London - Premier League giants Chelsea announced on Tuesday a total loss of £67.7 million for the financial year ending June 30, 2011.
But for Chelsea, bankrolled by Russian billionaire Roman Abramovich, this represented a reduction on a previous operating loss of £70.9 million as the London club tried to comply with UEFA's new financial fair play rules.
Failure to fall in line with the European football governing body's regulations, designed to ensure a more level playing field for the continent's leading clubs, could see sides barred from lucrative tournaments such as the Champions League.
Transfer fees were a major factor in the loss but Chelsea were able to declare a record group turnover of £222.3 million.
This was an improvement on last year's £205.8 million, with increased revenues from the Champions League and a rise in the Stamford Bridge side's income from the central Premier League television contract boosting turnover.
"The club is focused on complying with the requirements of UEFA's financial fair play regulations while maintaining its ability to challenge for major trophies," Chelsea chairman Bruce Buck told the club's website on Tuesday.
"We would expect this to be reflected in our results for the current financial year."
Chelsea chief executive Ron Gourlay added: "Achieving a record level of turnover is satisfying given the economic background against which we are operating."
The Blues are currently fourth in the Premier League, 13 points behind leaders Manchester City, and find themselves in the unusual position of not being the best-placed top-flight club in London, with Tottenham Hotspur five points in front of them in third position.
However, Chelsea are through to the last 16 of the FA Cup, where they will face second-tier Birmingham.
Their next match sees Chelsea travel to Wales for a Premier League fixture away to Swansea later on Tuesday.