Citycon Oyj's Financial Results for 1 January-31 December 2006

Citycon Oyj's Financial Results for 1 January-31 December 2006

Year 2006 in Brief

Key Figures
- Turnover increased by 29.5 per cent to EUR 119.4 million (2005: EUR 92.2
million), mainly as a consequence of new acquisitions.
- Profit before tax increased to EUR 165.6 million (EUR 74.2 million), including
a EUR 120.1 million (EUR 45.9 million) increase in the fair value of investment
properties.
- Earnings per share were EUR 0.78 (EUR 0.47).
- Earnings per share excluding the effects of changes in fair value, gains on
sale and other extraordinary items were EUR 0.20 (EUR 0.20).
- Net cash from operations per share amounted to EUR 0.20 (EUR 0.19).
- Per-share net asset value (EPRA NAV) increased to EUR 3.38 (EUR 2.45).
- Average net yield requirement for the investment properties on 31 December 2006
according to the external appraiser was 6.6 per cent.
- The Board of Directors proposes a per-share dividend of EUR 0.14 (EUR 0.14).
- Equity ratio improved to 39.1 per cent (36.7%).

Citycon continued to implement its growth strategy in 2006 by acquiring new
shopping and retail centres for the total sum of EUR 400.9 million in Finland,
Sweden and Lithuania, and investing a further EUR 35.4 million in currently-owned
properties. The market value of Citycon's property portfolio was EUR 1,447.9
million at the year end, with foreign properties accounting for 30.3 per cent. As
part of the implementation of its growth strategy, Citycon reorganised its
operations by introducing new regional business organisations towards the end of
the year. This affected Citycon Group's financial reporting, entailing that the
Financial Statements for 2006 are the first to be prepared on the basis of the
new regional structure.

Key Figures
1-12 2006 1-12 2005
Turnover, EUR million 119.4 92.2
Operating profit, EUR million 196.5 105.2
% of turnover 164.6 114.1
Profit before taxes, EUR million 165.6 74.2
Profit attributable to parent company
shareholders, EUR million 126.4 59.8

Fair market value of investment
properties, EUR million 1,447.9 956.6

Earnings per share (basic), EUR 0.78 0.47
Earnings per share (diluted), EUR (EPRA EPS) 0.74 0.46
Earnings per share (basic), excluding the
effects of changes in fair value, gains on
sale and other extraordinary items, EUR 0.20 0.20
Dividend per share, EUR 0,14* 0.14
Net cash from operating activities
per share, EUR 0.20 0.19
Equity per share, EUR (EPRA NAV) 3.38 2.45
EPRA NNNAV 3.22 2.45
P/E (price / earnings) ratio 6 7
P/E ratio, excluding the effects of
changes in fair value, gains on sale
and other extraordinary items 25 15
Return on equity (ROE), % 25.8 22.5
Return on investment (ROI), % 16.8 13.5
Equity ratio, % 39.1 36.7
Gearing, % 136.6 156.8
Net interest-bearing debt (fair value),
EUR million 811.2 564.9
Net rental yield, % 7.6 8.5
Occupancy rate, % 97.1 97.2
Personnel (average for the period) 62 43
Personnel (at the end of the period) 73 57

*) Proposal by the Board of Directors

CEO Petri Olkinuora comments on the financial year as follows:

"For Citycon, 2006 marked a year of continued growth. The company strengthened
the balance sheet and improved the cash-flow per share. Earnings per share
(excluding extraordinary items) remained the same with reduced gearing.

Despite intensifying competition, we were able to maintain our leading market
position in Finland, to strengthen our property portfolio in Sweden and to enter
Lithuania. The disposal of non-core properties during the financial year, with an
aim to recycle capital to higher growth areas and higher quality properties, has
further sharpened the Group's strategy of focusing on shopping centres and other
large retail units.

Towards the end of the year, Citycon introduced a regional organisation structure
in order to take the special characteristics of the local market areas in
consideration as effectively as possible.

Citycon will continue to pursue its growth strategy in 2007. The strengthened
organisation and resources will enable us to focus more on the commercial
management, development and modernisation of our retail sites. We will respond to
the toughening international competition by developing more customer-focused and
more competitive retail properties."

Business
- On 31 December 2006, Citycon owned 26 shopping centres and 53 other retail
properties. The market value of Citycon's property portfolio totalled EUR
1,447.9 million (EUR 956.6 million), of which the property portfolio in Finland
accounted for EUR 1,009.7 million, that in Sweden EUR 354.8 million and that in
the Baltic countries, EUR 83.3 million.
- Citycon's net rental income improved by 23.5 per cent to EUR 82.8 million
(EUR 67.0 million). Net rental income for like-for-like properties rose by 3.0
per cent.
- On 31 December 2006, Citycon had a total of 3,083 (2,109) leases with
2,107(1,120) lessees. The year-end occupancy rate of the property portfolio
stood at 97.1 per cent (97.2 per cent) and net yield at 7.6 per cent (8.5 per
cent). The leasable area rose by 23.3 per cent to 735 029 square metres.

Capital expenditure and divestments
- In the spring, Citycon expanded into Lithuania by acquiring the Mandarinas
shopping centre in Vilnius.
- The year saw several acquisitions in Finland and Sweden, the most significant
shopping centre investments in Sweden being Jakobsberg, Stenungs Torg,
Liljeholmen and Tumba, announced in December (the transaction finalised on 31
January 2007). In Finland, Citycon made several acquisitions, including the
shopping centre Columbus and the remaining minority share of Myyrmanni, making
Citycon the sole owner.
- Citycon sold 75 non-core properties in Finland, recognising pre-tax gain on
sale of EUR 5.9 million after purchase price adjustment.
- The most significant development projects underway were the refurbishment and
extension projects of the shopping centres Trio, Åkersberga, Duo and
Lippulaiva.
- Capital expenditure totalled EUR 436.4 million, of which EUR 400.9 million
was allocated to new investments, EUR 35.4 million to development and
refurbishment projects and EUR 0.2 million to other investments.

Financial position
- The Group's equity ratio stood at 39.1 per cent (36.7 per cent) at the year
end.
- During the financial year, Citycon carried out two successful capital market
transactions: subordinated convertible bonds issue of EUR 110 million placed
with institutional investors and a rights issue of EUR 75 million.
- Citycon signed a new commercial paper programme worth EUR 100 million,
replacing its previous commercial paper programmes worth EUR 60 million.
- Citycon restructured its financing by signing a syndicated credit facility of
EUR 600 million with an international banking group.
- Due to the new financing arrangements, the company's average loan maturity was
extended to 4.8 years (2.7 years).
- Citycon increased the hedging ratio with 81.6 per cent (70.0 per cent) of the
interest-bearing liabilities at fixed rates at period-end.

Share performance
- Share performance was highly positive during the period: the trade-weighted
average share price rose to EUR 3.86 (EUR 2.95) and the company's market
capitalisation increased by 99.1 per cent to EUR 844.3 million (EUR 424.1
million).

The EPRA Best Practices Policy Recommendations
In January 2006, the European Public Real Estate Association (EPRA), which
represents listed European property investment companies, published financial
reporting recommendations for these companies, and completed the recommendations
in November 2006. Citycon adheres to these recommendations in its financial
reporting, which supplement the IAS/IFRS standards, not replace them. The
recommendations are available in their entirety on EPRA's website at
www.epra.com.

