CITYCON OYJ Stock Exchange Release 18 Oct. 2005 at
12.00
Citycon's Interim Report 1 January - 30 September 2005
- Turnover
totalled EUR 66.5 million (EUR 63.3 million)
- Profit before taxes amounted to
EUR 33.3 million (EUR 23.2 million), including
EUR 16.1 million increase in
fair value of investment property and EUR 5.7
million in one-time financial
expenses
- Earnings per share were EUR 0.21 (EUR 0.20, including EUR 0.025 in
one-time
deferred tax receivable)
- The internationalisation process began
with investments in Sweden and Estonia:
the figures include the Åkersberga
shopping centre in Sweden since 1 July 2005
and Rocca al Mare of Estonia since
21 July 2005
- Citycon raised its holding in the Trio Shopping Centre of
Lahti and
IsoKristiina of Lappeenranta
- The private placement of 12 million
shares was oversubscribed by
a factor of 1.7
Key figures 1-9
2005 1-9 2004 1-12 2004
Turnover, EUR million 66.5
63.3 84.7
Operating profit,
EUR million
58.8 42.7 52.6
% of turnover 88.5
67.5 62.1
Profit before taxes,
EUR million
33.3 23.2 26.5
Profit, EUR million
24.2 20.9 22.7
Earnings per share, EUR 0,21
0.20 0.22
Earnings per share,
diluted, EUR
0,20 0.20 0.22
Equity per share, EUR
2.15 2.02 2.01
P/E (price/earnings) ratio 13
8 10
Return on equity (ROE), % 13.5
13.8 11.0
Return on investment
(ROI), %
10.1 7.9 7.3
Equity ratio, % 29.8
29.3 29.6
Gearing, % 213.3
213.5 221.5
Net rental income, % 8.6 8.6
8.8
Occupancy rate, % 96.9 97.1
95.7
Personnel at the end
of period 52
43 45
Citycon and IFRS
Citycon Oyj has changed its
reporting practice in accordance with IAS/IFRS
standards (International
Financial Reporting Standards); this affects its interim
reports and financial
statements for 2005. Information related to this change is
available on pages
35-43 in the Financial Statements and IFRS Appendix to the
company's 2004
Annual Report.
Business Environment
Strong demand continued for retail
premises in Finland in the third quarter, with
high occupancy rates. Retail
sales continued
to grow 1) buttressed by low interest rate and low
inflation.
International investors have shown keen interest in the Finnish
property market,
which has also been reflected in the return requirements and
price levels of the
most sought-after properties.
1) Source: Statistics
Finland
Business Activities and Property Portfolio Summary
Citycon's
business activities comprise the entire chain of retail premises
ownership
i.e., ownership, leasing, management and development of properties.
Citycon
operates through the following four divisions: Shopping Centres,
Supermarkets
and Shops, Property Development, and Investments. At the end of the
reporting
period, Citycon owned 145 properties (146) at a fair value totalling
EUR 894.2
million (EUR 740.0 million).
The company's property portfolio consists
almost only of retail premises. At the
end of the reporting period, the
company owned 18 shopping centres and 127
supermarkets and shops, shopping
centres accounting for 66.9 per cent and
supermarket and shop premises for
33.1 per cent of the property portfolio's fair
value.
At the period-end,
37.1 per cent of the properties were located in the Helsinki
Metropolitan
Area, 36.0 in other major Finnish cities and 14.9 in other parts of
Finland.
Foreign properties accounted for 12.0 of the property portfolio. All of
the
above ratios are based on fair values.
Change in Fair Value of Investment
Property during the report period
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
an external
valuation professional. The latest valuation statement by Aberdeen
Property
Investors dated 30 September 2005 is available on Citycon's
website,
www.citycon.fi.
The fair value of Citycon's property portfolio
increased in the period under
review, due to changes in market trends and
leasing operations amounting to EUR
16.1 million. Increase in fair values
amounted to EUR 27.7 million and decrease
in fair values to EUR 11.7 million.
The most significant change in the market was
the ever rising international
interest in the Finnish property market, and
particularly in retail premises.
