CITYCON OYJ STOCK EXCHANGE RELEASE 21 OCTOBER 2004 11.30
a.m.
PRELIMINARY INFORMATION OF IFRS COMPARATIVE FIGURES FOR THE THIRD
QUARTER OF
2004
In this bulletin, Citycon presents preliminary comparative
IFRS figures for the
first three quarters of 2004. In the bulletin issued on
31 August 2004, the
company presented the preliminary opening IFRS balance as
at 1 January 2004,
preliminary comparative figures for the first and second
quarters, and the major
impacts of the transition from FAS (Finnish
Accounting Standards) to IFRS
(International Financial Reporting
Standards).
Preliminary comparative figures for the entire financial year
will be issued by
Citycon in the annual financial statements 2004. The
segment information
required by IAS 14 will be given starting with the first
quarter of 2005.The
final reconciliation required by IFRS 1 (First-time
adoption of IFRS) will also
be presented in the interim report for the first
quarter of 2005 as Citycon
starts reporting according to IFRS for the first
time.
The comparative information has been prepared in accordance with the
latest
versions of IFRS. The 'notes' column refers to the additional
information
explained in the separate section. A summary of Citycon's most
significant
accounting principles is included in the end of this release.
Citycon will go over to reporting in accordance to IFRS in its interim
reports
and final accounts for 2005. The timetable for the transition has not
been
changed.
The figures are unaudited.
Key figures
Note FAS Q3 Preliminary FAS Preliminary
IFRS Q3 Q3 IFRS Q3
Cum. Cum.
Earnings per share, EUR
0.04 0.06 0.13 0.20
Earnings per share,
diluted,
EUR 0.04 0.06 0.12 0.20
Equity per
share, EUR 2.00 2.02 2.00 2.02
Return on
equity (ROE), % 8.9 11.9 8.5 13.8
Return on
investment (ROI), % 6.4 8.2 6.2 7.9
Equity ratio,
% g 38.1 29.3 38.1 29.3
Preliminary
IFRS Q3 2004 comparison
Income statement
EUR Million FAS Q3
Change Prel. FAS Change Prel.
Q3 IFRS Q3 Q3 IFRS
Q3 Cum. Cum. Q3
Cum.
Turnover 22.0
-0.9 21.1 66.1 -2.8 63.3
Other income 0.2
0 0.2 0.3 -0.1 0.2
Change in value of
investment
property, note a)