In conjunction with the adoption of the EPRA recommendations, Citycon Group has
changed its income statement presentation so that information is presented by
function instead of expense type. Thus, the income statement includes gross and
net rental income. Citycon is confident that the adoption of the EPRA
recommendations will help investors evaluate its earning power and will increase
the transparency of its investor information.

Since Citycon applies the fair-value model in the measurement of its investment
properties under IAS 40, Citycon's IFRS profit equals EPRA profit. IFRS diluted
earnings per share equal EPRA earnings per share. EPRA NAV corresponds to
Citycon's reported IFRS-compliant shareholders' equity attributable to parent
company owners.

Key Figures in Accordance with EPRA Recommendations
EUR million per share (diluted), EUR
1-12 2006 1-12 2005 1-12 2006 1-12 2005
EPRA NAV 565.3 356.6 3.38 2.45
(iv) Fair value
gains/losses of financial
instruments in the income
statement - - - -
(iv) Mark-to-market adjustment on
fair value of debt -26.9 0.5 -0.16 0.00
(iii) Deferred taxes - - - -
EPRA NNNAV 538.5 357.1 3.22 2.45

Citycon's NNNAV rose by 50.8 per cent to EUR 538.5 million during the financial
year. NNNAV per share was EUR 3.22.

Business Environment

In 2006, brisk demand continued for retail premises in Citycon's operating areas,
i.e. Finland, Sweden and the Baltic countries, with high occupancy rates,
sustained growth in the retail business contributing to these favourable market
developments.

Market growth in countries in which Citycon operates is largely due to favourable
economic development and increases in households' purchasing power and consumer
spending.

The favourable market situation has increased the interest of international
investors in properties in Citycon's operating areas, resulting in tougher
competition and extremely brisk demand for attractive retail properties.
Competition has improved market liquidity and raised prices, as consequence of
which yield requirements for properties have decreased.

Business and Property Portfolio in Summary

Specialising in shopping centres and other large retail units, Citycon is a
property investment company operating in Finland, Sweden and the Baltic
countries. Citycon is the leading shopping centre operator in Finland and it has
also established a firm foothold in its other operating regions. Citycon's
business is based on expertise and active involvement throughout the property's
ownership chain. It does not only own retail properties but it also leases,
markets, manages and develops the properties it owns.

At the year end, the company owned 26 (20) shopping centres and 53 (128) other
retail properties.

At the end of 2006, the market value of Citycon's property portfolio totalled EUR
1,447.9 million, of which its property portfolio in Finland accounted for 69.7
per cent (85.7 per cent), that in Sweden 24.5 per cent (8.0 per cent) and that in
other countries, 5.8 per cent (6.3 per cent).

The reporting period saw the disposal of 75 non-core properties at a debt-free
price of EUR 73.9 million after purchase price adjustment. The sold properties'
fair value recognised in the balance sheet of 31 December 2005 totalled EUR 65.3
million. Their sale generated EUR 5.9 million in pre-tax gain on sale, improving
Citycon's earnings per share for 2006 by around EUR 0.01 and its profit by
approximately EUR 2.1 million, taking account of gain on sale, transaction costs,
lost net rental income for the fourth quarter and taxes. All of the sold
properties, with a combined area of around 77,000 square metres, are located in
Finland. A list of the sold properties is available on the company's website.

In 2006, the company entered the Lithuanian market and pursued a strong growth
policy in Sweden. The table below gives more details on the 2006 real estate and
share transactions.

Major acquisitions 2006

Property Company Location Dept free Post-
purchase acqui-
price with sition
transaction holdings,
expenses %
(acquisition date
exchange rates),
MEUR

Finland
Shopping KOy Myyrmanni Vantaa 35.6 100.0
Centre (26% of shares)
Myyrmanni

Shopping Real estate Kouvola 2.0 100.0
Centre transaction
Valtari

Shopping Tullintori KOy Tampere 8.8 100.0
Centre (57.4% shares)
Tullintori

Shopping Vuosaari Helsinki 75.3 1) 100.0
Centre Investor Ab
Columbus

Sweden
Lindome Real estate Mölndal, 8.0 100.0
retail transaction Greater
centre Gothenburg

Backa, Real estate Greater 25.7 100.0
Hindås, transaction Gothenburg
Landvetter and
Floda retail centres

Shopping Stenungs Torg Stenungsund, 37.2 70.0
Centre Fastighets AB Greater
Stenungs Torg Gothenburg

Shopping BHM Järfälla, 106.6 100.0
Centre Centrumfastig- Greater
Jakobsbergs heter AB Stockholm
Centrum

Shopping Liljeholmsplan Stockholm 60.6 100.0
centre Fastighets AB
project Liljeholmsplan
Bostadsfastig-
heter AB
Liljeholmstorget
Development
Services AB

Shopping Tumba Botkyrka, 60.5 100.0
Centre Centrumfastig- Greater
Tumba Centrum hets AB Stockholm
2)

Lithuania
Shopping UAB Prekybos Vilnius 14.9 100.0
Centre Centras
Mandarinas Mandarinas
(formerly UAB Rimvesta)

1) The previously announced purchase price of EUR 80.1 million includes the
investments in the extension project carried out after the acquisition.
2) Transaction finalised on 31 January 2007.

Maintaining its properties as attractive and dynamic retail centres in the eyes
both of customers and lessees forms the key element in Citycon's business.
Citycon's key refurbishment and development projects, launched in 2006 or
earlier, are listed in the table below. Citycon will present development projects
in greater detail in its Annual Report for 2006.

Development projects

Property Location Estimated Realised Estimated
total costs capital date of
MEUR expenditure final
by the end comple-
of 2006 tion
Lippulaiva Espoo, Finland 60-70 1) 6.6 2008
Trio Lahti, Finland 50.5 0.6 2009
Duo Tampere, Finland 25.0 17.6 2007
Lentola Kangasala, Finland 16.6 - 2007
Piispanristi Kaarina, Finland 8.2 - 2007
Torikeskus Seinäjoki, Finland 4.0 0.6 2008
Åkersberga Österåker, Sweden 40.0 2) 3.4 2009

1)Both stages included in the figure. The 2nd stage is subject to a positive
decision by Citycon's Board of Directors.
2)With a holding of 75 per cent in the Åkersberga shopping centre, Citycon
accounts for around EUR 27 million of the development investment.

Changes in Property Portfolio Fair Value

Citycon measures its investment property at fair value, under IAS 40, according
to which changes in its fair value are recognised through profit or loss. Using
International Valuation Standards (IVS), an external professional valuer conducts
the valuation of the company's property at least once a year. However, 2006 saw
quarterly valuations by an external appraiser, due to the active market. A
Property Valuation Statement prepared by Aberdeen Property Investors Finland Oy
on the situation on 31 December 2006 is available at www.citycon.fi.

During the financial year, the fair value of Citycon's property portfolio rose by
EUR 120.1 million, as a result of changes in general market conditions and the
leasing business. The year saw a total increase in the fair value of EUR 131.3
million and a total decrease of EUR 11.2 million.

The average net yield requirement defined by Aberdeen Property Investors Finland
Oy for Citycon's property portfolio decreased to 6.6 per cent. This decrease was
mainly due to the very active property market.

