Citycon Oyj Stock Exchange Release 21 April 2010 at 09.00 hrs
Citycon Oyj's Interim Report for 1 January - 31 March 2010
Summary of the First Quarter of 2010 Compared with the Previous Quarter
- Turnover increased and came to EUR 49.5 million (Q4/2009: EUR 48.9 million)
due mainly to added rental income from the newly opened Liljeholmstorget in
Stockholm and redeveloped Rocca al Mare in Tallinn, while the turnover growth
was reduced by the start-up of new (re)development projects.
- Net rental income decreased by 3.2 per cent to EUR 30.6 million (EUR 31.6
million) due mainly to higher property operating expenses than in the previous
quarter, reflecting common seasonal fluctuation and the exceptionally cold and
snowy winter.
- Earnings per share were EUR 0.06 (EUR -0.11).
- Direct result per share (diluted) was EUR 0.05 (EUR 0.06).
- The fair value change of investment properties was EUR 0.8 million (EUR -38.6
million). The fair value of investment properties was EUR 2,193.5 million (EUR
2,147.4 million).
- According to the external appraiser, the average net yield requirement for
investment properties remained at the previous quarter's level at 6.6 per cent
at the end of the reporting period (6.6%).
- Net financial expenses increased to EUR 13.1 million (EUR 12.0 million) due
mainly to lower interest capitalization after completion of Rocca al Mare and
Liljeholmstorget (re)development projects.
- On the basis of Citycon's loan agreement covenants, Citycon's interest cover
ratio was 2.3x (2.3x) and equity ratio 39.2 per cent (40.6%).
- Three new (re)development projects were started during the reporting period:
the refurbishment of the Espoontori shopping centre in Espoo and the Forum
shopping centre in Jyväskylä and the construction of a new shopping centre in
Myllypuro in Helsinki replacing the old retail property.
- The Liljeholmstorget shopping centre was awarded the platinum LEED®
(Leadership in Energy and Environmental Design) environmental certificate, the
first platinum certificate awarded to a European shopping centre.
Summary of the First Quarter of 2010 Compared with the Corresponding Quarter of
Last Year
- Turnover increased by 7.9 per cent, to EUR 49.5 million (Q1/2009:
EUR 45.9 million), due to growth in gross leasable area and to the development
of retail properties. Turnover growth was reduced by slightly higher vacancy and
the start-up of new (re)development projects.
- Profit/loss before taxes was EUR 17.2 million (EUR -18.1 million), including a
EUR 0.8 million (EUR -31.6 million) change in the fair value of investment
properties.
- Net rental income increased by 1.0 per cent and came to EUR 30.6 million (EUR
30.3 million). If the impact of the strengthened Swedish krona is excluded, net
rental income decreased by 0.7 per cent.
- Net rental income from like-for-like properties decreased by 5.8 per cent due
mainly to higher property operating expenses than in the corresponding period
caused by exceptionally severe winter conditions and slightly increased vacancy.
Additionally, prevailing low inflation or deflation resulted in very low
indexation-based rental increases.
- The company's direct result reduced to EUR 11.4 million (EUR 11.6 million).
- Direct result per share (diluted) was EUR 0.05 (EUR 0.05).
- Earnings per share were EUR 0.06 (EUR -0.08). Fair value changes in investment
properties have a significant impact on earnings per share.
- Occupancy rate was 94.5 per cent (95.3 %). The decrease in occupancy rate
resulted from the start-up of new (re)development projects and slightly higher
vacancy.
- Net cash flow from operating activities per share decreased to EUR 0.03
(EUR 0.10) due to extraordinary and timing items.
- The equity ratio was 32.7 per cent (36.4%). This decrease resulted mainly from
paid up dividends and equity return and higher debt due to investments.
- The company's financial position remained good during the period. Total
available liquidity at the end of the reporting period was EUR 212.7 million,
including unutilised committed debt facilities amounting to EUR 164.0 million
and EUR 48.7 million in cash.
- About 25 per cent of the apartments in Jakobsbergs Centrum in Järfälla, which
is located in the Greater Stockholm area, were sold for SEK 120 million (about
EUR 12 million) in March. Citycon recorded a gain on sale of EUR 1.0 million for
the transaction.
Key Figures
Q1/ Q1/ Change- Q4/
2010 2009 % (1)) 2009 2009
Turnover, EUR million 49.5 45.9 7.9% 48.9 186.3
Net rental income, EUR million 30.6 30.3 1.0% 31.6 125.4
Operating profit/loss, EUR million 30.3 -5.8 - -12.4 10.3
% of turnover 61.3 % - - - 5.5 %
Profit/loss before taxes, EUR million 17.2 -18.1 - -24.4 -37.5
Profit/loss attributable to parent
company shareholders, EUR million 13.0 -16.8 - -23.8 -34.3
Direct operating profit, EUR million 26.4 25.7 2.4% 26.3 107.7
% of turnover 53.3% 56.1% - 53.9% 57.8%
Direct result, EUR million 11.4 11.6 -2.1% 12.5 50.9
Indirect result, EUR million 1.6 -28.4 - -36.3 -85.2
Earnings per share (basic), EUR 0.06 -0.08 - -0.11 -0.16
Earnings per share (diluted), EUR 0.06 -0.08 - -0.11 -0.16
Direct result per share (diluted),
(diluted EPRA EPS), EUR 0.05 0.05 -1.7% 0.06 0.23
Net cash from operating activities per
share, EUR 0.03 0.10 -66.8% 0.06 0.30
Fair value of investment properties, EUR
million 2,193.5 2,097.3 4.6% 2,147.4
Equity per share, EUR 3.20 3.37 -5.0% 3.31
Net asset value (EPRA NAV) per share, EUR 3.43 3.62 -5.0% 3.54
EPRA NNNAV per share, EUR 3.22 3.55 -9.4% 3.35
Equity ratio, % 32.7 36.4 -10.1% 34.2
Gearing, % 175.9 151.2 16.4% 169.5
Net interest-bearing debt (fair value),
EUR million 1,327.2 1,191.3 11.4% 1,312.2
Net rental yield, % 6.0 5.9 - 6.1
Net rental yield, like-for-like
properties, % 6.7 6.2 - 6.7
Occupancy rate, % 94.5 95.3 - 95.0
Personnel (at the end of the period) 120 113 6.2% 119
1) Change-% is calculated from exact figures and refers to the change between
2010 and 2009.
CEO Petri Olkinuora's Comments on the Beginning of 2010:
"Citycon's turnover grew by 7.9 per cent during the first quarter of 2010 and
net rental income increased 1.0 per cent compared with the same period last year
despite the extra expenses caused by the cold and snowy winter and low
indexation-based rental increases. The increase was based on active retail
property management and the development projects completed in Stockholm and
Tallinn at the end of 2009. Growth in net rental income and turnover was slowed
down by started new development projects, which resulted in less income
generating retail premises. The occupancy rate declined slightly from last year,
mainly due to one-off reasons.
