However, it is set to be a challenge for the university to continue returning surpluses as a number of construction projects, including earthquake strengthening, are due to begin in the next two years.
The unadjusted operating surplus for the year was $26.02 million, which was $9.22 million (54.9%) higher than the budget and $3.98 million (18.1%) greater than last year's surplus and the second highest on record. The highest surplus, $26.35 million, was recorded in 2007.
However, after removing the effects of unrealised gains and losses on shares held, actuarial accruals, carry forward changes, and other significant one-off items, the adjusted surplus was $18.144 million, which was significantly lower than in previous years.
In a report to this week's university council meeting, financial services director Grant McKenzie described its financial position as "solid" but added that it was a "key issue" for the university that the adjusted figure was down on that of previous years.
The university finished the year with a record $62.98 million in cash on hand, which was 9.15% up on 2010.
The level of cash on hand was largely due to continued delays to capital expenditure projects, including the redevelopment of the former "Gardies" bar into the Marsh Study Centre.
Demand for cash was expected to increase substantially in the next two years, as approved projects from the priority development plan moved from design to construction, Mr McKenzie said.
The university's construction programme also included strengthening of buildings deemed earthquake-prone.
The challenge for the university was to maintain surpluses while carrying out these projects, which would not be easy in an environment of "severe government fiscal constraint", he said.