The most significant change in the market was intensifying international interest
in the Finnish property market, particularly towards retail properties.
Increasing demand lowers yield requirements set by investors and creates upward
pressure on property prices, particularly in the liveliest growth centres.

Lease Portfolio and Occupancy Rate

At the end of the financial year, Citycon had a total of 3,080 (2,109) leases
with 2,107 (1,120) lessees. The average length of the leases was 2.9 (3.2) years.
The year-end occupancy rate of the property portfolio stood at 97.1 per cent
(97.2 per cent) and net rental yield at 7.6 per cent (8.5 per cent).

Reported net rental income increased by 23.5 per cent, to EUR 82.8 million, and
the gross leasable area (GLA) grew by 23.3 per cent, to 735,029 square metres.
Net rental income for like-for-like properties grew by 3.0 per cent. Like-for-
like properties refer to properties held by Citycon throughout the 24-month
reference period, excluding properties under development and extension as well as
lots.

The calculation method for net yield and standing (like-for-like) investments is
based on the guidelines issued by the KTI Institute for Real Estate Economics and
the Investment Property Databank (IPD).

Lease portfolio summary
1-12 2006 1-12 2005
Number of leases started during the period 369 314
Total area of leases started, sq.m. 73,300 34,240
Occupancy rate at end of the period,% 97.1 97.2
Average length of lease portfolio at
the end of the period, year 2.9 3.2

Business areas

Citycon reorganised its operations towards the end of the year by introducing a
regional organisation based on operating countries in place of the former
divisions based on property types (Shopping Centres, Supermarkets and Shops and
Property Development). This new regional organisation divides Citycon's
operations into three business areas, Finland, Sweden and the Baltic Countries,
and each is further divided into Retail Properties and Property Development.

Finland

Citycon is the Finnish market leader for shopping centre business. Reported net
rental income increased by 8.2 per cent, to EUR 68.8 million while net rental
income for like-for-like properties rose by 3.0 per cent. Finland accounted for
83.1 per cent of Citycon's total net rental income.

Lease portfolio summary
1-12 2006 1-12 2005
Number of leases started during the period 321 298
Total area of leases started, sq.m. 66,500 31,480
Occupancy rate at end of the period,% 97.2 96.8
Average length of lease portfolio at
the end of the period, year 3.1 3.3

Financial performance
1-12 2006 1-12 2005
Turnover, EUR million 95.8 87.4
Net fair value gains on investment
property, EUR million 104.8 45.4
Operating profit, EUR million 176.1 106.6
Gross rental income, EUR million 93.1 84.8
Net rental income, EUR million 68.8 63.6
Net rental yield, % 7.6 8.7
Net rental yield, like-for-like properties, % 7.9 8.7
Market value of property portfolio,
EUR million 1,009.7 820.1
Capital expenditure, EUR million 152.8 38.9

In Finland, the company acquired the Columbus shopping centre in Vuosaari,
Helsinki, for EUR 75.3 million. Columbus's extension project was completed in
early October, increasing the shopping centre's gross leasable area to around
20,000 square metres. Other major investments in Finland included the Myyrmanni
shopping centre in Vantaa, now wholly owned by Citycon, the acquisition of the
Tullintori shopping centre in Tampere and that of the Valtari shopping centre in
Kouvola, the related capital expenditure totalling approximately EUR 46.4
million.

In July, Citycon sold 75 non-core properties in Finland, recognising gain on sale
of EUR 5.9 million before tax in Q3.

The largest-scale development projects in Finland include the extension and
refurbishment of the Trio shopping centre in Lahti, the Duo shopping centre in
Hervanta, Tampere, and the Lippulaiva shopping centre in Espoo. Of these, the Duo
project is progressing on schedule, and the first stage of the Lippulaiva
shopping centre development project has been completed. The second stage is due
to start as soon as the related alteration to the city plan has become legally
valid. The modernisation project for the Trio shopping centre is expected to
commence in February 2007.

In addition, the company is building a new retail centre in Kaarina, some five
kilometres from downtown Turku, and is modernising the Torikeskus shopping centre
in Seinäjoki. In December 2006, Citycon decided to build a completely new retail
centre in Lentola, Kangasala, close to Tampere, due for completion in the autumn
of 2007.

The new acquisitions made in Finland in 2006 were worth a total of EUR 124.3
million, while development investments totalled EUR 28.5 million.

At year-end, the company owned 19 (16) shopping centres and 46 (127) other retail
properties in Finland.

The acquisitions and development projects listed above will further strengthen
Citycon's position as Finland's market leader in the shopping centre business.

Sweden

In 2006, Citycon's new acquisitions strengthened its market position especially
in Sweden. Reported net rental income increased by 422.4 per cent, to EUR 9.3
million. Net rental income in Sweden accounted for 11.2 per cent of Citycon's
total net rental income.

Lease portfolio summary
1-12 2006 1-12 2005
Number of leases started during the period 32 2
Total area of leases started, sq.m. 3,900 130
Occupancy rate at end of the period, % 96.3 99.6
Average length of lease portfolio at
the end of the period, year 2.2 2.3

Financial performance
1-12 2006 1-12 2005
Turnover, EUR million 17.3 2.7
Net fair value gains on investment
property, EUR million 8.7 1.7
Operating profit, EUR million 16.8 3.5
Gross rental income, EUR million 15.9 2.5
Net rental income, EUR million 9.3 1.8
Net rental yield, % 5.2 3.2
Market value of property portfolio,
EUR million 354.8 76.1
Capital expenditure, EUR million 267.2 77.9

At the beginning of the reporting period, Citycon acquired retail centres in
Lindome, Backa, Hindås, Landvetter and Floda in the Greater Gothenburg Area in
Sweden, for an approximate total of EUR 25.7 million. In September, Citycon
acquired the majority of shares in the Stenungs Torg shopping centre north of
Gothenburg, for EUR 37.2 million. Investments include the transaction costs
related to the acquisitions.

In the Greater Stockholm Area, Citycon acquired the Jakobsbergs Centrum
shopping centre for EUR 106.6 million in September. In August, the company
acquired a shopping centre project in Liljeholmen, Stockholm, for EUR 60.6
million, comprising a 20,000-square-metre office and commercial building and a
substantial permitted building volume for constructing a new shopping centre.
The company is planning to extend the building's leasable area to four to
fivefold.

Also in the Greater Stockholm Area, Citycon is developing and refurbishing the
Åkersberga shopping centre. Citycon's share of this investment project totals
about SEK 247 million (around EUR 27 million) and includes modernisation and an
extension of 9,000 square metres. The project will be completed during the spring
of 2009. Citycon has undertaken to buy the remaining holding in the shopping
centre once the development project has been completed.

The new acquisitions made in Sweden in 2006 were worth a total of EUR 260.7
million, while development investments totalled EUR 6.5 million.

Close to the end of the financial year, Citycon announced the acquisition of the
Tumba Centrum shopping centre, located south of Stockholm, for approximately EUR
60.8 million. The transaction was finalised in January 2007.

After closing of the Tumba Centrum acquisition, Citycon owns 6 (3) shopping
centres and 7 (1) other retail properties in Sweden, all of them located in the
Greater Stockholm and Gothenburg areas.