Increasing demand lowers the yield requirements
of investors and creates
pressure for increasing property prices, particularly in
the liveliest growth
centres.
Customers, Lease Portfolio and Occupancy Rate
At the end of the
period, Citycon had a total of 1,905 leases with 1,226 lessees.
The averaged
length of leases was 3.4 years.
The period-end occupancy rate for Citycon's
property portfolio was 96.9 per cent
(97.1%), this change resulting from
normal fluctuations in the leasing business
and new properties in the
company's property portfolio.
Lease Portfolio Summary
1-9 2005 1-9 2004
Number of leases started during
the period, total
187 260
Total area of leases
started, m2 32,661 49,092
Average length of lease
portfolio
at end of period, years 3.4
3.6
Shopping Centres Division
Shopping Centres Division's Key
Figures
Lease Portfolio Summary 1-9 2005 1-9
2004
Number of leases started during
the period, total
147 196
Total area of leases started, m2
14,564 28,557
Occupancy rate at end of period, % 97.5
97.4
Average length of lease portfolio
at end of period, years
2.7 2.9
Financial performance,
Shopping Centres 1-9 2005 1-9 2004
Turnover, EUR million
40.7 35.9
Operating profit, EUR million
42.1 24.6
Gross rental income, EUR million
39.6 34.8
Net rental income, EUR million 28.8
25.6
Net rental yield, % 8.3
7.7
Net rental yield, standing investments, % 8.6
7.8
Market value of property portfolio,
EUR million
598.0 459.0
Change in value of property portfolio,
EUR
million 14.3 0.0
Gross
investments, EUR million 125.7 14.0
The
calculation method for net income is based on the guidelines of the
KTI
Institute for Real Estate Economics and the IPD Investment Property
Databank.
Standing investments refer to properties held by Citycon through the
12-month
reference period. Properties under development and expansion as well
as lots are
eliminated from the figures.
On 31 May 2005, the Shopping
Centres division expanded with the acquisition of
all the shares in Kiinteistö
Oy Karjalan Kauppakeskus, based in Lappeenranta, for
EUR 7.9 million, making
Citycon the main owner of the IsoKristiina shopping
centre's retail premises.
This increase in holding will improve the company's
opportunities to develop
the property in the future.
In June, the company decided to build a new
shopping centre in Hervanta, a
district of Tampere, with the investment
estimated to total EUR 25.3 million and
net yield, after completion of the
shopping centre, over 8 per cent. The
extension project is estimated to be
completed in the spring of 2007.
In July Citycon acquired a 75 per cent
holding in the Åkersberga shopping centre
in Sweden. This was Citycon's first
international property investment, the total
investment including the launched
expansion projects, amounting to approximately
SEK 900-950 million (EUR 95-100
million). Citycon has agreed to acquire the
remaining shares in the shopping
centre once the said expansion projects have
been completed. The Åkersberga
shopping centre has been included in the company's
accounts since 1 July
2005.
In July 2005, Citycon acquired Rocca al Mare, a shopping centre in
Tallinn,
Estonia, and an adjoining site facilitating a major expansion of the
centre. This
was Citycon's first property investment in the Baltic countries.
The property is
fully leased and its anchor tenants are Prisma and Hobby Hall,
Finnish retail
chains. Rocca al Mare is included in the company's accounts
since 21 July 2005.
On September 13, Citycon increased its ownership in the
Trio shopping centre in
Lahti to 88.7 percent by buying a 33.1 per cent
holding in Kiinteistö Oy Lahden
Trio for EUR 18.7 million.
Based on an
agreement signed in September, Citycon will acquire retail centres
in
Åkermyntan, Kallhäll and Fruängen located in the Stockholm Metropolitan
Area,
Sweden, for SEK 256.3 million (EUR 27.6 million). The transaction is
expected to
close on 1 November 2005.
The period's investment decisions will
both contribute to Citycon's growth
strategy in Finland and its efforts to
actively develop business in Sweden and
Estonia.