Expenses
Depreciation and
Impairments
1.9 -1.7 0.2 5.7 -5.5 0.2
Share of
associated
companies
profit, note b 0.1 -0.1 0
0.3 -0.3 0
Other expenses 7.2 -1.3 5.9
22.8 -2.2 20.6
Operating profit 13.0 2.1 15.2
37.5 5.1 42.7
Net financial expenses -6.8 0.2
-6.6 -19.7 0.2 -19.5
Profit before and taxes 6.2 2.4
8.6 17.8 5.3 23.2
Taxes, note d) -1.7
-3.3 -2.4 -5.0 -2.3
Profit 4.5
1.8 6.2 12.8 8.0 20,9
Earnings per share, EUR 0.04
0.02 0.06 0.13 0.07 0.20
Earnings per share,
diluted,
EUR 0.04 0.02 0.06 0.12 0.07
0.20
Preliminary IFRS Q3 2004 comparison
Balance sheet
EUR million
Note FAS Change Preliminary
30. Sept. 30. Sept.
2004 2004
Assets
Non-current
assets
Intangible assets 4.7 -4.3
0.3
Tangible assets 740.5 -739.4
1.1
Investment properties a 740.0
740.0
Investments
Holdings in associated companies b 55.3 -55.3
0
Treasury shares c 4.7 -4.7
0
Other investments 21.4 -21.2
0.2
Investments, total 81.4 -81.2
0.2
Deferred tax asset d
Non current assets, total
826.6 -84.9 741.6
Current assets
Short-term receivables
2.9 -0.4 2.4
Cash and cash equivalents
27.9 -0.6 27.3
Current assets, total
30.8 -1.0 29.8
Assets, total 857.3
-86.0 771.4
Liabilities and shareholders' equity
Equity
attributable to equity holders of the parent
Share capital
156.3 0 156.3
Share premium fund
35.1 -0.1 34.9
Treasury share fund c 4.7
-4.7 0
Treasury shares c 0 -4.7
-4.7
Fair value reserve e -10.9
-10.8
Other funds 6.6 0
6.6
Retained profits a,b,d 13.0 9.7
22.7
Profit 12.8 8.0
20.9
Capital loan f 68.5 -68.5
0
Shareholders' equity, total 296.9 -71.1
225.7
Minority interest 101.3 -101.3
0
Liabilities
Long term liabilities f 426.5 82.7
509.2
Deferred tax liability d 4.3
4.3
Long term liabilities, total 426.5 87.0
513.5
Short-term liabilities 32.8 -0.5
32.2
Short-term liabilities, total 32.8 -0.5
32.2
Liabilities, total 459.2 86.4
545.7
Liabilities and shareholders'
equity, total
857.3 -86.0 771.4
Preliminary statement of changes in
shareholders' equity
Attributable to equity holders of the parent
EUR million
Share Share Fair value Treasury Retained Total
capital premium reserve shares and profits equity
fund and capital
other loan
reserves
FAS
Balance
31 Dec.2003 142.8 34.8 73.1 27.3
278.0
IFRS Balance
1 Jan. 2004 142.8 34.8 -7.7
-4.7 36.9 202.2
Cash flow hedges -4.7
-4.7
Profit
8.4 8.4
Total recognised income
and expense
-4.7 8.4 8.4
Dividends
-14.3 - 14.3
IFRS Balance
31
Mar. 2004 142.8 34.8 -12.4 -4.7 31.0
191.5
Cash flow hedges 4.8
4.8
Profit 6.3
6.3
Total recognised
income and expense 4.8
6.3 11.1
IFRS Balance
30 June 2004 142.8 34.8
-7.6 -4.7 37.3 202.6
Cash flow hedges
-3.3 -3.3
Profit
6.2 6.2
Total recognised
income and
expense -3.3 6.2 3.0
Share
Offering 13.5 6.7
20.2
IFRS Balance
30 Sep. 2004 156.3 41.5 -10.9 -4.7
43.5 225.7
Cash flow statements
Cash flow statements are not
presented. as the differences between IFRS cash
flow statement and the cash
flow statement prepared according to Finnish
Accounting Standards are not
considered to be material.
The directed share offering and the comparative
IFRS information for it
Share Change Share
Share Change Share
offering offering
offering offering
excluded included
excluded included
FAS FAS
IFRS IFRS
Share capital,
EUR, million 142.8
13.5 156.3 142.8 13.5 156.3
Sharehoder's equity,
EUR,
million,
note h) 276.6 20.3 296.9 205.6 20.2
225.7
Total number of
shares, million 105.8 10.0 115.8
105.8 10.0 115.8
Details of the targeted share offering can be found
in the stock exchange
bulletins issued by Citycon in September 2004.
Notes
to the preliminary comparative financial information for Q3 in 2004
a)
Investment properties have been valued at fair value and the change in values
has been recorded in the income statement and the equity in the opening
balance.
b) Consolidation principles of mutual real estate companies have been
changed.
c) Own shares held by the parent company are not presented in assets.
but are
deducted from equity.
d) Deferred taxes have been recognised for all
temporary differences according
to IAS 12 Income Taxes.
e) The fair value of
cash flow hedging derivatives has been included in the
balance sheet and the
changes in the values in cash flow hedge reserve in
equity.
f) Capital loan
has been classified as a liability in the IFRS balance sheet.
g) The covenant
calculation used in the financial agreements will remain the
same.
h) The
transaction costs related to the acquisition of equity have been treated
as
a reduction in shareholders' equity with an adjustment for income
tax.
Summary of Citycon's most significant IFRS accounting principles
The
consolidated financial statements for 2005 of Citycon are to be prepared in
accordance with International Financial Reporting Standards (IFRS). The
comparative figures of 2004 are restated from previous applied Finnish
Accounting Standards (FAS) to IFRS.
Principles of consolidation
Mutual
real estate companies are consolidated by proportional consolidation,
where
Citycon's
share of assets. Liabilities, income and expenses of the company
is combined
line by line with similar items in the Citycon's financial
statements.