Baltic Countries

Citycon owns two shopping centres in the Baltic countries, Rocca al Mare in
Tallinn, Estonia, and Mandarinas in Vilnius, Lithuania.

Citycon expanded its operations in the Baltic countries, to Lithuania in 2006 by
acquiring the shopping centre Mandarinas at a debt-free purchase price of
approximately EUR 14.9 million with the acquisition costs. Completed in September
2005, the Mandarinas shopping centre has a leasable area of approximately 7,900
square metres.

Reported net rental income from operations in the Baltic countries increased by
191.1 per cent, to EUR 4.8 million and net rental income in the region accounted
for 5.7 per cent of Citycon's total net rental income.

Lease portfolio summary
1-12 2006 1-12 2005
Number of leases started during the period 16 14
Total area of leases started, sq.m. 2,900 2,630
Occupancy rate at end of the period, % 100.0 100.0
Average length of lease portfolio at
the end of the period, year 3.3 3.4

Financial performance, Baltic Countries
1-12 2006 1-12 2005
Turnover, EUR million 6.2 2.1
Net fair value gains on investment
property, EUR million 6.6 -1.2
Operating profit, EUR million 10.9 0.3
Gross rental income, EUR million 6.1 1.8
Net rental income, EUR million 4.8 1.6
Net rental yield, % 8.4 9.1
Market value of property portfolio,
EUR million 83.3 60.5
Capital expenditure, EUR million 16.2 61.6

The new acquisitions made in the Baltic countries in 2006 were worth a total of
EUR 15.9 million, while development investments totalled EUR 0.4 million.

The company is planning to extend the shopping centre Rocca al Mare by some
25,000 sq.m. The extension project is due to start in 2007.

Due to the limited size, competition and limited availability of suitable
properties in the Baltic market, Citycon has proceeded with caution in making
investments. However, the company is constantly searching for potential
acquisition opportunities in the region.

Human Resources and Administrative Expenses

At period-end, Citycon Group had a total of 73 (52) employees, 59 of whom worked
in Finland, eight in Sweden, five in Estonia and one in Lithuania. Administrative
expenses grew to EUR 12.9 million (EUR 8.3 million), including EUR 0.9 million
(EUR 0.2 million) share-based non-cash calculatory expenses related to employee
stock options, and EUR 0.6 million in transaction costs related to the disposal
of non-core properties. Expenses also increased due to the expansion of company
operations.

Wages and salaries paid by the Group totalled EUR 4.6 million (EUR 3.1 million),
of which those paid to Chief Executive Officer accounted for EUR 0.3 million (EUR
0.2 million) and Board members EUR 0.5 million (EUR 0.3 million). Wages and
salaries paid by the parent company totalled EUR 4.2 million (EUR 2.8 million),
of which those paid to the CEO accounted for EUR 0.3 million (EUR 0.2 million)
and Board members EUR 0.5 million (EUR 0.3 million).

Turnover and Profit

Turnover for the period came to EUR 119.4 million (EUR 92.2 million), mainly
comprising the rental income generated by Citycon's retail properties, of which
gross rental income accounted for 96.5 per cent (96.6 per cent).

Operating profit rose to EUR 196.5 million (EUR 105.2 million). Profit before tax
came to EUR 165.6 million (EUR 74.2 million) and profit after tax was EUR 126.4
million (EUR 59.8 million). The increase in operating profit was mainly due to
changes in the fair value of the property portfolio, and the operating profit
generated by acquired properties.

The effect of fair value gains and gains on sale of investment properties and
other non-recurring items with the related tax effect on the profit for the
period attributable to parent company shareholders was EUR 92.5 million (EUR 33.5
million). Taking this into account, the profit for the period attributable to
parent company shareholders after tax is EUR 6.7 million above the previous
year's level. Greater earnings resulted mainly from increase in net rental
income.

Earnings per share came to EUR 0.78 (EUR 0.47). Earnings per share excluding the
fair value gains and gains on sale of investment property and other non-recurring
items and the related tax effect were EUR 0.20 (EUR 0.20).

Net cash from operating activities per share amounted to EUR 0.20 (EUR 0.19).

Capital Expenditure

Citycon's gross capital expenditure totalled EUR 436.4 million (EUR 178.5
million), of which property acquisitions accounted for EUR 400.9 million (EUR
171.0 million), property development for EUR 35.4 million (EUR 7.4 million) and
other investments for EUR 0.2 million (EUR 0.1 million).

Capital expenditure during the reporting period were financed mainly through the
EUR 75 million rights issue, by issuing convertible bonds of EUR 110 million,
using approximately EUR 74 million of proceeds from disposal of non-core
properties and raising new interest-bearing debt of approximately EUR 143
million.

Balance Sheet and Financial Position

The year-end balance sheet total stood at EUR 1,486.4 million (EUR 983.1
million), and liabilities totalled EUR 906.1 million (EUR 622.9 million), with
short-term liabilities accounting for EUR 134.4 million (EUR 74.4 million). The
Group's financial position remained at a healthy level.

Year on year, reported interest-bearing liabilities increased by EUR 233.4
million to EUR 814.0 million (EUR 580.5 million). The fair value of the Group's
interest-bearing liabilities stood at EUR 832.5 million (EUR 580.5 million) while
the cash and cash equivalents were EUR 21.3 million (EUR 15.6 million) leading to
fair value of net interest-bearing liabilities of EUR 811.2 million (EUR 564.9
million) as of 31 December 2006.

The weighted average interest rate of the interest-bearing liabilities was 4.35
per cent (4.83 per cent) during 2006. The average loan maturity, weighted
according to loan principals, extended to 4.8 years (2.7 years) while the average
time to fixing was 4.1 years (2.5 years).

The Group's equity ratio was 39.1 per cent (36.7 per cent). Interest cover, i.e.
the previous 12 months' profit before interest expenses, tax, depreciation,
changes in fair value and non-recurring items relative to net financial expenses,
was 2.3.

Period-end gearing stood at 136.6 per cent (156.8 per cent). This fall was due to
the company's strong financial performance and equity financing transactions
carried out during the reporting period.

During 2006 Citycon increased the interest hedging ratio of its debt portfolio
and, at the end of 2006, its interest-bearing liabilities included 77.5 per cent
(87.3 per cent) in floating-rate loans, of which 76.2 per cent (69.8 per cent)
had been converted to fixed-rate ones by means of interest rate swaps. Taking
into account the interest rate swaps, 81.6 per cent (70.0 per cent) of the
company's period-end interest-bearing liabilities were at fixed interest rates.
On 31 December 2006, the nominal amount of interest rate swaps totalled EUR 541.7
million (EUR 336.5 million) while the fair value of derivatives came to EUR -2.0
million (EUR -14.7 million). Citycon applies hedge accounting and, thus, fair
value changes of interest rate swaps are recognised under equity.

Net financial expenses decreased by EUR 0.2 million, to EUR 30.9 million (EUR
31.1 million), which include EUR 0.9 million (EUR 5.7 million) in non-recurring
expenses relating to the refinancing of a bank loan. The growth in like-for-like
net financial expenses was mainly due to an increase in interest-bearing
liabilities. Net financial expenses in income statement for 2006 include EUR 0.7
million (EUR 0.0 million) in non-cash expenses related to the option component in
the convertible bonds.