Supermarkets and Shops
Division
Supermarkets and Shops Division's Key Figures
Lease Portfolio
Summary 1-9 2005 1-9 2004
Number of leases
started
during the period, total 40
64
Total area of leases started, m2 18,097
20,535
Occupancy rate at end of period, % 95.8
96.7
Average length of lease portfolio
at end of period, years
4.6 4.4
Financial performance,
Supermarkets &
Shops 1-9 2005 1-9 2004
Turnover, EUR million
25.8 27.4
Operating profit, EUR million
21.2 20.8
Gross rental income, EUR million
25.9 27.4
Net rental income, EUR million
19.0 20.8
Net rental yield, % 9.2
10.2
Net rental yield, standing investments, % 9.3
10.4
Market value of property portfolio,
EUR million
296.2 281.0
Change in value of property
portfolio,
EUR million 1.8
0.0
Gross investments, EUR million 3.3
0.8
The calculation method for net income is based on the guidelines of the
KTI
Institute for Real Estate Economics and the IPD Investment Property
Databank.
Standing investments refer to properties held by Citycon through the
12-month
reference period. Properties under development and expansion as well
as lots are
eliminated from the figures.
During the period, the company
sold three investment properties within the
Supermarkets and Shops division
for EUR 3.8 million, bringing in total capital
gains of EUR 0.3
million.
Property Development and Investments
The Property Development and
Investments Divisions' mission is to develop and
extend Citycon's existing and
new retail sites, and to identify new investment
opportunities in support of
the company's expansion strategy. The divisions' key
figures are not reported
separately because they have no property portfolio or
rental
income.
Personnel
At the end of the period, Citycon Group staff totalled 52
(43).
Turnover and Profit
Turnover for the period came to EUR 66.5 million
(EUR 63.3 million), with gross
rental income accounting for 98,5 per cent
(98.3 per cent) of turnover. Operating
profit rose to EUR 58.8 million (EUR
42.7 million).
Profit before taxes amounted to EUR 33.3 million (EUR 23.2
million) and after
taxes EUR 24.2 million (EUR 20.9 million). The effect of
changes in the fair
value of investment property on the period's profit was
EUR 16.1 million. The
period's profit also includes one-time expenses of EUR
5.7 million resulting from
premature repayment of the I/1999 capital loan. The
profit of the period is at
the previous year´s level taking into account the
tax effects of the above
mentioned items and lower income tax recorded a year
ago due to the recognition
of EUR 2.6 million in tax assets as income and the
EUR 1.2 million fall in
deferred tax liabilities as a result of a change in
corporate tax rate.
Balance Sheet and Financial Position
The period-end
balance sheet total was EUR 910.4 million (EUR 771.4 million), of
which cash
and cash equivalents accounted for EUR 8.8 million (EUR 27.3 million).
The
Group's financial position remained at a healthy level.
The Group's
period-end liabilities totalled EUR 639.2 million (EUR 545.7
million).
Interest-bearing liabilities grew by EUR 96.8 million, to EUR 587.2
million
(EUR 509.2 million). Short-term liabilities accounted for EUR 59.4
million
(EUR 32.2 million) of total liabilities. The interest rate of
the
interest-bearing liabilities averaged 4.8 per cent (5.1 per cent), if
one-time
expenses stemming from the premature repayment of the capital loan
are excluded.
The average loan maturity, weighted according to loan
principals, was 2.9 years
(3.9 years) while the average interest-bearing
period was 2.7 years (3.8 years).
The Group's equity ratio was 29.8 per cent
(29.3 per cent). Interest cover, or
the previous twelve months' profit before
interest expenses, taxes and
depreciation relative to net financial expenses,
was 2.2. Period-end gearing
stood at 213.3 per cent (213.5 per cent).
Citycon's interest-bearing liabilities
at the period-end included 87.4 per
cent (86.5 per cent) of floating rate loans,
of which 69.9 per cent (77.6 per
cent) had been converted into fixed rate ones,
based on interest rate swaps.
The overall hedging rate of the loan portfolio was
52.3 per cent.
At the
end of the report period, the par value of interest rate swaps totalled
EUR
337.9 million (EUR 340.8 million) while the market value of derivatives
came
to EUR -21.5 million (EUR -16.7 million). Net financial expenses of EUR
25.5
million (EUR 19.5 million) included EUR 5.7 million in one-time
expenses.