In accordance with its strategy, Citycon divested a number of the apartments in
Jakobsbergs Centrum in Järfälla, Sweden, during the reporting period. The
divestment of apartments built in Liljeholmstorget was finalised in early April
and the divestment of apartments in Åkersberga Centrum is expected to be
completed in June. After the completion of these transactions, the company still
has more than 600 residential units in Sweden, the value of which amounts to
approximately EUR 40 million. Citycon's objective is to divest all of its
residential units in Sweden, as these are not part of the company's core
business.
The company has currently four major redevelopment projects under way: the
extension and refurbishment of Åkersberga Centrum in the Greater Stockholm area,
the construction of a new shopping centre in Myllypuro in Helsinki and the
refurbishment projects of the Espoontori shopping centre in Espoo and the Forum
shopping centre in Jyväskylä. In addition, the company is refurbishing shopping
centre Myyrmanni and Hansa property, part of Trio. Through these redevelopment
projects and its professional shopping centre management, the company continues
to seek growth in its existing shopping centres.
We are proud of the first platinum-level certificate awarded to the
Liljeholmstorget shopping centre as the first shopping centre in Europe. This
clearly demonstrates that our company is committed to sustainable development
and has the capability to construct buildings that comply with the strictest
international standards. All of Citycon's future development projects will be
carried out in accordance with the quality criteria of environmental
certificates. Citycon has also published its first social responsibility report
and defined its strategic objectives for environmental responsibility, which
will impact both the company's current operations and existing property
portfolio as well as new projects."
Business Environment
Early in the year, retail sales grew slightly in the company's main markets,
Finland and Sweden. Based on preliminary data at the end of February, retail
sales increased by 1.9 per cent in Finland and by 2.3 per cent in Sweden
compared to February 2009. In Estonia, retail sales declined by 10.0 per cent.
Consumer confidence in economic trends improved during the first months of 2010
in Finland and Sweden. In the Baltic countries, the general economic situation
remained difficult. (Sources: Statistics Finland, Statistics Sweden, Statistics
Estonia)
The greatest threat to the Finnish and Swedish economies is an increase in
unemployment, which would have an impact on consumer behaviour. At the end of
March, the unemployment rate in Finland was 9.2 per cent and in Sweden 9.3 per
cent. Inflation in March was 0.1 per cent both in Finland and in Estonia, and
1.2 per cent in Sweden. Interest rates remained low. (Sources: ibid.)
The availability of financing has improved over the last few months. The real
estate sector was almost at a standstill in 2009, but began showing signs of a
revival during the reporting period. However, the number of transactions
remained low.
Business and Property Portfolio Summary
Citycon focuses on the shopping centre business in Finland, Sweden and the
Baltic countries. The company's shopping centres are actively managed and
developed by the company's professional personnel, working locally. In the
Nordic countries, the company is a pioneer in its adherence to the principles of
sustainable development in its shopping centre business. Citycon's objective is
to create added value for customers and to enhance the commercial appeal of its
properties, taking account of each retail property's and its catchment area's
commercial preconditions: purchasing power, competition and consumer demand.
At the end of March 2010, Citycon owned 33 (33) shopping centres and 51 (51)
other properties. Of the shopping centres, 22 (22) were located in Finland,
eight (8) in Sweden and three (3) in the Baltic countries. The market value of
the company's property portfolio totalled EUR 2,193.5 million (EUR 2,097.3
million), with Finnish properties accounting for 65.9 per cent (70.0%), Swedish
properties for 26.6 per cent (22.8%) and Baltic properties for 7.4 per cent
(7.2%). The gross leasable area at the end of the period was 953,650 square
metres.
Changes in the Fair Value of Investment Properties
In accordance with the International Accounting Standards (IAS) and the
International Valuation Standards (IVS), an external professional appraiser
conducts a valuation of Citycon's property portfolio on a property-by-property
basis at least once a year. In recent years, the valuation has been conducted on
a quarterly basis, due to changing market conditions. A Property Valuation
Statement at the end of March 2010 is available on the corporate website.
The valuation was conducted by Realia Management Oy, part of the Realia Group,
which is the preferred appraisal service supplier of CB Richard Ellis in
Finland. The valuation statement includes a description of the valuation process
and the factors contributing to the valuation, as well as the results of the
valuation and a sensitivity analysis.
The valuation was primarily carried out as a cash flow analysis of the net
operating income for a period of ten years. In the case of undeveloped lots and
properties subject to significant alterations in city plan, the market value has
been determined based on the building volume permitted by the valid zoning plan.
Development properties have been appraised using a specially designed project
calculation model. The aforementioned valuation statement also contains more
details on valuation methods.
The average net yield requirement defined by Realia Management Oy for Citycon's
entire property portfolio came to 6.6 per cent on 31 March 2010. The same yield
figure for Citycon's properties in Finland, Sweden and the Baltic countries
stood at 6.6 per cent, 6.4 per cent and 8.2 per cent, respectively.
As required by IAS 40, Citycon recognises its investment property at fair value.
Its properties' combined market value at the closing date of the interim
accounts is reported in the statement of financial position and any changes in
their fair value through net fair value gains or losses on investment property
in the statement of comprehensive income. Thus, the change in fair value also
has a profit impact, and this is reported in the company's interim reports as a
separate item under operating profit, and, consequently, the profit for the
period.
The fair value of the company's investment property in the statement of
financial position equals the property portfolio's total value determined by the
external appraiser, capital expenditure on development projects which the
external appraiser does not take into account when determining fair value, and
the acquisition cost of new properties acquired during the last three months.
During the reporting period, the fair value of Citycon's property portfolio
rose, mainly due to property development. The company recorded a total value
increase of EUR 16.3 million and a total value decrease of EUR 15.5 million. The
net effect of these changes on the company's profit was EUR 0.8 million (EUR
-31.6 million).
Lease Portfolio and Occupancy Rate
Citycon aims to have a versatile and efficiently manageable lease portfolio. The
company favours fixed-term leases. In general, all new leases for retail
premises are signed for a fixed term in all countries. The only exceptions to
this are residential units, storage areas and individual parking spaces.
At the end of the reporting period, Citycon had a total of 4,029 (4,080) leases.
The average remaining length of the lease agreements was 3.1 (3.1) years.
The net rental yield of Citycon's property portfolio was 6.0 per cent (5.9%) and
the economic occupancy rate was 94.5 per cent (95.3%). The decrease in the
occupancy rate was due to new development projects started or planned during the
period and a slight increase in the property portfolio vacancy rate throughout
the company's operating countries.
The company's net rental income grew by 1.0 per cent to EUR 30.6 million. The
leasable area rose by 2.2 per cent to 953,650 square metres. Net rental income
from like-for-like properties decreased by 5.8 per cent.
Like-for-like properties are properties held by Citycon throughout the 24-month
reference period, excluding properties under refurbishment and redevelopment as
well as undeveloped lots. 80.3 per cent of like-for-like properties are located
in Finland. The calculation method for net yield and standing (like-for-like)
investments is based on guidelines issued by the KTI Institute for Real Estate
Economics and the Investment Property Databank (IPD). The following presents
like-for-like net rental income growth by segments.