Capital Market Transactions

During the financial year, Citycon carried out the following two capital market
transactions successfully: subordinated convertible bonds placed with
institutional investors and a rights issue. These operations strengthened the
company's balance sheet and will support the implementation of its growth
strategy.

In July, Citycon's Board of Directors decided to offer EUR 110 million worth of
subordinated convertible bonds to international institutional investors. The
convertible bonds have been listed on the Helsinki Stock Exchange since 22 August
2006. With a maturity of seven years (the maturity date on 2 August 2013), they
bear an annual fixed interest rate of 4.5 per cent and their initial conversion
price is EUR 4.3432, the conversion period being from 12 September 2006 until 27
July 2013.

Waiving the shareholders' pre-emptive rights, the issue of the convertible bonds
was based on the authorisation given by Citycon's Annual General Meeting on 14
March 2006. The conversion of the convertible bonds may increase the company's
share capital by a maximum of EUR 34,191,378.45 and the number of shares by a
maximum of 25,326,947.

In March/April, Citycon carried out a rights issue, through which the company
raised a total of approximately EUR 75 million, offering shareholders the right
to subscribe for one new share against every five shares they hold. A total of
27,274,949 new shares were subscribed at a subscription price of EUR 2.75 per
share, equalling approximately 99.4 per cent of the shares offered.

More detailed information on the convertible bonds and the rights issue is given
in Citycon's stock exchange releases published during the financial year and
available on the company's website at www.citycon.fi.

Debt-financing Transactions

During the reporting period, the company renegotiated better terms and conditions
for its debt financing by prolonging the loan portfolio's average maturity and
increasing the amount of debt in its disposal. The new debt financing
transactions will allow the company to invest flexibly in line with its strategy.

In February 2006, the company signed a new commercial paper programme worth EUR
100 million, replacing its previous commercial paper programmes worth EUR 60
million.

In August, the company signed a EUR 600 million credit agreement with an
international banking group. The loan was used to re-finance a bank loan worth
EUR 450 million raised in 2004 and maturing in 2009, and to finance property
acquisitions. This credit facility will reduce the company's annual finance
costs, in comparison with the equivalent refinanced loan, by around EUR 0.7
million.

Risk Management and Environmental Responsibility

Risk management aims to help ensure that Citycon meets its strategic and
operational goals.

The company's risk-management process involves identifying business-related
risks, analysing their significance, planning and implementing risk-management
measures, reporting on risks on a regular basis and controlling risks. In the
autumn of 2006, Citycon carried out an extensive risk analysis, involving the
identification of risks and their management before their entry in a risk
register.

Citycon is continuously perfecting its risk-management process and aims to adopt
an Enterprise Risk Management (ERM) programme during 2007. The company updates
its guidelines for risk-management principles, approved by the Board of
Directors, on a regular basis in response to possible changes in its business.

Citycon's major business-critical risks relate to those associated with its
lessees' ability to pay rents and those associated with its property portfolio,
retail properties' value development and business expansion, as well as financial
risks.

Energy-use management forms an integral part of property companies' operating-
cost control and environmental responsibility. Citycon is involved in KRESS, the
energy conservation agreement for the property and construction sector, aimed at
reducing properties' energy consumption. Other major environmental effects relate
to land use, property maintenance and waste management.

Citycon's operations are guided by a lifecycle approach that pays particular
attention to the timing of renovation and other types of property repair. In its
property development projects, Citycon strives, for instance, to recycle
demolition and construction waste as efficiently as possible.

Legal Proceedings

In early 2006, based on competitive tendering, Citycon Oyj submitted a joint
tender with Skanska Talonrakennus Oy for the construction of a new shopping
centre and the related areas, in accordance with a general plan for the Ratina
region in Tampere. On 3 April 2006, the City of Tampere made the decision to opt
for a consortium comprising Kapiteeli and Sponda to implement the project.
Citycon Oyj's and Skanska Talonrakennus Oy's quotation for this project totalled
over EUR 31 million while the selected consortium quoted EUR 20 million.

On 27 April 2006, Citycon submitted a claim for correction to the City Board of
Tampere, demanding a reversal of the decision and requesting that Citycon Oyj and
Skanska Talonrakennus Oy be selected to develop the project. Citycon has also
filed a petition with the Market Court, whereby it is demanding that, in the
first instance, the decision be reversed and, secondarily, the City of Tampere
carry out a new comparison of tenders. In addition, the petition requests a ban
on signing the project contract and a discontinuance of the project procurement
process.

In June, the Market Court imposed a temporary preservation order and a
conditional fine on the City of Tampere. The City of Tampere filed a complaint
with the Supreme Administrative Court, which upheld the Market Court's decision
by a ruling issued in November.

The Market Court's ruling on the actual petition is pending.

Annual General Meeting

Citycon's Annual General Meeting (AGM), held in Helsinki on 14 March 2006,
adopted the financial statements of Citycon Oyj and the Citycon Group for 2005
and discharged the Board of Directors and the CEO from liability. The AGM decided
that a per-share dividend of EUR 0.14 be paid for 2005. The dividends were paid
out on 24 March 2006.

Board of Directors

With the number of Board members remaining at eight, the AGM re-elected the
following Board members for a one-year term: Amir Gal, Raimo Korpinen, Tuomo
Lähdesmäki, Carl G. Nordman, Claes Ottosson, Dor J. Segal and Thomas W. Wernink.
Gideon Bolotowsky (58), M.Sc. (Eng.), Finnish citizen, was elected a new Board
member. As a Board member from 2000 and Board Chairman from 2002, Stig-Erik
Bergström was not available for re-election. At its first meeting, the Board
elected Thomas W. Wernink Chairman and Tuomo Lähdesmäki Deputy Chairman.

Auditor

The AGM decided to alter Article 9 of the Articles of Association, regarding
company auditors, in such a way that Citycon has one auditor, which must be a
firm of authorised public accountants certified by the Central Chamber of
Commerce of Finland. Accordingly, the AGM elected Ernst & Young Oy, Authorised
Public Accountants, as the company's auditor for 2006, with Tuija Korpelainen
acting as chief auditor, as notified by Ernst & Young Oy.

Board Authorisations

The AGM authorised the Board of Directors to decide to increase the share capital
through one or several rights issues by offering a maximum of 50 million new
shares at a nominal per-share value of EUR 1.35 for subscription by shareholders.
The Board exercised this authorisation in March when it decided on a share issue
based on the shareholders' pre-emptive subscription right. A total of 27.3
million shares were subscribed.

In addition, the AGM authorised the Board to decide to issue one or several
convertible bonds, issue stock options and increase the company's share capital
through one or several share issues, waiving the shareholders' pre-emptive
subscription right, by issuing a maximum of 27.4 million new shares. The Board
exercised this authorisation in July when it decided to issue subordinated
convertible bonds placed with institutional investors. Based on the bonds,
maturing in August 2013, the company's share capital may increase by EUR 34.2
million at the most, through the issue of a maximum of 25.3 million shares.

At the end of the reporting period, the Board had no other authorisations.

Shareholders, Share Capital and Shares

Citycon is a Mid Cap company under the Financial sector on the OMX Nordic
Exchange its shares being listed on the Helsinki Stock Exchange since November
1988. Its trading code is CTY1S and shares are traded in euros. The ISIN code
used in international securities clearing is FI0009002471.