Citycon Oyj repaid its I/1999 capital loan on 30 June 2005 prior
to the loan's
maturity and on 17 June 2005 issued a 1/2005 five-year capital
loan of EUR 70
million at a fixed annual nominal interest of 4.70 per cent.
The loan's issue
price accounted for 99.956 per cent of the nominal loan
amount, and its maturity
date is 17 June 2010.
As consequence of the I/1999
loan's premature repayment and issue of the new
1/2005 capital loan, the net
savings in Citycon Oyj's financing expenses will,
after taking into account
the one-time expense of EUR 5.7 million, come to
approximately EUR 1.5 million
over the next four years.
Share Issue
In July 2005, Citycon carried out a
private placement for selected Finnish and
international institutional
investors, in part to finance the acquisition of the
Rocca al Mare shopping
centre in Tallinn, Estonia. The decision by the Board of
Directors to execute
this share issue was based on an authorisation granted by
the Annual General
Meeting of 5 April 2004.
A total of 12,000,000 new shares were offered for
subscription at a price of EUR
3.01 per share. Prior to the issue, the new
shares equalled around 10.6 per cent
of Citycon's share capital and voting
rights, while subsequent to it they
corresponded to around 9.6 per cent. The
share issue was carried out through a
bookbuilding process from 25 to 26 July
2005, and was oversubscribed by a factor
of 1.7. Some 99 per cent of the new
shares were allocated to foreign investors
and one per cent to Finnish ones.
An increase of share capital of EUR 16,200,000
was entered in the Trade
Register on 2 August 2005.
The new shares are quoted on the Helsinki Stock
Exchange's Main List since 3
August 2005. Citycon's stock exchange releases
issued in July and August 2005
provide details of the private
placement.
Share Capital and Shares
Share Capital
At the beginning of the
year, Citycon's share capital came to EUR 156,655,833.30
and the number of
shares totalled 116,041,358. The period saw Citycon increase
its share capital
through stock options and private placement by EUR
17,059,045.50 and reduce it
by EUR 5,229,900 by cancelling its own shares
(treasury shares). The table
below shows the changes in share capital in more
detail.
Changes in share
capital from 1 January to 30 September 2005
Date Reason
Change, Share capital, Number of
EUR
EUR shares
1 Jan. 2005
156,655,833.30 116,041,358
3 Feb. 2005 Increase
(stock
options) 124,200 156,780,033.30 116,133,358
6 April 2005
Reduction
(cancellation
of treasury shares) 5,229,900
151,550,133.30 112,259,358
29 April 2005 Increase
(stock
options) 49,950 151,600,083.30 112,296,358
21 July 2005
Increase
(stock options) 626,845.50 152,226,928.80
112,760,688
2 Aug. 2005 Increase
(private placement) 16,200,000
168,426,928.80 124,760,688
20 Sept. 2005 Increase
(stock
options) 58,050 168,484,978.80 124,803,688
30 Sept. 2005
168,484,978.80 124,803,688
At the end of September, the
company's registered share capital totalled EUR
168,484,978.80 and the number
of shares 124,803,688. The par value of a share is
EUR 1.35, each share
entitling its holder to one vote.
Traded Volume and Price
In
January-September, the total number of Citycon shares traded on the
Helsinki
Stock Exchange was 32.0 million (103.5 million), at a total value of
EUR 90.9
million (EUR 195.8 million). The highest quotation during the period
was EUR 3.50
(EUR 2.19), and the lowest EUR 2.36 (EUR 1.52). The
trade-weighted average price
for the period was EUR 2.84 (EUR 1.89), and the
share closed at EUR 3.49 (EUR
2.15). The company's market capitalisation at
the period end totalled EUR 435.6
million (EUR 240.6
million).
Shareholders
At the end of the period, Citycon had a total of
1,350 (1,188) registered
shareholders. Nominee-registered shareholders, mainly
international investors,
held 114.2 million (91.5 million) shares, or 91.5 per
cent (79.0 per cent) of
shares and voting rights.