Like-for-like Net Rental Income by Segments
The Baltic
EUR million Finland Sweden Countries Other Total
Q1/2008 22.3 5.8 1.6 0.0 29.7
Acquisitions 0.4 0.1 0.0 - 0.4
(Re)developments 0.4 0.0 0.6 - 1.0
Divestments -0.1 - - - -0.1
Like-for-like 0.1 0.2 -0.1 - 0.2
Other (incl. exch. rate diff.) -0.1 -0.8 0.0 0.0 -0.9
Q1/2009 23.1 5.2 2.1 0.0 30.3
Acquisitions - - - - 0.0
(Re)developments -1.1 1.2 1.0 0.0 1.0
Divestments 0.0 -0.3 - 0.0 -0.4
Like-for-like -0.9 -0.2 -0.1 0.0 -1.1
Other (incl. exch. rate diff.) 0.2 0.5 0.0 0.0 0.8
Q1/2010 21.3 6.4 3.0 0.0 30.6
During the last 12 months, the rolling twelve-month occupancy cost ratio for
like-for-like properties was 8.6 per cent. The occupancy cost ratio is
calculated as the share, represented by net rent and potential additional fees
and charges paid by a tenant to Citycon, of the tenant's sales, excluding VAT.
The VAT percentage is an estimate.
Lease Portfolio Summary
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of leases started during the period 185 128 44,5 386 873
Total area of leases started, sq.m. (1)) 42,997 16,066 167.6 69,262 141,628
Average rent of leases started (EUR/sq.m.)
(1)) 18.2 19.3 -5.7 26.5 23.6
Number of leases ended during the period 392 195 101.0 184 781
Total area of leases ended, sq.m. (1)) 68,467 31,787 115.4 28,213 127,730
Average rent of leases ended (EUR/sq.m.)
(1)) 17.7 13.5 31.1 19.2 17.5
Occupancy rate at end of the period, % 94.5 95.3 -0.8 - 95.0
Average remaining length of lease portfolio
at the end of the period, year 3.1 3.1 0.0 - 3.1
(1) )Leases started and ended don't necessarily refer to the same premises.
Acquisitions and Divestments
Citycon continues to focus on the development and redevelopment of the company's
retail properties, and follows developments in the shopping centre market across
its operating area. No new property acquisitions took place during the reporting
period.
Early in January, Citycon divested the building rights for 255 residential
units, which are to be built in connection with the Myllypuro shopping centre
and the three companies it had established for managing them, to three different
residential investors. The residential investors will each be responsible for
the construction and leasing of their own apartments. Citycon recorded a gain on
sale of EUR 1.7 million on this transaction, tax effects included.
In March, Citycon sold about 25 per cent of the apartments in the Jakobsbergs
Centrum shopping centre for around SEK 120 million (approx. EUR 12 million).
These apartments were sold to a newly-established owners' association under an
agreement according to which the association agreed to purchase 100 per cent of
the shares in Citycon's Swedish subsidiary Tenrot Fastighets AB. The total area
of the apartments sold is approximately 8,000 square metres. Citycon recorded a
gain on sale of EUR 1.0 million on this transaction, tax effects included.
In the summer of 2009, Citycon agreed on the divestment of the 181 residential
units at Åkersberga Centrum for a price of about SEK 181 million (approx. EUR
18 million). The closing of the transaction is expected to take place in June
2010. The divestment of the residential units at Åkersberga Centrum will have no
effect on reported profits.
Development Projects
Citycon is pursuing a long-term increase in the footfall, cash flow and
efficiency as well as return from its retail properties. The purpose of the
company's development activities is to keep its shopping centres competitive for
both customers and tenants.
In the short term, redevelopment projects weaken returns from some properties,
as some retail premises may have to be temporarily vacated for refurbishment,
which affects rental income. Citycon aims to carry out any redevelopment
projects phase by phase, thereby avoiding the need to close for example the
whole shopping centre during the works in question, thus ensuring continuous
cash flow.
Completed Development Projects
Towards the end of 2009, Citycon completed two major (re)development projects,
the Liljeholmstorget shopping centre in Stockholm and the Rocca al Mare centre
in Tallinn. Both projects were completed within the planned schedule and in an
environmentally sustainable manner.
Both shopping centres were opened before the Christmas season, and their sales
and footfall remained good also during the reporting period. Additional capital
expenditure will be recorded for both shopping centres during their introductory
phase.
(Re)development Projects in Progress
The refurbishment and extension project of Åkersberga Centrum, located in
Österåker in Greater Stockholm area, is the largest of Citycon's ongoing
(re)development projects. The total budget for the construction project is about
SEK 467 million, or about EUR 48 million, of which Citycon's share is 75 per
cent.
The leasable area of the shopping centre will grow by about 13,000 square
metres, the existing shopping centre will be refurbished and additional parking
facilities will be built for 350 vehicles. Construction work was initiated in
the summer of 2009 and the refurbished shopping centre will be completely ready
in 2011. The shopping centre will remain open throughout the project.
Citycon is building a new shopping centre and an underground car park for 270
vehicles in the Myllypuro district in Helsinki. The shopping centre will have an
excellent location, next to the Myllypuro metro station. The leasable area of
the new shopping centre will be about 7,300 square metres, and its service
offering will include grocery retailers and other daily services. Currently,
more than 60 per cent of the centre's retail premises have been leased. The
shopping centre will be completed in stages, with the first part being opened in
early summer 2011 and the second a year later in 2012.
In addition, 255 rental and right-of-residence apartments, all privately
financed, will be built in conjunction with the shopping centre. The total cost
of the Myllypuro project will exceed EUR 60 million, with Citycon's share of the
forthcoming shopping centre and parking hall accounting for EUR 20 million.
The Espoontori shopping centre located in the centre of Espoo adjacent to
railway station will be completely refurbished during 2010. The shopping
centre's 10,400 square metres of floor space and car park will be renovated and
modernised to meet the requirements of today's customers. Citycon will invest
EUR 18 million in this project.
Citycon is refurbishing the interior premises of the Forum shopping centre in
downtown Jyväskylä. The modernised Forum's offering will have a stronger
emphasis on fashion and provide a more versatile range of specialty stores,
cafés and restaurants. The shopping centre's functionality and ambiance will
also be enhanced. Citycon will invest EUR 16 million in this project. The fully
modernised Forum shopping centre will be opened in November 2010. Construction
work will be conducted in stages, since most services remaining in the shopping
centre will continue to operate normally throughout the renovation.
The Hansa property close to the recently redeveloped Trio shopping centre in
Lahti will be provided with a better commercial link to Trio. An alteration in
city plan is pending to allow for the construction of retail premises on the
bridge connecting Trio and Hansa above the street of Vapaudenkatu. An area of
8,000 square metres will be redeveloped in Hansa property, and the project is
due for completion in 2010.
At the Myyrmanni shopping centre in Vantaa, major tenant alteration works are
under way. Over one fourth of the shopping centre's leasable retail area is
being refurbished. In addition, the retail premises on Isolinnankatu in Pori
will be refurbished in two stages. All of the above-mentioned projects fulfil
Citycon's strategy, according to which the company redevelops its excellently
located retail properties. The projects are also in line with Citycon's strategy
of sustainable development, which emphasises the redevelopment of retail
properties located in key locations in city centres and district centres. This
will also help to strengthen existing urban structures and improve the areas'
service offering.