Shareholders

On 31 December 2006, Citycon had a total of 1,721 (1,402) registered
shareholders, of which nine were account managers of nominee-registered shares.
Nominee-registered shareholders, mainly international investors, held 155.6
million (125.5 million) shares, or 93.1 per cent (92.0 per cent) of shares and
voting rights. In 2006, the company did not receive any statutory notices
regarding changes in shareholdings.

Trading and share performance

In 2006, the number of Citycon shares traded on the Helsinki Stock Exchange
totalled 51.2 million (40.7 million) at a total value of EUR 197.6 million (EUR
119.2 million). The highest quotation was EUR 5.09 (EUR 3.50) and the lowest EUR
3.02 (EUR 2.36). The reported trade-weighted average price was EUR 3.86 (EUR
2.95), and the share closed at EUR 5.05 (EUR 3.11). The company's market
capitalisation at the end of the financial year totalled EUR 844.3 million (EUR
424.1 million).

Share Capital

Under the Articles of Association, Citycon's minimum share capital totals EUR 100
million and maximum share capital EUR 500 million, within which limits the
company may reduce or increase its share capital without altering its Articles of
Association. The company has a single series of shares, with each share entitling
its holder to one vote at the shareholders' meeting.

At the beginning of 2006, Citycon had a share capital of EUR 184.1 million and
the number of shares totalled 136.4 million. The reporting period saw Citycon
increase its share capital through a rights issue and share subscriptions based
on stock options by a total of EUR 41.6 million and 30.8 million shares. The
table below shows the changes in share capital in more detail. The company's
period-end registered share capital amounted to EUR 225.7 million and the number
of shares totalled 167.2 million, each share bearing a nominal value of EUR 1.35.

Changes in share capital from 1 January to 31 December 2006

Date
2006/Reason Change, Change Share Number
EUR in no. capital of shares
of shares in EUR
1 Jan. 184,115,724.30 136,382,018
16 Feb.
Increase 1,012,945.50 750,330 185,128,669.80 137,132,348
(stock options)

28 March
Increase 20,250.00 15,000 185,148,919.80 137,147,348
(stock options)
18 April
Increase 737,572.50 546,350 185,886,492.30 137,693,698
(stock options)
28 April

Increase 36,821,181.15 27,274,949 222,707,673.45 164,968,647
(rights issue)
4 May
Increase 51,629.40 38,244 222,759,302.85 165,006,891
(stock options)
20 June
Increase 22,126.50 16,390 222,781,429.35 165,023,281
(stock options)
27 July
Increase 363,734.55 269,433 223,145,163.90 165,292,714
(stock options)
21 Sept.
Increase 1,619,391.15 1,199,549 224,764,555.05 166,492,263
(stock options)
25 Oct.
Increase 100,934.10 74,766 224,865,489.15 166,567,029
(stock options)
14 Dec.
Increase 831,803.85 616,151 225,697,293.00 167,183,180
(stock options)
31 Dec. 225,697,293.00 167,183,180

Shares Not Transferred into the Book-entry Securities System

At the end of August, Citycon Oyj sold the company's shares not transferred into
the book-entry securities system, for the benefit of their holders. The resulting
income, less expenses incurred by the company due to notifications and sales, was
lodged with the State Provincial Office of Southern Finland on 1 September 2006.
A holder of the sold shares or another assignee is entitled to a share of this
income in proportion to his/her shareholding, at EUR 3.52 per share. In order to
receive his/her share of this income, the shareholder or another assignee must
present a claim for it and hand over his/her share certificates and any proof of
title to a Nordea Bank Finland Plc branch no later than 31 August 2016.

Treasury shares

During the financial year, Citycon Oyj held no treasury shares.

Stock Options

Citycon has two stock-option schemes in force, the 1999 A/B/C scheme and the 2004
A/B/C scheme, which form part of the Group-wide employee incentive and motivation
programme.

In 2006, the 2004 stock options were transferred to the book-entry securities
system and 2004 A stock options were listed on the Helsinki Stock Exchange as
their share subscription period began on 1 September 2006. The 1999 stock options
are also listed on the Helsinki Stock Exchange.

Moreover, the Board of Directors decided to issue C stock options under the 2004
stock-option scheme to Group employees. A total of 1,250,000 options were granted
to 60 persons.

Citycon has amended the terms and conditions of its stock-option schemes due to
the rights issue carried out during the period. Amendments made to the share
subscription ratios and prices also apply to the maximum numbers of shares and
increases in the share capital with respect to shares subscribed under option
rights. The new subscription ratios and prices and numbers of option rights are
listed in the tables below.

1999 Stock Options

The Extraordinary General Meeting (EGM) of 4 November 1999 decided to grant a
maximum of 5,500,000 stock options to Citycon employees (5,327,500 stock options)
and to Veniamo-Invest Oy, a Citycon subsidiary (172,500 stock options).

1999 Number Subscription Subscription Share Share
Stock ratio price subscription subscription
Options option/share per share, period period
in EUR begins ends
1999A 1,800,000 1:1.0927 1.35 1 Sept. 2000 30 Sept. 2007
1999B 1,800,000 1:1.0927 1.35 1 Sept. 2002 30 Sept. 2007
1999C 1,727,500 1:1.0927 1.35 1 Sept. 2004 30 Sept. 2007
Veniamo-Invest Oy
172,500 1:1.0927 1.35 1 Sept. 2004 30 Sept. 2007
Total 5,500,000

In accordance with the amended terms and conditions, the 1999 stock options
entitle their holders to subscribe for a maximum of 5,820,418 shares, with the
result that the company's share capital may increase by a maximum of EUR
7,857,564.30. By the end of 2006, a total of 4,805,930 shares had been subscribed
based on these options including 63,525 new shares subscribed in December 2006.

In 2006, the total number of 1999 stock options traded on the Helsinki Stock
Exchange came to 2.4 million (2.8 million), their value totalling EUR 6.2 million
(EUR 4.4 million). The highest quotation was EUR 4.00 (EUR 2.09) and the lowest
EUR 1.81 (EUR 0.88). During the financial year, the number of new Citycon shares
subscribed on the basis of the 1999 stock-option scheme totalled 1,078,509 at a
per-share subscription price of EUR 1.35. The new shares entitle their holders to
a dividend for the financial year 2006. The share capital increase corresponding
to the shares subscribed in December has not yet been registered with the Finnish
Trade Register.

2004 Stock Options

The Extraordinary General Meeting (EGM) of 15 March 2004 decided to grant a
maximum of 3,900,000 stock options. At the end of the financial year, personnel
held 3,380,000 A/B/C stock options and Veniamo-Invest Oy 520,000.