Treasury Shares
At the
end of the period, Citycon Oyj held no treasury shares due to the
decision
made by the 2005 AGM to reduce the company's share capital by
cancelling all
3,874,000 treasury shares. The Board of Directors is not
authorised to buy back
company shares.
Shares Held by the Board of
Directors and Management
On 30 September 2005, Citycon Oyj's Board members
held a total of 91,227 shares
accounting for 0.07 per cent of all company
shares and voting rights. Citycon's
CEO held 100,000 shares and other
Corporate Management Committee members a total
of 3,000 shares.
Annual
General Meeting
The company's Annual General Meeting (AGM) was held in
Helsinki on 5 April 2005.
Its decisions are available in Citycon's interim
report for 1 January 2005-31
March 2005 and on its website at
www.citycon.fi.
Board Authorisations
The AGM authorised the Board to decide
by 5 April 2006 to issue one or several
convertible bonds, issue stock options
and increase the company's share capital
through one or several rights issues.
The authorisation includes a right to
deviate from the shareholders'
pre-emptive subscription right.
The Board of Directors exercised part of
this authorisation by taking a decision
on the July private placement, and
retains the right to issue a maximum of
11,226,670 new shares and increase the
company's share capital by a maximum of
EUR 15,156,004.50.
Stock
Options
Citycon has two stock-option schemes in force, the 1999 A/B/C scheme
and the 2004
A/B/C scheme. The 1999 stock-option scheme related stock options
are listed on
the Helsinki Stock Exchange.
From January to September 2005,
544,330 new shares at a nominal value of EUR 1.35
were subscribed as per
Citycon's 1999 stock-option scheme at a subscription price
of EUR 1.40 per
share. As a result, the company's share capital increased by
EUR
734,845.50.
Under the company's 2004 stock-option scheme, Citycon's
Board of Directors
decided on 13 September 2005 to grant a total of 1,160,000
B stock options to all
employees. These stock options were issued by
Veniamo-Invest Oy, a subsidiary of
Citycon Oyj. Citycon employees hold a total
of 1,040,000 stock options 2004 A.
Veniamo-Invest Oy retains 1,700,000 2004
A/B/C stock options, which it may issue
to current and future Citycon
employees upon a decision by the Board of Directors
to that
effect.
Citycon's CEO holds 1,000,000 1999 A/B/C and 290,000 2004 A/B stock
options,
while other Corporate Management Committee members hold a total of
350,670 1999
A/B/C stock options and 350,000 2004 A/B stock options.
The
subscription period for 2004A stock options is 1 September 2006-31 March
2009,
1 September 2007-31 March 2010 for 2004B stock options and 1 September
2008-
31 March 2011 for 2004C stock options.
For more detailed information
on Citycon's stock-option schemes, please refer to
the 2004 Annual Report and
the company's website at www.citycon.fi.
Events after the Report Period
On
5 October 2005, Eero Sihvonen, M.Sc.(Econ.), was appointed Citycon Oyj's
new
Chief Financial Officer and member of the Corporate Management Committee.
He will
take up his duties by 5 December 2005 at the latest.
After the
reporting period, 189,000 shares were subscribed based on 1999 A/B/C
stock
options at a price of EUR 1.40 per share. The corresponding EUR
255,150.00
increase in share capital will be entered in the Trade Register on
or around 19
October 2005.
As a result of this share capital increase,
Citycon Oyj's registered share
capital totals EUR 168,740,128.80 and the
number of shares 124,992,688. The new
shares are expected to be publicly
traded on the Helsinki Stock Exchange's Main
List together with the old ones
as of 20 October 2005.
Stock options based on Citycon's 1999 A/B/C stock
option scheme entitle their
holders to subscribe a total of 4,411,170 new
shares, corresponding to a further
increase of EUR 5,955,079.50 in share
capital. The share subscription period will
expire on 30 September
2007.
Future Outlook
Citycon expects demand, occupancy rates and rents for
its retail premises to
remain stable in the Helsinki Metropolitan Area and
Finland's major cities. In
this increasingly intensified competitive
environment, the company is seeking
opportunities to expand its business in
Finland, Scandinavia and the Baltic
countries.
