Celtic lost £11.5m last year after a fall in revenue of almost £10m, the club revealed in their annual results.
Chairman Iain Bankier says a drop in the value of player sales, as well as the lack of fans amid Covid-19, were the key factors.
He pointed out that the return of supporters this season means “conditions have improved markedly”.
Bankier says the club “measured confidence” about this campaign on and off the pitch.
Celtic finished last season without a trophy for the first time in 11 years as manager Neil Lennon departed in February after the bid to secure a 10th straight league title faltered.
Current boss Ange Postecoglou was appointed in June and chief executive Dominic McKay began in July, before stepping down this month for personal reasons.
Celtic made £9.4m from the sales of Jeremie Frimpong, Jack Hendry, and Patryk Klimala, a total that was down from £24.2m last year following Kieran Tierney’s move to Arsenal.
The sales of Kristoffer Ajer to Brentford and Odsonne Edouard to Crystal Palace will be included in next year’s accounts, with Bankier adding they “demonstrate our core strength of being able to transform young talented players into seasoned professional footballers”.
The club spent £13.5m on player recruitment – a drop of £7m – as overall revenue to the end of June fell from £70.2m to £60.8m.
As a result, the Glasgow club cut costs from £80.5m to £74.4m.
“In the face of this adverse swing in financial performance, we are satisfied that we took sufficient and appropriate steps to mitigate the losses and control costs in the business,” Bankier added.
“The entire season was characterised by the absence of supporters in football stadiums and the huge disruption to our operations.
“On behalf of the board and everyone at the club, I thank the Celtic support for their backing and understanding last season whilst also sharing their frustration and disappointment.”