2004 Number Subscription Subscription Share Share
Stock ratio price subscription subscription
Options option/share per share, period period
in EUR(* begins ends
2004A 1,040,000 1:1.0611 2.2336 1 Sept. 2006 31 March 2009
2004B 1,090,000 1:1.0611 2.6766 1 Sept. 2007 31 March 2010
2004C 1,250,000 1:1.0611 4.62 1 Sept. 2008 31 March 2011
2004A 260,000 1:1.0611 2.2336 1 Sept. 2006 31 March 2009
Veniamo-Invest Oy
2004B 210,000 1:1.0611 2.6766 1 Sept. 2007 31 March 2010
Veniamo-Invest Oy
2004C 50,000 1:1.0611 4.62 1 Sept. 2008 31 March 2011
Veniamo-Invest Oy
Total 3,900,000

*) The subscription price is reduced by 50 per cent of the amount of annual
dividends paid. However, the share subscription price will always amount to at
least the share's par value of EUR 1.35.

In accordance with the amended terms and conditions, the 2004 stock options
entitle their holders to subscribe for a maximum of 4,138,290 shares, with the
result that the company's share capital may increase by a maximum of EUR
5,586,691.50. During the financial year, the number of new Citycon shares
subscribed on the basis of the 2004A stock-option scheme totalled 89,715 at a per-
share subscription price of EUR 2.2336. This figure comprises the 27,747 new
shares subscribed in December. The new shares entitle their holders to a dividend
for the financial year 2006. The share capital increase corresponding to the
shares subscribed in December has not yet been registered with the Finnish Trade
Register.

In September-December, the total number of 2004A stock options, listed in early
September and traded on the Helsinki Stock Exchange, came to 0.2 million, their
value totalling EUR 0.4 million. The highest quotation was EUR 2.93 and the
lowest EUR 1.66.

Shares and Stock Options held by the Board of Directors and Management

On 31 December 2006, members of the Board of Directors, the CEO and other members
of the Corporate Management Committee, and their related parties held a total of
223,871 Citycon shares, accounting for 0.13 per cent of all shares and voting
rights.

On 31 December 2006, Citycon's CEO held 73,214 1999A/B/C stock options, 150,000
2004A stock options, 140,000 2004B stock options and 140,000 2004C stock options.
Other members of the Corporate Management Committee held a total of 32,000
1999A/B/C stock options, 150,000 2004A stock options, 280,000 2004B stock options
and 280,000 2004C stock options. Board members are not included in the company's
stock option schemes.

Up-to-date information on the share and stock option holdings of the members of
Citycon's Board of Directors and Corporate Management Committee is available on
the company's website at www.citycon.fi.

Events after the Financial Year

Extraordinary General Meeting (EGM)

Citycon's EGM, held in Helsinki on 26 January 2007, authorised the Board of
Directors to decide on a directed share issue and the terms and conditions
thereof. The total number of shares to be issued may not exceed 25,000,000
shares. The authorisation will remain valid for 5 years as of the date of said
EGM.
The authorisation was registered with the Finnish Trade Register on 2 February
2007 with the result that the authorisations granted to the Board of Directors by
the AGM of 14 March 2006 became ineffective.

Acquisition of a Shopping Centre

In December 2006, Citycon announced that it had signed an agreement for the
acquisition of the Tumba Centrum shopping centre, located in the municipality of
Botkyrka in the Greater Stockholm Area. The transaction was finalised on 31
January 2007 at a debt-free purchase price of SEK 547.7 million (approximately
EUR 60.5 million).

Board proposal for dividend payment

The Board of Directors proposes to the Annual General Meeting of 13 March 2007
that a per-share dividend of EUR 0.14 be paid out for the financial year ending
on 31 December 2006, that the dividend record date be 16 March 2007 and that the
dividend payment date be 23 March 2007.

Outlook

While competition for properties intensifies Citycon continues to seek
acquisition and development opportunities and to pursue its expansion strategy.
Due to the acquisitions and development projects planned and underway during
2006, Citycon expects the operating profit excluding fair value gains and gains
on sale of investment properties to increase during 2007.

Helsinki, 8 February 2007

Citycon Oyj

Board of Directors

Condensed Consolidated Income Statement, IFRS
EUR MILLION 10-12 10-12 1-12 % 1-12 %
2006 2005 2006 2005
Gross rental income 31.7 24.6 115.1 96.5 89.1 96.6
Service charge income 1.3 1.2 4.2 3.5 3.1 3.4
Turnover 33.0 25.7 119.4 100.0 92.2 100.0
Property operating
expenses 10.6 6.8 36.0 30.2 24.7 26.8
Other expenses from
leasing operations 0.2 0.1 0.6 0.5 0.5 0.5
Net rental income 22.1 18.8 82.8 69.3 67.0 72.7
Administrative expenses 3.2 2.4 12.9 10.8 8.3 9.0
Other operating income
and expenses 0.3 0.1 0.6 0.5 0.3 0.3
Net fair value gains on
investment property 23.1 29.9 120.1 100.6 45.9 49.8
Net gains on sale of
investment property 0.1 - 5.9 0.0 0.3 0.0

Operating profit 42.5 46.4 196.5 164.6 105.2 114.1

Net financial income
and expenses 8.7 5.6 30.9 25.9 31.1 33.7
Profit before taxes 33.8 40.8 165.6 138.8 74.2 80.4
Current taxes -1.0 -1.3 -7.4 -6.2 -3.5 -3.8
Change in
deferred taxes -6.3 -4.7 -31.8 -26.7 -10.8 -11.8
Profit for the period 26.4 34.8 126.4 105.9 59.8 64.8

Attributable to
Parent company
shareholders 24.9 34.3 124.9 59.2

Minority interest 1.5 0.5 1.5 0.6

Earnings per share
(basic), EUR 0.15 0.24 0.78 0.47
Earnings per share
(diluted), EUR 0.14 0.24 0.74 0.46

Condensed Consolidated Balance Sheet, IFRS
EUR MILLION 31 Dec. 2006 31 Dec. 2005
Assets

Non-current assets
Investment property 1,447.9 956.6
Property, plant and equipment 0.6 0.7
Other non-current assets 4.8 0.2
Total non-current assets 1,453.3 957.6

Current assets
Trade and other receivables 11.8 9.9
Cash and cash equivalents 21.3 15.6
Total current assets 33.1 25.5

Total assets 1,486.4 983.1

Liabilities and Shareholders' Equity

Equity attributable to parent company shareholders
Share capital 225.7 184.1
Share issue 0.1 1.1
Share premium fund and other reserves 131.1 85.4
Fair value reserve -1.3 -10.5
Retained earnings 209.7 96.5
Total equity attributable to parent
company shareholders 565.3 356.6
Minority interest 15.0 3.6
Total shareholders' equity 580.3 360.2

Liabilities

Long-term interest-bearing liabilities 726.3 528.5
Long-term non-interest bearing liabilities 4.9 14.2
Deferred tax liabilities 40.4 5.8
Total long-term liabilities 771.7 548.4

Short-term interest-bearing liabilities 87.6 52.1
Trade and other payables 46.8 22.3
Total short-term liabilities 134.4 74.4

Total liabilities 906.1 622.9

Total liabilities and
shareholders' equity 1,486.4 983.1

Equity attributable to parent company shareholders

Share Share Share Fair Treasury Retained
capital issue premium value shares earnings
fund reserve
and other
reserves
Balance at 1 Jan. 2005 156.8 - 41.5 -13.3 -4.7 57.4
Cash flow hedges 2.8
Profit for the period 59.2
Total recognized income and
expense for the period 2.8 59.2
Change in share capital -5.2 5.2 4.7 -4.7
Dividends -15.7
Share issue 31.3 38.6
Share subscriptions based
on stock options 1.2 1.1 0.2
Other changes 0.2
Balance at 31 Dec. 2005 184.1 1.1 85.4 -10.5 - 96.5

