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The result was confirmed in Dunedin Venues Management Ltd's first annual report, for the year ending June 30, 2011, to be presented to councillors at the next full council meeting on Monday.
The report covers the period the company was in start-up mode, before the stadium's opening on August 5 this year, meaning DVML was accruing costs while unable to earn revenue.
It did not include the four Rugby World Cup matches held at the stadium, which fell outside the reporting period but were expected to result in a further loss of $400,000 for DVML.
Mr Davies said when contacted the $3.2 million loss - covered by a Dunedin City Council shareholder advance - was "broadly in line" with forecasts, but he was realistic about the challenge ahead.
"The business plan for this is always going to be tight, and I know the entire city is going to be looking over my shoulder.
"I've got my feet firmly on the ground. We know it's tough and we've got to work very hard to get to where we need to be."
Budget projections released in June as part of DVML's statement of intent forecast profits for DVML for the first three years ranging from $91,660 next year to just $30,567 in 2013.
The company's annual report identified employee expenses as the main driver behind the loss, totalling $446,293 in 2010 but growing to just over $1.3 million in 2011, while directors fees rose from $66,760 last year to $88,000 this year.
Interest and bookings since the venue was returned to DVML's operation earlier this month were encouraging, and the company had managed to control Rugby World Cup costs "pretty well", meaning the expected RWC loss could yet be reduced, Mr Davies said.
Dunedin Mayor Dave Cull also accepted the $3.2 million loss was inevitable, given "they didn't have a stadium to make a profit out of".
"Any business that's setting up is naturally going to be capital-hungry in the first year or so.
"The beauty of a report like this is that it puts it all out, transparently and publicly, that that's what the figures look like."
DVML chairman Sir John Hansen, in his director's report, noted the company's success in raising more than $40 million from seating and other product sales, and recruiting workers capable of turning the stadium into "one of the major entertainment venues in New Zealand".
The next year promised to be "very busy" - with a range of conferences and seminars, sports and concerts booked - but financial targets remained "very challenging", he said.
That included paying rent of $3.15 million a year to Dunedin Venues Ltd, the company that owned the stadium and its debt.
The rent would cover the cost of loans taken out by the council to bridge a gap in private sector fundraising, which raised funds for stadium construction paid in annual instalments for up to 10 years, council finance and corporate support general manager Athol Stephens said.
The council's advance to DVML totalled $3.251 million, and came from rates, transferred funds from the Carisbrook Stadium Trust budget, a subvention receipt from Aurora Energy and a one-off dividend from Dunedin City Holdings Ltd, he said.
That funding had been available as required, but had ceased now DVML was generating revenue, he said.
"They're earning income now. They can stand on their own two feet."