The enclosed table lists the most significant development and redevelopment
projects in progress and projects completed in 2009, as approved by the Board of
Directors. Capital expenditure during 2010 on all development projects amounted
to EUR 8.7 million in Finland, EUR 10.4 million in Sweden and EUR 7.5 million in
the Baltic countries.
(Re)development Projects Completed in 2009 and in Progress at 31 March 2010 (1))
Actual
Estimated gross Estimated
total expenditure final
investment by 31.3.2010 year of
Property Location (EUR million) (EUR million) completion
Liljeholmstorget Stockholm, Sweden 145.6(2)3)) 145.6 Completed
Rocca al Mare Tallinn, Estonia 58.3 57.4 Completed
Åkersberga Centrum Österåker, Sweden 48.1(3)) 20.6 2011
Torikeskus Seinäjoki, Finland 4.0 2.7 2010
Hansa (Trio) Lahti, Finland 8.0 0.7 2010
Forum Jyväskylä, Finland 16.0 1.4 2010
Espoontori Espoo, Finland 18.0 6.3 2010
Myllypuro Helsinki, Finland 20.0 4.0 2012
Isolinnankatu Pori, Finland 3.0 1.4 2010
Myyrmanni Vantaa, Finland 4.8 1.2 2010
1) Calculated based on period end exchange rates.
2) Excluding the residential units sold on 6 April 2010.
3) Estimated total investment in SEK has not changed from the year end 2009.
(Re)development Projects under Planning
The largest of the planned (re)development projects is the Iso Omena extension
project, in which the Matinkylä station on the western metro line will be
connected to the shopping centre by building retail premises on top of the
station. The estimated investment amounts to EUR 100-130 million. Citycon has an
exclusive land use reservation for planning of the project together with NCC.
The aim is to develop a metro centre which combines excellent commercial
services with direct connections between the metro train and its feeder
terminal. The western metro line connecting Helsinki and Espoo is due for
completion in 2014.
More information on planned projects can be found in Citycon's Annual Report
2009.
Business Units
Citycon's business operations are divided into three business units: Finland,
Sweden and the Baltic Countries. The latter two are sub-divided into two
business areas: Retail Properties and Property Development. The Finnish business
unit was reorganised towards the end of 2009. The Finnish unit is sub-divided
into the business areas Retail Property Management (operative management of
shopping centres), Asset Management (property management, investments and
divestments), Leasing and Marketing and Property Development.
Finland
Citycon is the market leader in the Finnish shopping centre business. In 2009,
Citycon's market share was 22 per cent of the Finnish shopping centre market
(source: Entrecon). The company's net rental income from Finnish operations
during the reporting period was EUR 21.3 million (EUR 23.1 million). The
business unit accounted for 69.5 per cent of Citycon's total net rental income.
The key figures of the Finnish property portfolio are presented below.
Development projects have been covered previously in this document.
Lease Portfolio Summary, Finland
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of leases started during the period 99 66 50.0 84 295
Total area of leases started, sq.m. (1)) 30,840 9,190 235.6 18,420 57,220
Average rent of leases started (EUR/sq.m.)
(1)) 20.7 25.0 -17.2 21.0 22.5
Number of leases ended during the period 180 116 55.2 90 408
Total area of leases ended, sq.m. (1)) 48,260 22,270 116.7 19,240 81,480
Average rent of leases ended (EUR/sq.m.)
(1)) 20.3 15.0 35.3 18.5 19.8
Occupancy rate at end of the period, % 94.1 94.9 -0.8 - 94.6
Average remaining length of lease portfolio
at the end of the period, year 3.0 3.0 0.0 - 2.8
(1) )Leases started and ended don't necessarily refer to the same premises.
Financial Performance, Finland
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of properties 66 66 0.0 66
Gross leasable area, sq.m. 587,650 593,550 -1.0 587,650
Annualised potential rental value, EUR
million (1)) 135.5 135.4 0.1 135.3
Gross rental income, EUR million 31.4 32.3 -2.7 31.5 126.5
Turnover, EUR million 32.5 33.5 -2.8 32.7 131.3
Net rental income, EUR million 21.3 23.1 -7.8 23.0 92.4
Net fair value losses on investment
property,
EUR million -3.0 -25.5 -88.0 -14.6 -65.1
Operating profit/loss, EUR million 19.8 -4.0 - 6.8 21.2
Capital expenditure, EUR million 8.7 3.2 174.8 15.3 24.5
Fair value of investment properties, EUR
million 1,446.6 1,468.9 -1.5 1,442.0
Net rental yield, % (2)) 6.4 6.2 - 6.5
Net rental yield, like-for-like
properties, % 6.6 6.3 - 6.6
1) Annualised potential rental value assuming 100% occupancy for the portfolio
includes annualised gross rent based on valid rent roll at the end of the
period, market rent of vacant premises and rental income from turnover based
contracts (estimation) and possible other rental income.
2) Includes the lots for development projects.
Sweden
Citycon has strengthened its position in the Swedish shopping centre market and
has eight shopping centres and seven other retail properties in Sweden, located
in the Greater Stockholm and Greater Gothenburg areas and in Umeå. The company's
net rental income from Swedish operations increased by 22.3 per cent to EUR 6.4
million (EUR 5.2 million). If the impact of the strengthened Swedish krona is
excluded, net rental income from Swedish operations increased by 11.3 per cent
on the previous year. The business unit accounted for 20.8 per cent of Citycon's
total net rental income.
The key figures for the Swedish property portfolio are presented below.
Development projects have been covered previously in this document.
Lease Portfolio Summary, Sweden
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of leases started during the period 82 61 34.4 245 449
Total area of leases started, sq.m. (1)) 11,775 6,873 71.3 42,163 59,351
Average rent of leases started (EUR/sq.m.)
(1)) 11.7 11.7 0.0 27.9 23.6
Number of leases ended during the period 209 68 207.4 93 318
Total area of leases ended, sq.m. (1)) 19,687 8,122 142.4 8,943 37,420
Average rent of leases ended (EUR/sq.m.) (1)) 11.2 9.1 23.1 20.6 12.8
Occupancy rate at end of the period, % 94.4 95.5 -1.2 - 94.7
Average remaining length of lease portfolio
at the end of the period, year 2.9 2.3 21.7 - 3.0
(1) )Leases started and ended don't necessarily refer to the same premises.
Financial Performance, Sweden
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of properties 15 15 0.0 15
Gross leasable area, sq.m. 295,000 285,000 3.5 302,500
Annualised potential rental value, EUR
million (1)) 52.3 37.7 38.6 48.8
Gross rental income, EUR million 12.2 9.0 34.9 11.4 39.3
Turnover, EUR million 12.6 9.3 35.8 12.4 41.0
Net rental income, EUR million 6.4 5.2 22.3 6.1 23.2
Net fair value gains/losses on investment
property,
EUR million 4.9 3.4 41.5 -17.0 -19.6
Operating profit/loss, EUR million 11.2 7.8 43.4 -12.0 0.3
Capital expenditure, EUR million 11.1 14.4 -23.4 33.4 95.9
Fair value of investment properties, EUR
million 583.8 477.2 22.3 548.8
Net rental yield, % (2)) 4.6 5.1 - 4.7
Net rental yield, like-for-like
properties, % 6.8 5.8 - 6.8
1) Annualised potential rental value assuming 100% occupancy for the portfolio
includes annualised gross rent based on valid rent roll at the end of the
period, market rent of vacant premises and rental income from turnover based
contracts (estimation) and possible other rental income.