Citycon estimates that its
turnover and profit for 2005 will grow as a result of,
among other things, the
executed property transactions.
Consolidated income statement
EUR million
7-9 7-9 1-9 1-9 1-12
2005 2004 2005 % 2004 % 2004
Turnover 23.9
21.1 66.5 100.0 63.3 100.0 84.7
Other income 0.0 0.2
0.2 0.3 0.2 0.3 0.7
Profit on sale of
investment property 0.0
0.0 0.3 0.5 0.0 0.0 0.1
Change in value of
investment
property 8.3 0.0 16.1 24.2 0.0 0.0 -5.0
Expenses
Depreciation and
impairments 0.1 0.2 0.2 0.3 0.2
0.3 0.2
Other expenses 8.9 5.9 24.0 36.1 20.6 32.5
27.8
Operating profit 23.3 15.2 58.8 88.5 42.7 67.5
52.6
Net financial
expenses 7.2 6.6 25.5 38.4 19.5
30.8 26.1
Profit before
taxes 16.1 8.6 33.3 50.2
23.2 36.7 26.5
Taxes -4.3 -2.4 -9.2 -13.8 -2.3
-3.7 -3.8
Profit 11.8 6.2 24.2 36.4 20.9 33.0
22.7
Profit
attributable to:
Shareholders of
the parent
company
11.7 6.2 24.1 20.9 22.7
Minority
interests 0.1 0.0 0.1 0.0 0.0
Total
11.8 6.2 24.2 20.9 22.7
Earnings
per
share, EUR 0.10 0.06 0.21 0.20
0.22
Earnings per share,
diluted, EUR 0.09 0.06 0.20
0.20 0.22
Consolidated balance sheet
EUR million 30
Sept. 2005 30 Sept. 2004 31 Dec. 2004
Assets
Non-current
assets
Intangible assets 0.5 0.3
0.5
Tangible assets 0.5 1.1
1.7
Investment properties 894.2 740.0
738.7
Investmets 0.1 0.2
0.0
Deferred tax assets 0.0
Non-current assets, total 895.4
741.6 740.8
Current assets
Short-term receivables
6.3 2.4 4.2
Cash and cash equivalents 8.8
27.3 7.9
Current assets, total 15.1
29.8 12.2
Assets, total 910.4
771.4 753.0
Liabilities and
shareholders' equity
Equity
attributable to
equity holders of the parent
Share capital
168.5 156.3 156.8
Share premium fund 59.7
34.9 35.0
Treasury shares 0.0
-4.7 -4.7
Fair value reserve -15.9
-10.9 -13.3
Other funds 6.6 6.6
6.6
Retained profits 25.4 22.7
22.9
Profit 24.2 20.9
22.7
Shareholders' equity, total 268.3 225.7
226.0
Minority interest 2.9 0.0
0.0
Liabilities
Long-term liabilities 570.7 509.2
493.5
Deferred tax liabilities 9.1 4.3
3.0
Long-term liabilities, total 579.9 513.4
496.6
Short-term liabilities 59.4 32.2
30.5
Liabilities. total 639.2 545.7
527.0
Liabilities and shareholders'
equity, total 910.4
771.4 753.0
Statement of changes in shareholders'
equity
Attributable to equity holders of the parent
Share
premium
fund and
Fair
Share other value Treasury Retained
Total
EUR million capital reserves reserve shares profits
equity
Shareholders'
equity
1 Jan. 2004 142.8 34.8 -7.7
-4.7 37.1 202.4
Cash flow hedges -3.2
-3.2
Profit 20.9
20.9
Total recognised
income
and expense -3.2
20.9 17.7
Dividends
-14.3 -14.3
Shares issued 13.5 6.7
20.2
Other changes -0.2
-0.2
Shareholders'
equity
30 Sept. 2004 156.3 41.5 -10.9 -4.7
43.5 225.7
Shareholders'
equity
1 Jan. 2005 156.8 41.5
-13.3 -4.7 45.6 226.0
Change in share
capital
-5.2 5.2 4.7 -4.7 0.0
Cash flow hedges
-2.6 -2.6
Profit
24.1 24.1
Total recognised
income and expense
-2.6 24.1 21.5
Dividends
-15.7 -15.7
Shares issued 16.2 19.5
35.7
Shares subscribed
based on warrants 0.7
0.0 0.1 0.8
Shareholders'