Balance at 1 Jan. 2006 184.1 1.1 85.4 -10.5 - 96.5
Cash flow hedges 9.2
Profit for the period 124.9
Total recognized income and
expense for the period
Change in share capital 36.8 37.1
Dividends -6.6 -12.6
Share subscriptions based
on stock options 4.8 -0.9 0.1
Equity instrument of
convertible bond 15.1
Other changes 0.9
Balance at 31 Dec. 2006 225.7 0.1 131.1 -1.3 0.0 209.7

Equity Minority Shareholders'
attributable interest equity,
to parent company total
shareholders
Balance at 1 Jan. 2005 237.7 - 237.7
Cash flow hedges 2.8 2.8
Profit for the period 59.2 0.6 59.8
Total recognized income and
expense for the period 62.0 0.6 62.6
Change in share capital 0.0 0.0
Dividends -15.7 -15.7
Share issue 69.9 69.9
Share subscriptions based
on stock options 2.5 2.5
Other changes 0.2 3.0 3.2
Balance at 31 Dec. 2005 356.6 3.6 360.2

Balance at 1 Jan. 2006 356.6 3.6 360.2
Cash flow hedges 9.2 9.2
Profit for the period 124.9 1.5 126.4
Total recognized income and
expense for the period 0.0 0.0
Change in share capital 73.9 73.9
Dividends -19.2 -19.2
Share subscriptions based
on stock options 3.9 3.9
Equity instrument of
convertible bond 15.1 15.1
Other changes 0.9 9.9 10.7
Balance at 31 Dec. 2006 565.3 15.0 580.3

Condensed Consolidated Cash Flow Statement, IFRS
EUR MILLION 1-12 2006 1-12 2005
Cash flow from operating activities
Profit before taxes 165.6 74.2
Adjustments -94.0 -14.1
Cash flow before change in working capital 71.6 60.1
Change in working capital -0.5 1.9

Cash generated from operations 71.1 62.0
Paid interest and other financial charges -34.1 -32.3
Received interest and other financial income 0.9 0.4
Taxes paid -5.9 -5.2
Net cash from operating activities 32.0 24.8

Cash flow from investing activities
Acquisition of subsidiaries,
less cash acquired -331.8 -92.6
Acquisition of investment property -33.6 -
Capital expenditure on investment properties,
PP&E and intangible assets -35.6 -7.2
Sale of investment property 73.9 2.8
Proceeds from sale of other investments - 1.0
Net cash used in investing activities -327.1 -96.1

Cash flow from financing activities
Proceeds from share issue 77.4 74.4
Proceeds from short-term loans 421.2 134.6
Repayments of short-term loans -392.2 -108.6
Proceeds from long-term loans 675.3 199.7
Repayments of long-term loans -461.8 -205.6
Dividends paid -19.2 -15.7
Net cash from/used in financing activities 300.8 78.9

Net change in cash and cash equivalents 5.7 7.7
Cash and cash equivalents at period-start 15.6 7.9
Effects of exchange rate changes - -
Cash and cash equivalents at period-end 21.3 15.6

Segment Information
EUR MILLION 10-12 2006 10-12 2005 1-12 2006 1-12 2005
Turnover
Finland 24.0 23.0 95.8 87.4
Sweden 7.2 1.5 17.3 2.7
Baltic Countries 1.8 1.3 6.2 2.1
Total 33.0 25.7 119.4 92.2

Operating Profit
Finland 30.2 43.8 176.1 106.6
Sweden 11.9 2.5 16.8 3.5
Baltic Countries 2.2 2.1 10.9 0.3
Unallocated -1.8 -1.9 -7.2 -5.2
Total 42.5 46.4 196.5 105.2

Key Figures
1-12 2006 1-12 2005
Earnings per share (basic), EUR 0.78 0.47
Earnings per share (diluted), EUR (EPRA EPS) 0.74 0.46
Equity per share, EUR (EPRA NAV) 3.38 2.45
Return on equity (ROE), % 25.8 22.5
Return on investment (ROI), % 16.8 13.5
Equity ratio, % 39.1 36.7

Investment property
31 Dec. 2006 31 Dec. 2005
At period-start 956.6 738.7
Additions 436.2 175.4
Disposals -67.9 -3.4
Net fair value gains 120.1 45.9
Exchange differences 2.9 -
At period-end 1447.9 956.6

Consolidated Contingent Liabilities
EUR MILLION 31 Dec. 2006 31 Dec. 2005
Mortgages on land and buildings 21.1 7.8
Bank guarantees 37.1 -

Group's Derivative Financial Instruments
EUR MILLION 31 Dec. 2006 31 Dec. 2005
Nominal Fair Nominal Fair
amount value amount value
Interest rate derivatives
Interest rate swaps
Maturity:
less than 1 year 50.0 0.5 78.2 -0.1
1-2 years 40.0 0.0 50.0 -1.5
2-3 years 86.0 -2.6 125.3 -6.3
3-4 years 83.0 -2.7 83.0 -6.8
4-5 years 40.0 -0.8 0.0 0.0
over 5 years 242.7 3.8 0.0 0.0
Total 541.7 -2.0 336.5 -14.7

Foreign exchange derivatives
Forward agreements
Maturity:
less than 1 year 14.8 0.0 0.0 0.0
Total 14.8 0.0 0.0 0.0

The fair value of derivative financial instruments represents the market value of
the instrument with prices prevailing on the balance sheet date. Derivative
financial instruments are used in hedging the interest rate risk of the interest
bearing liabilities and foreign currency risk. The fair values include accrued
interest expenses of EUR 0.2 million (EUR 0.5 million) which are recognized in
the interest expenses in income statement. The fair values include foreign
exchange loss of EUR -1.9 million (EUR 0.0 million) which is recognized in income
statement.
Hedge accounting is applied for interest rates swaps which have nominal amount of
EUR 491.7 million (EUR 336.5 million). The fair value loss recognized in the fair
value reserve under shareholders' equity taking account the tax effect totals EUR
-1.3 million (EUR -10.5 million).

The figures are unaudited.

Financial reports in 2007

Citycon will publish its Annual Report for 2006, including the Financial
Statements, on its website in week 9 and its printed version in week 10.

Citycon will issue three interim reports during the financial year 2007 as
follows:

January-March 2007 on Thursday, 26 April, noon,
January-June 2007 on Friday, 20 July, noon, and
January-September 2007 on Thursday, 18 October, noon.

Annual General Meeting

Citycon Oyj will hold its AGM at Hall B in Finlandia Hall, Mannerheimintie 13e,
Helsinki, Finland, on 13 March 2007, starting at 2.00 p.m.

Further information for investors is available on Citycon's website at
www.citycon.fi.

For further information, please contact:
Mr Petri Olkinuora, CEO
Tel. +358 9 6803 6738 or +358 400 333 256
petri.olkinuora@citycon.fi

Mr Eero Sihvonen, CFO
Tel. +358 9 6803 6730 or +358 50 557 9137
eero.sihvonen@citycon.fi

Distribution:
Helsinki Stock Exchange
Major media
www.citycon.fi