2) Includes the lots for development projects.
Baltic Countries
Citycon owns three shopping centres in the Baltic region: Rocca al Mare and
Magistral in Tallinn, Estonia, and Mandarinas in Vilnius, Lithuania. The
difficult economic situation in the Baltic countries has affected the sales of
Citycon's shopping centres and increased temporary rental rebates. This has also
increased the credit loss risk. Vacancy rates did not, however, increase
markedly in the Baltic countries during the period. Net rental income from
Baltic operations amounted to EUR 3.0 million (EUR 2.1 million). The business
unit accounted for 9.7 per cent of Citycon's total net rental income.
The key figures for the Baltic property portfolio are presented below.
Development projects have been covered previously in this document.
Lease Portfolio Summary, Baltic Countries
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of leases started during the period 4 1 300.0 57 129
Total area of leases started, sq.m. (1)) 382 3 - 8,679 25,057
Average rent of leases started (EUR/sq.m.) (1)) 19.8 31.9 -37.9 29.6 26.0
Number of leases ended during the period 3 11 -72.7 1 55
Total area of leases ended, sq.m. (1)) 520 1,395 -62.7 30 8,830
Average rent of leases ended (EUR/sq.m.) (1)) 27.8 15.0 85.3 48.4 17.1
Occupancy rate at end of the period, % 98.8 99.5 -0.7 - 99.4
Average remaining length of lease portfolio
at the end of the period, year 5.0 5.4 -7.4 - 5.2
(1) )Leases started and ended don't necessarily refer to the same premises.
Financial Performance, Baltic Countries
Q1/ Q1/ Change- Q4/
2010 2009 % 2009 2009
Number of properties 3 3 0.0 3
Gross leasable area, sq.m. 71,000 54,200 31.0 71,000
Annualised potential rental value, EUR million
(1)) 15.3 11.9 29.1 15.8
Gross rental income, EUR million 3.6 3.0 20.8 2.3 12.0
Turnover, EUR million 4.3 3.1 40.0 3.8 14.0
Net rental income, EUR million 3.0 2.1 45.1 2.5 9.8
Net fair value losses on investment property,
EUR million -1.0 -9.6 -89.5 -7.1 -12.7
Operating profit/loss, EUR million 1.7 -7.7 - -4.9 -3.8
Capital expenditure, EUR million 7.5 5.3 40.9 1.7 13.9
Fair value of investment properties, EUR
million 163.1 151.1 7.9 156.6
Net rental yield, % (2)) 7.0 6.1 - 6.4
Net rental yield, like-for-like properties, % 8.4 7.5 - 8.2
1) Annualised potential rental value assuming 100% occupancy for the portfolio
includes annualised gross rent based on valid rent roll at the end of the
period, market rent of vacant premises and rental income from turnover based
contracts (estimation) and possible other rental income.
2) Includes the lots for development projects.
Turnover and Profit
The Citycon Group's turnover for the period came to EUR 49.5 million
(EUR 45.9 million), principally derived from the rental income generated by
Citycon's retail premises. Gross rental income accounted for 95.3 per cent
(96.6%) of turnover.
Operating profit came to EUR 30.3 million (EUR -5.8 million). Profit before
taxes was EUR 17.2 million (EUR -18.1 million) and profit after taxes
attributable to the parent company's shareholders EUR 13.0 million (EUR -16.8
million). The increase in operating profit was mainly due to the fair value
change of the property portfolio. As a result of the completed redevelopment
projects, the operating profit rose also due to net rental income generated by
increased and refurbished premises. Credit losses continued to be minor, at EUR
0.1 million. Temporary rental rebates totalled EUR 0.8 million during the
period.
The effect of changes in the fair value of the property portfolio, of gains on
sales and of other indirect items on the profit attributable to the parent
company's shareholders, was EUR 1.6 million (EUR -28.4 million), tax effects
included. Taking this into account, the direct result after taxes was EUR 0.2
million below the reference period level (cf. Note "Reconciliation between
direct and indirect result"). The decrease in the direct result came mainly from
increased financial expenses and taxes. Financial expenses increased due to
higher interest expenses and exchange rate changes.
Earnings per share were EUR 0.06 (EUR -0.08). The direct result per share,
diluted, (undiluted EPRA EPS) came to EUR 0.05 (EUR 0.05). Net cash flow from
the operating activities per share amounted to EUR 0.03 (EUR 0.10).
Human Resources and Administrative Expenses
At the end of the period, Citycon Group employed a total of 120 (113) persons,
of whom 81 were employed in Finland, 31 in Sweden and eight in the Baltic
countries. Administrative expenses declined to EUR 4.5 million
(EUR 4.6 million), including EUR 0.2 million (EUR 0.1 million) of expenses
related to employee stock options and the company's share-based incentive
scheme.
Capital Expenditure and Divestments
Citycon's reported gross capital expenditure in the period totalled
EUR 27.5 million (EUR 23.1 million). Of this, EUR 2.7 million (EUR 0.0 million)
accounted for property acquisitions, EUR 24.6 million (EUR 22.9 million) for
property development and EUR 0.3 million (EUR 0.2 million) for other
investments. These investments were financed through cash flow from operations,
proceeds from divestments of investment properties and existing financing
arrangements.
Early in January, Citycon sold the building rights for 255 residential units
which are to be built in connection with the Myllypuro shopping centre and the
three companies it had established for managing them, to three different
residential investors for a total of EUR 11.7 million.
In March, Citycon sold about 25 per cent of the apartments in the Jakobsbergs
Centrum shopping centre for about SEK 120 million (approx. EUR 12 million).
Statement of Financial Position and Financing
The total assets at the end of the period stood at EUR 2,295.4 million
(EUR 2,147.8 million). Liabilities totalled EUR 1,546.5 million
(EUR 1,366.8 million), with short-term liabilities accounting for
EUR 238.5 million (EUR 105.7 million). Citycon's financial position remained
good. The company's total liquidity at the end of the period was
EUR 212.7 million, of which EUR 164.0 million consisted of undrawn, committed
credit facilities and EUR 48.7 million of cash and cash equivalents. At the end
of the period, Citycon's liquidity, short-term credit limits and commercial
papers excluded, stood at EUR 176.9 million (31 December 2009: EUR 172.9
million).
For the purpose of short-term liquidity management, the company uses a EUR 100
million non-committed Finnish commercial paper programme and a non-committed
Swedish commercial paper programme worth SEK one billion. By the end of the
reporting period, Citycon had issued commercial papers to the value of EUR 35.8
million. Citycon's financing is mainly arranged on a long-term basis, with
short-term interest-bearing debt constituting approximately 11 per cent of
Citycon's total interest-bearing debt at the end of the period.