equity
30 Sept.
2005 168.5 66.3 -15.9 0.0 49.4 268.3
Cash flow
statement
EUR million 1-9 2005 1-9 2004 1-12
2004
Operating activities
Profit before taxes 33.3 23.2
26.5
Adjustments:
Profit on sale of
investment property
-0.3 0.0 -0.1
Change in value of
investment
property -16.1 0.0 5.0
Depreciation and
impairments 0.2 0.2 0.1
Financial income and
expenses 25.3 19.5 26.1
Other adjustments
1.5 0.4 0.2
Cash flow before change in
working
capital 43.9 43.3 57.7
Change in
working capital 2.4 0.3 -0.2
Cash flow from
operating
activities before financial
items and taxes 46.3
43.6 57.5
Interest paid and payments
for other
financial expenses
of operating activities -21.6 -16.3
-28.0
Dividend and interest received
from business operations 0.3
0.5 0.8
Taxes paid -3.1
-3.5 -4.2
Cash flow from operating
activities
21.8 24.3 26.1
Investing
activities
Investments in tangible
and intangible assets -7.3
-8.5 -10.8
Shares in subsidiaries
purchased
-82.7 -7.6 -8.8
Shares in subsidiaries sold
0.0 0.7 0.8
Shares in associated
companies sold
2.8 0.0 0.0
Other investments sold
1.0 0.0 0.1
Cash flow from
investing
activities -86.2 -15.3
-18.7
Financial activities
Share issue 38.4
20.3 20.8
Fund payments from minority
interest
0.0 0.0 0.1
Withdrawals of
short-term loans
99.6 8.1 18.2
Repayments of
short-term
loans -78.5 -8.0
-18.1
Withdrawals of long-term
loans 199.7
4.9 414.9
Repayments of long-term
loans
-178.3 -7.3 -435.7
Dividend paid and
other
distribution of profit -15.7 -14.3
-14.3
Cash flow from financial
activities 65.2
3.7 -14.1
Increase in cash and cash
equivalents
0.8 12.7 -6.7
Cash and cash equivalents
at
the beginning of period 7.9 14.7
14.7
Cash and cash equivalents at
the end of period 8.8
27.3 7.9
Segment reporting
EUR million 7-9 2005 7-9
2004 1-9 2005 1-9 2004 1-12 2004
Turnover
Shopping Centres 15.4
12.0 40.7 35.9 48.4
Supermarkets
and Shops
8.6 9.1 25.8 27.4 36.3
Others 0.0
0.0 0.0 0.0 0.0
Total 23.9 21.1
66.5 63.3 84.7
Operating profit
Shopping Centres 20.1
9.4 42.1 24.6 18.8
Supermarkets
and Shops
5.0 8.3 21.2 20.8 37.5
Others -1.9
-2.5 -4.5 -2.7 -3.7
Total 23.3
15.2 58.8 42.7 52.6
Key financial figures 1-9 2005
1-9 2004 1-12 2004
Earnings per share, EUR 0.21
0.20 0.22
Earnings per share,
diluted, EUR
0.20 0.20 0.22
Equity per share, EUR 2.15
2.02 2.01
Return on equity (ROE), % 13.5
13.8 11.0
Return on investment
(ROI), %
10.1 7.9 7.3
Equity ratio, % 29.8
29.3 29.6
Consolidated contingent liabilities
EUR
million 30 Sept. 2005 30 Sept. 2004 31 Dec. 2004
Mortgages
on land
and buildings 2.0 362.2
2.4
Group company shares pledged 0.0 76.9
0.0
Other pledged shares 0.0 76.8
0.0
Other pledges given 0.0 0.6
0.0
Group's derivatives
30 Sept. 30
Sept. 31 Dec.
