financial model,” says Kristian Thorn.

However, in hindsight, he admits that the university could have displayed less restraint than it did in 2023.

“When you look at all the figures and realise that energy prices, inflation and student FTE funding didn’t develop in the way we feared, you can see that the university was very cautious with its internal planning in 2023. And it could have been less cautious, we have to admit. But an operations surplus of DKK 76 million is not much in the context of a DKK 7.7 billion budget,” he says.

Do you think you were too restrained?

“We were very prudent, but I think this was a sensible appraoch given the risks we were facing. In retrospect, it’s very easy to say: The things we feared would happen didn’t happen, so ergo we were too cautious. When we were drawing up our budget, I didn’t want to take that financial risk. But again I must stress: This has nothing to do with the financial situation in individual units, where it was necessary to achieve a long-term structural balance.”


It’s important to think about the university’s long-term finances.

“The short-term effects of financial management are less important than having long-term financial stability and healthy balanced budgets in our units. We didn’t make adjustments in several units just to achieve a better result in 2023,” he says.

When asked how staff and students will benefit from the university’s better financial position, the university director points out that the surplus goes to AU’s financial reserves, which will ultimately benefit everybody.

“The university’s financial reserves belong to AU, and this money will end up benefitting the academic departments. If we’re able to save money on energy consumption or purchases, for example, we can spend more on teaching, research and collaboration in the coming years,” he says.


It’s clear that AU’s large budget surplus is largely due to the financial markets favouring the university’s investments. But a return of DKK 187 million is not something we’re likely to see again. AU has introduced a new, more conservative investment policy, which was decided by the AU Board. In 2024, the university expects to achieve a return of DKK 75 million, which will gradually decrease over subsequent years.

“Going forward, we will take a more conservative appraoch to investment. So we won’t see a repeat of the DKK 187 million return we achieved in 2023. On the other hand, it’s much more likely that we’ll achieve a return and less likely that we’ll incur a loss,” says Kristian Thorn.

The new investment policy was introduced at the end of 2023, which was lucky timing for AU – because bond prices rose in connection with interest rate cuts and shares increased in value.

“When we sold our investments, we did so at very good prices. It was really good timing. If we’d sold them after 2022, we’d have made a huge loss. By selling them at the end of 2023 we got lucky,” says Kristian Thorn.

Translated by Sarah Louise Jennings.