Year-on-year, interest-bearing debt increased by EUR 172.0 million to
EUR 1,366.4 million (EUR 1,194.4 million). The fair value of the
interest-bearing debt stood at EUR 1,375.9 million (EUR 1,204.9 million).
Cash and cash equivalents totalled EUR 48.7 million (EUR 13.7 million). The
balance of cash was higher than normally due to prefunding of the payment of
dividend and return from invested unrestricted equity fund effected in early
April. The fair value of the interest-bearing net debt stood at
EUR 1,327.2 million (EUR 1,191.3 million).
The year-to-date weighted average interest rate decreased compared to the
previous year and was 3.97 per cent (4.46% during reference period). The average
loan maturity, weighted according to the principal amount of the loans, stood at
3.3 years (4.5 years). The average interest-rate fixing period was 3.1 years
(3.2 years).
Citycon's interest cover ratio was unchanged at 2.3x (Q4/2009: 2.3x). The
company's equity ratio as defined in the loan agreement covenants decreased due
to investments which were financed using debt financing and dividend
distribution, and was 39.2 per cent (Q4/2009: 40.6%).
The weighted average interest rate, interest-rate swaps included, was
3.91 per cent on 31 March 2010.
Citycon's equity ratio at the end of the period was 32.7 per cent (36.4%).
Gearing stood at 175.9 per cent (151.2%).
Of Citycon's period-end interest-bearing debt, 75.8 per cent (76.3%) was in
floating-rate loans, of which 75.7 per cent (66.2%) had been converted to
fixed-rate loans by means of interest-rate swaps. Fixed-rate debt accounted for
81.6 per cent (74.2%) of the period-end interest-bearing debt, interest-rate
swaps included. The loan portfolio's hedging ratio is in line with the Citycon's
financing policy. During the period, Citycon entered into new hedges which
slightly increased the hedging ratio.
Citycon applies hedge accounting, whereby changes in the fair value of
interest-rate swaps subject to hedge accounting are recognised under other
comprehensive income. The period-end nominal amount of interest-rate swaps
totalled EUR 789.2 million (EUR 638.6 million), with hedge accounting applied to
interest-rate swaps whose nominal amount totalled EUR 763.5 million
(EUR 615.8 million).
On 31 March 2010, the nominal amount of all the Citycon Group's derivative
contracts totalled EUR 808.8 million (EUR 655.7 million), and their fair value
was EUR -40.3 million (EUR -19.3 million). The decline of market interest rates
decreased the fair value of Citycon's interest rate derivatives. Hedge
accounting is applied to the majority of interest rate derivatives, meaning that
any changes in their fair value will be recognised under other comprehensive
income. Thereby, the fair value loss for these derivatives does not affect the
profit for the period or earnings per share but the total comprehensive income.
During the period, the fair value loss recognised under other comprehensive
income, taking into account the tax effect, totalled EUR -6.6 million (EUR -7.9
million).
Net financial expenses totalled EUR 13.1 million (EUR 12.2 million). The
increase in financial expenses is mainly attributable to lower capitalization of
interest expenses and higher net debt. In addition, the net financial expenses
in the statement of comprehensive income include EUR 0.4 million
(EUR 0.4 million) in non-cash expenses related to the option component on
convertible bonds.
Short-term Risks and Uncertainties
For risk management purposes, Citycon has a holistic Enterprise Risk Management
(ERM) programme in place. Citycon's risk management aims to ensure that the
company can meet its strategic and operational goals, while the ERM's purpose is
to generate up-to-date and consistent information for the company's senior
executives and Board of Directors on any risks threatening the targets set in
strategic and annual plans. More details on the company's risk management and
risk management principles are available on the corporate website at
www.citycon.com/riskmanagement and on pages 32-34 of the Financial Statements
2009.
Citycon's Board of Directors estimates that major short-term risks and
uncertainties are associated with economic developments in the company's
operating regions, the cost of debt financing, changes in the fair value of
investment properties and the execution of redevelopment projects.
Economic fluctuations and developments materially affect demand for rental
premises and rental rates. These represent one of the company's key short-term
risks. Economic growth has decelerated distinctly in all of the company's
operating areas since 2008, and many economists predict that growth will remain
modest in 2010 in Finland, Sweden and the Baltic countries. In addition,
unemployment is expected to remain at above-normal levels while inflation
remains low. Such economic development may reduce demand for retail premises,
weaken lessees' ability to pay rent, increase vacancy rates and limit
opportunities for increasing rents.
The refurbishment and redevelopment of retail properties is an integral part of
Citycon's growth strategy. Implementation of this strategy requires both equity
and debt financing. The financial market weakened markedly in 2008 and the
situation remained challenging throughout 2009. Banks' willingness to lend money
to enterprises improved during the period under review, but has not recovered to
pre-crisis levels. Moreover, the margins of long-term unsecured bank loans, in
particular, have remained high. If stricter banking regulations are realised in
the future, this may lead to the persistence of the abnormally high cost of
financing provided by the banks. Citycon's financial position is good. At the
end of the period, the company's available liquidity totalled EUR 212.7 million,
consisting mainly of committed long-term credit limits and cash and cash
equivalents. Citycon is capable of financing its current projects in their
entirety as planned.
A number of factors contribute to the value of retail properties, such as
general and local economic development, investor demand, and interest rates.
Investment property value trends are subject to untypical levels of uncertainty
due to the challenging economic situation and increased unemployment throughout
the company's operating areas. During recent years, retail property values have
declined, with Citycon recognising fair value losses on its investment
properties during the years 2008 and 2009. Trading activity in the property
market remained at low levels during 2009 and early 2010. While changes in the
investment properties' fair value have an effect on the company's profit for the
period, they do not have an immediate impact on cash flow.
A key element in Citycon's strategy lies in the development of existing
properties to meet the lessees' needs more effectively. The most central
short-term risk related to development projects includes leasing new premises in
the currently difficult economic environment. Citycon is preparing major
redevelopment projects throughout its operating countries, meaning - if all of
these projects are carried out - that the leasable area in the company's
shopping centres will increase significantly in the forthcoming years.
Successful implementation of these new development projects is of primary
importance as regards Citycon's financial development and growth. The key risk
involves demand for retail premises as well as market rent levels in an
environment characterised by slow economic growth. At this very moment,
relatively low construction costs would favour launching new projects but, on
the other hand, in order to be viable, new projects require the attainment of an
adequate pre-leasing rate at sufficient rental levels.
Environmental Responsibility
Citycon seeks to lead the way in responsible shopping centre business and to
promote sustainable development within the business. The location of Citycon's
shopping centres in city centres, local centres or generally adjacent to major
traffic flows, combined with excellent public transport connections, provide a
solid ground for promoting sustainable development.
Citycon has initiated a Green Shopping Centre Management programme offering an
operating model for promoting sustainable development in all of the company's
shopping centres. The programme was implemented in 2009 and aims to improve
energy efficiency, recycling and other operations that support sustainable
development.