2005 2004
2004
Par Fair Par Fair Par
Fair
EUR million values values values values values
values
Interest-rate
derivatives
Interest-rate
swaps
Maturing in 2007
78.2 -1.0 78.2 -0.3 78.2 -0.5
Maturing in 2008 50.0
-2.6 50.0 -2.1 50.0 -2.2
Maturing in 2009 126.7 -9.4
129.6 -7.4 128.2 -7.9
Maturing in 2010 83.0 -8.5
83.0 -6.8 83.0 -7.9
Total 337.9 -21.5 340.8
-16.7 339.4 -18.5
Interest-rate options
Interest-rate
caps
purchased
Maturing in 2004 0.0 0.0 53.8 0.0 0.0
0.0
Total 0.0 0.0 53.8 0.0 0.0
0.0
The fair values for derivatives describe their value if all agreements
had been
closed at the market price of the end of period. Derivatives
have been
used for hedging the loan portfolio.
The accrued interest for the
period included in the derivatives' fair values,
being EUR 1.7 million (EUR
2.1 million) has been booked in interest expenses.
Summary of effects of
IFRS on profit
EUR million 7-9/2004 1-9/2004
1-12/2004
Profit FAS 4.5 12.8
17.4
Change in valuation of
investment property 2.4
5.4 2.4
Change in deferred tax
assets and liabilities
-0.6 2.7 3.1
Change in values of interest
rate
derivatives 0.0 0.0 -0.2
Changes
total 1.8 8.0 5.3
Profit IFRS
6.2 20.9 22.7
Summary of
effects of IFRS on shareholders' equity
EUR million 1 Jan. 2004
30 Sept. 2004 31 Dec. 2004
Shareholders' equity FAS 278.0
296.9 302.0
Change in valuation of
investment properties
16.2 21.6 18.6
Change in values of interest
rate
derivatives -10.9 -14.7
-18.3
Reclassification of treasury
shares -4.7
-4.7 -4.7
Reclassification of
capital loan
-68.5 -68.5 -68.5
Change in deferred tax assets
and
liabilities -7.7 -4.3 -3.0
Other
changes 0.0 -0.6 -0.2
Changes total
-75.6 -71.1 -76.0
Shareholders'
equity IFRS 202.4 225.7 226.0
Business
combinations
1 July 2005 Citycon acquired 75% of Swedish shopping centre
Åkersberga and 21
July 2005 100% of Estonian shopping centre Rocca al Mare.
The identifiable assets
and liabilities, corresponding the shares acquired, of
Åkersberga and Rocca al
Mare have been recognized at fair value. From the date
of acquisition, Åkersberga
and Rocca al Mare have contributed EUR 0.7 million
to the Group's profit.
The figures are unaudited.
Accounting
Principles
The accounting principles applied in the annual financial
statements as of 31
December 2004 are applied in these financial
statements.
Financial Information in 2005
Financial results for 1 January -
31 December 2005 will be published on 9
February 2006 at 12.00
noon.
Further information for investors is available on Citycon's
website,
www.citycon.fi.
Further information:
CEO Mr Petri Olkinuora
Tel.
+358 9 6803 6738 or +358 400 333
256
petri.olkinuora@citycon.fi
Distribution:
Helsinki Stock Exchange
Main
media
www.citycon.fi
Report on the general review of Citycon Oyj's
interim report
for the period 1 January - 30 September 2005
We have
generally reviewed the interim report of Citycon Oyj for the period 1
January
- 30 September 2005. The Board of Directors and the Managing Director
have
prepared an interim report in accordance with the Securities Market
Act,
chapter 2, paragraph 5. Based on our interim review we express at the
request of
the Board of Directors a report in accordance with the Securities
Market Act,
chapter 2, paragraph 5.
We conducted our general review in
accordance with the International Standard on
Auditing applicable to general
review engagements. This standard requires that we
plan and perform the review
to obtain reasonable assurance as to whether the
financial statements are free
of material misstatement. The general 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 general
review, nothing has come to our attention that causes us to
believe that the
interim report does not give a true and fair view in accordance
with the
Securities Market Act regarding the financial position of Citycon
Oyj.
Helsinki, 18 October 2005
Tuija Korpelainen Mikael
Holmström
Authorized Public Accountant Authorized Public Accountant
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