Dunedin City Holdings - which includes electricity, forestry, infrastructure and tourism businesses - lost $5.1 million in the past financial year, partly because it wrote off assets worth $12 million.
The group, which made a profit of $16 million in the previous financial year, has never before made a loss since its formation in 1993.
Despite the loss, the companies paid the council $23 million in dividends and cash.
The chairperson of the Dunedin City Holdings board, Denham Shale, says the result should be a one-off because the economy has stabilised.
In the past financial year, he says, "The economy's been slow, the export log prices have been poor; we've had a year when our subsidiaries have chosen to write down the value of assets for the purposes of impairment."