In late March, the Liljeholmstorget shopping centre was awarded the platinum
LEED® (Leadership in Energy and Environmental Design) environmental certificate,
the highest of its kind. Liljeholmstorget's certificate is the first
platinum-level certificate awarded to a shopping centre in Europe. The Rocca al
Mare shopping centre was awarded a silver LEED environmental certificate in
February, the first of its kind in the Baltic countries. The Trio shopping
centre received its certificate in June 2009, being the first to do so in the
Nordic countries. All three projects were Citycon's pilot projects in
sustainable construction. Environmental certifications form an essential element
of Citycon's efforts towards sustainable development.
Citycon defined its long-term strategic objectives related to environmental
responsibility in connection with its strategic planning in summer 2009. These
are presented in the company's first combined Annual and Social Responsibility
Report for 2009, which was published in March. The report also describes the
company's financial, social and environmental responsibility towards its various
stakeholders, applying the recommendations of the Global Reporting Initiative
(GRI) on the content and principles of corporate social responsibility
reporting. For the first time, Citycon also included data on its environmental
performance, with key figures on energy and water consumption, waste recycling
rates, and the carbon footprint of the company's business operations. These key
figures are also used to specify property-specific action plans to facilitate
the attainment of set goals.
Annual General Meeting 2010
Citycon Oyj's Annual General Meeting (AGM) was held in Helsinki on 11 March
2010. The AGM adopted the company's financial statements and discharged the
members of the Board of Directors and the Chief Executive Officer from liability
for the financial year 2009. The AGM decided on a dividend of EUR 0.04 per share
for the financial year 2009 and, in addition, on equity return of EUR 0.10 per
share from the invested unrestricted equity fund. The record date for the
dividend payout and equity return was 16 March 2010, and the dividend and equity
return were paid on 7 April 2010. In addition, the AGM approved the Board of
Directors' proposal for amending Article 11 of the Articles of Association and
authorised the Board of Directors to decide on the acquisition of the company's
own shares. The AGM did not discuss the Board of Directors' proposal for share
issue authorisation, since the Board of Directors withdrew its proposal before
the AGM.
Members of the Board of Directors and Their Remuneration
The number of members of the Board of Directors remained at nine, with Ronen
Ashkenazi, Gideon Bolotowsky, Raimo Korpinen, Tuomo Lähdesmäki, Claes Ottosson,
Dor J. Segal, Thom Wernink, Per-Håkan Westin and Ariella Zochovitzky being
re-elected to the Board for a one-year-term. Thom Wernink was elected as Board
Chairman and Ronen Ashkenazi as Deputy Chairman at the Board's organising
meeting, which was held after the Annual General Meeting. Personal details of
the members of the Board of Directors can be found on the corporate website, at
www.citycon.fi/board.
The AGM decided that Directors' fees remain unchanged, with the Chairman of the
Board of Directors being paid an annual fee of EUR 160,000, the Deputy Chairman
EUR 60,000 and ordinary members of the Board EUR 40,000. In addition, the AGM
decided that the Chairman of the Board and the Chairmen of the Board's
committees be paid a meeting fee of EUR 700 and the other Board and committee
members EUR 500 per meeting. Furthermore, it was decided that Directors not
residing in the Helsinki Metropolitan Area be compensated for accrued travel and
lodging expenses as well as other potential costs related to Board work.
Board Committees
In its meeting following the AGM, the Board also elected the members of the
Board committees. The members of the committees are listed in the enclosed
table.
Audit Remuneration Strategy and Nomination
Committee Committee Investment Committee
Committee
Raimo Korpinen Tuomo Lähdesmäki Ronen Ashkenazi Tuomo Lähdesmäki
(Chairman) (Chairman) (Chairman) (Chairman)
Gideon Bolotowsky Gideon Bolotowsky Raimo Korpinen Claes Ottosson
Thom Wernink Thom Wernink Dor J. Segal Thom Wernink
Per-Håkan Westin Ariella Zochovitzky Thom Wernink Per-Håkan Westin
Ariella Zochovitzky Per-Håkan Westin Ariella Zochovitzky
Independence of the Members of the Board of Directors
In the view of the Board of Directors, all Directors are independent of the
company as non-executive directors and Gideon Bolotowsky, Raimo Korpinen, Tuomo
Lähdesmäki, Thom Wernink and Per-Håkan Westin are independent of significant
shareholders.
Auditor
Ernst & Young Oy, a firm of authorised public accountants, continues as the
company auditor with Authorised Public Accountant Tuija Korpelainen continuing
as the chief auditor.
Amendment of Article 11 of the Articles of Association
As proposed by the Board of Directors, the AGM decided to amend Article 11 of
the company's Articles of Association in respect of the publication of the
notice to a general meeting in such a manner that the notice is published only
on the corporate website (previously also in a newspaper) and in respect of the
time of the publication in such a way that the notice is published at the
earliest two months and no later than three weeks before the meeting, however,
at least nine days before the record date of the meeting. These amendments to
the Articles of Association were recorded in the Trade Register on 13 April
2010.
Authorising the Board of Directors to Decide on the Acquisition of the Company's
Own Shares
As proposed by the Board of Directors, the AGM authorised the Board to decide on
the acquisition of a maximum of 20,000,000 of the company's own shares by using
unrestricted equity through public trading on the NASDAQ OMX Helsinki Ltd at the
market price prevailing at the time of the acquisition. The shares may be
acquired to improve the company's capital structure or to be used in the
financing or implementation of potential acquisitions or other corporate
transactions, or as part of the company's incentive plan. The company may hold,
convey or cancel the shares for the aforementioned purposes. The Board was
authorised to decide on other matters related to the acquisition of the
company's own shares. The acquisition authorisation will be valid until the next
Annual General Meeting.
Shareholders, Share Capital and Shares
Trading and Share Performance
During January-March, the number of Citycon shares traded on the NASDAQ OMX
Helsinki totalled 29.1 million (54.8 million) at a total value of
EUR 84.3 million (EUR 82.0 million). The highest price quoted during the period
was EUR 3.15 (EUR 2.02), and the lowest EUR 2.63 (EUR 1.30). The reported
trade-weighted average price was EUR 2.89 (EUR 1.50), and the share closed at
EUR 2.95 (EUR 1.46). The company's market capitalisation at the end of March
totalled EUR 654.1 million (EUR 322.7 million).
Shareholders
At the end of March, Citycon had a total of 4,115 (2,869) registered
shareholders, of which eight were account managers of nominee-registered shares.
Nominee-registered and other international shareholders held 197.7 million
(202.8 million) shares, or 89.2 per cent (91.8%) of shares and voting rights in
the company.
Notifications of Changes in Shareholdings
The company has not received any notifications of changes in shareholdings
during the reporting period.
Share Capital
At the end of March 2010, the company's registered share capital totalled
EUR 259,570,510.20 and the number of shares amounted to 221,715,474. During the
period, there were no changes in the company's share capital but the number of
shares grew by 655,739 shares as a result of share subscriptions made by
exercising option rights. The company has a single series of shares, with each
share entitling to one vote at general meetings of shareholders. The shares have
no nominal value.
Board Authorisations
Even though the Board of Directors withdrew its proposal to the 2010 Annual
General Meeting for a share issue authorisation, the Board still has an
authorisation from the 2007 AGM for issuing new shares and disposing of treasury
shares. The remaining number of shares that can be issued or disposed of on the
basis of this authorisation is 72,317,432. Based on this authorisation, the
Board may also decide on the granting of stock options and other special rights.