Investment properties
Investment property is property (land or
building or part of a building or
both) held to earn rental income or
capital gain or both. In the valuation of
investment properties according to
IAS 40 Citycon has decided to use the fair
value model. which will result in
changes in value being posted to the income
statement. The valuation of
investment properties is assessed in accordance with
International Valuation
Standards (IVS) at least once a year by on external
valuer to the income
statement. The valuation of investment properties is
assessed in accordance
with International Valuation Standards (IVS) at least
once a year by on
external valuer.
Property. plant and equipment
Property (other than
investment property), plant and equipment are recorded at
historical cost and
depreciated over the estimated economic lives of the assets.
Machinery and
equipment is depreciated over a period of from 4 to 10 years.
Intangible
assets
Intangible assets include software licenses. They are recorded at cost
and
amortised on straight-line basis over 5 years.
Impairment
Property.
plant and equipment and intangible assets are assessed at each balance
sheet
date to determine whether there is any indication of impairment. If such
indication exists, the recoverable amount shall be estimated. An impairment
loss
is recognised in the income statement if the carrying amount exceeds the
recoverable amount.
Revenue recognition
Revenue comprise mainly of rental
income from investment property. Rental income
is recognised on a
straight-line basis over the term of the lease.
Leases
Leases. for which
Citycon acts as a lessee. are classified as finance leases and
recognised as
assets and liabilities if the risks and rewards have been
transferred. A
lease is classified as an operating lease if it does not transfer
substantially all the, risks and rewards incidental to ownership.
Pension
benefits
Employee pension cover has been arranged through statutory pension
insurance.
The contributions to defined contribution plans are charged to the
income
statement in the period to which they relate.
Equity and
equity-related compensation benefits
IFRS 2 Share-based payment -standard has
been applied to share options that were
granted after 7 November 2002 and
have not vested before 1 January 2005. For
such option plans the fair value
of the equity instruments granted is measured
at grand date and the options
are expensed over the vesting period of the
instrument.
Share offering
expenditure
The transaction costs related to the acquisition of equity have
been treated as
a reduction in shareholders' equity with an adjustment for
income tax.
Capital loan
The capital loan is treated under IFRS as a
liability.
Reacquired own equity instruments (treasury shares)
Treasury
shares are deducted from the shareholders' equity.
Derivatives
Interest
rate derivatives are used as hedging instruments. They are designated
as cash
flow hedges of the future interest payments on variable rate
liabilities.
Hedging instruments are measured at fair value and the change in
value that
relates to the effective part of the hedge is recognised directly in
equity.
The ineffective part, if any, is recognised in the income statement.
Fair
value changes remain in equity until the hedged cash flow is
recognised.
Provisions
Provisions are recognised, when the group has a
present legal or constructive
obligation as a result of past events, when it
is probable that an outflow of
resources will be required to settle the
obligation and when a reliable estimate
of the amount can be
made.
Taxes
Income taxes include taxes based on taxable profit for the
financial period,
adjustments to prior year taxes and change in deferred
taxes.
Deferred tax assets and liabilities are recognised using the
liability method
for all temporary differences arising from the difference
between the tax basis
of assets and liabilities and their carrying values in
IFRS, the enacted tax
rate is used in the determination of deferred income
tax.
Helsinki. 21 October 2004
Citycon Oyj
Board of
Directors
Further information
CEO Petri Olkinuora
Tel. +358 9 6803 6738
or +358 400 333 256
petri.olkinuora@citycon.fi
CFO Pirkko Salminen
Te.
+358 9 6803 6730 or + 358 50 3022
485
pirkko.salminen@citycon.fi
Distribution
Helsinki Exchanges
Main
media
www.citycon.fi
Independent Auditors' Review Report to the Board of
Directors of Citycon Oyj
We have reviewed the preliminary comparative IFRS
information for the first
three quarters of 2004. These statements are the
responsibility of the company.
We conducted our review in accordance with
the International Standard on
Auditing applicable to review engagements. This
standard requires that we plan
and perform the review to obtain moderate
assurance as to whether the financial
statements are free of material
misstatement. A review is limited primarily to
inquiries of company personnel
and analytical procedures applied to financial
data and thus provides less
assurance than an audit. We have not performed an
audit and, accordingly, we
do not express an audit opinion.
Based on our reviews, we are not aware of
any material modifications that should
be made to the preliminary comparative
information for the first three quarters
of 2004, for them to be in
conformity with the IFRS principles.
Helsinki, October 21, 2004
Ari Ahti
Jaakko Nyman
Authorized Public Accountant
Authorized Public Accountant
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