This authorisation is valid until 13 March 2012.
The 2010 AGM authorised the Board of Directors to decide on the acquisition of
20,000,000 of the company's own shares. The acquisition authorisation will be
valid until the next Annual General Meeting. The company had no treasury shares
at the end of the reporting period.
At period-end, the Board of Directors had no other authorisations.
Stock Options 2004
The Annual General Meeting held on 15 March 2004 authorised the issue of a
maximum of 3,900,000 stock options to the personnel of the Citycon Group. The
stock options are listed on the NASDAQ OMX Helsinki exchange.
The subscription period for Citycon's stock options 2004 B expired at the end of
March. A total of 1,301,217 shares were subscribed with these options, all of
them in the period of January-March this year. The subscription price that the
company received from these shares, a total of EUR 3.3 million, was recorded in
the invested unrestricted equity fund, in accordance with the terms and
conditions of the stock options. It is expected that the 645,478 shares
subscribed at the end of March will be recorded in the Trade Register on 22
April 2010, after which the total number of the company's shares will increase
to 222,360,952.
The number of unexercised outstanding stock options 2004 B totalled 17,002.
These stock options will be deleted as worthless from their holders' book-entry
accounts.
The enclosed table includes information on the number of remaining stock options
2004 and their subscription ratios and subscription prices. The full terms and
conditions of the stock option plan are available on the corporate website at
www.citycon.com/options.
Basic Information on Stock Options 2004 as at 31 March 2010
2004 B 2004 C
No. of options granted 1,090,000 1,050,000
No. held by Veniamo-Invest Oy ¹) 210,000 250,000
Subscription ratio, option/shares 1:1.2127 1:1.2127
Subscription price per share, EUR ²) 2.5208 4.2213
Subscription period began 1.9.2007 1.9.2008
Subscription period ended/ends 31.3.2010 31.3.2011
No. of options exercised 1,072,998 -
No. of shares subscribed with options 1,301,217 -
No. of unexercised options - 1,050,000
No. of shares that can be subscribed - 1,273,335
¹) Veniamo-Invest Oy, a wholly-owned subsidiary of Citycon Oyj, cannot subscribe
for its parent company's shares.
²) Following the dividend payment and equity return in 2010. The share
subscription prices are reduced by half of the per-share dividends paid and
per-share equity returned.
Events after the Reporting Period
In the summer of 2009, Citycon agreed on the divestment of the 72 residential
units that were to be built at the Liljeholmstorget shopping centre for a price
of about SEK 176 million (approx. EUR 16.3 million). The closing of the
transaction took place in early April. The gain on sale of the Liljeholmstorget
residential units was about SEK 36 million (approx. EUR 3.7 million). The gain
on sale has been recognised through fair value changes in the statement of
comprehensive income, in accordance with the progress made in the construction
of the residential units.
Outlook
Citycon continues to focus on increasing its net cash from operating activities
and direct operating profit. In order to implement this strategy, the company
will pursue value-added activities while cautiously monitoring the market for
potential acquisitions.
Due to market changes and tight financing conditions, the initiation of planned
projects will be carefully evaluated against stricter pre-leasing criteria.
Citycon intends to continue the divestment of its non-core properties to improve
the property portfolio and strengthen the company's financial position. The
company is also considering alternative property financing sources.
In 2010, Citycon's turnover is expected to grow approximately by 3 - 7 per cent
and direct operating profit approximately by 3 - 6 per cent compared with the
previous year based on existing portfolio. The estimate is based on completed
(re)development projects and prevailing low inflation level. In addition,
properties taken offline for planned (re)development projects will reduce net
rental income during the year. The company expects only moderate changes in its
direct result.
Helsinki, 20 April 2010
Citycon Oyj
Board of Directors
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 JANUARY - 31 MARCH 2010
Condensed Consolidated Statement of Comprehensive Income, IFRS
Q1/ Q1/ Change-
EUR million Note 2010 2009 % 2009
Gross rental income 47.2 44.3 6.5% 177.8
Service charge income 2.3 1.6 47.0% 8.5
Turnover 3 49.5 45.9 7.9% 186.3
Property operating expenses 4 18.8 15.3 22.3% 60.2
Other expenses from leasing operations 0.1 0.2 -44.6% 0.7
Net rental income 30.6 30.3 1.0% 125.4
Administrative expenses 4.5 4.6 -2.3% 17.8
Other operating income and expenses 0.1 0.0 - 0.0
Net fair value gains/ losses on investment
property 0.8 -31.6 - -97.4
Net gains on sale of investment property 3.3 0.1 - 0.1
Operating profit/loss 30.3 -5.8 - 10.3
Net financial income and expenses 13.1 12.2 7.3% 47.7
Profit/loss before taxes 17.2 -18.1 - -37.5
Current taxes -2.4 -1.7 39.4% -6.5
Change in deferred taxes -0.5 1.5 - 7.0
Profit/loss for the period 14.3 -18.3 - -36.9
Other comprehensive expenses /income
Net losses on cash flow hedges -8.9 -10.7 -17.0% -6.7
Income taxes relating to cash flow hedges 2.3 2.8 -17.0% 1.8
Exchange gains/losses on translating foreign
operations 0.9 -0.2 - 2.0
Other comprehensive expenses/income for the
period, net of tax -5.7 -8.2 -30.4% -3.0
Total comprehensive profit/loss for the period 8.6 -26.5 - -39.9
Profit/loss attributable to
Parent company shareholders 13.0 -16.8 - -34.3
Minority interest 1.3 -1.5 - -2.6
Total comprehensive profit/loss attributable to
Parent company shareholders 6.2 -24.9 - -38.4
Minority interest 2.4 -1.6 - -1.4
Earnings per share (basic), EUR 6 0.06 -0.08 - -0.16
Earnings per share (diluted), EUR 6 0.06 -0.08 - -0.16
Direct result 5 11.4 11.6 -2.1% 50.9
Indirect result 5 1.6 -28.4 - -85.2
Profit/loss for the period attributable to parent
company shareholders 13.0 -16.8 - -34.3
Condensed Consolidated Statement of Financial Position, IFRS
EUR million Note 31.3.2010 31.03.2009 31.12.2009
Assets
Non-current assets
Investment properties 7 2,193.5 2,097.3 2,147.4
Intangible assets and property, plant and
equipment 1.7 1.6 1.6
Deferred tax assets 10.9 9.6 8.6
Derivative financial instruments and other
non-
current assets 10 0.0 0.0 3.8
Total non-current assets 2,206.2 2,108.6 2,161.4
Current assets
Investment properties held for sale 8 18.6 - 26.0
Derivative financial instruments 10 1.7 9.4
Trade and other receivables 20.2 16.1 46.1
Cash and cash equivalents 9 48.7 13.7 19.8
Total current assets 89.3 39.2 91.8
Total assets 2,295.4 2,147.8 2,253.2
Liabilities and shareholders' equity
Equity attributable to parent company
shareholders
Share capital 259.6 259.6 259.6
Share premium fund 131.1 131.1 131.1
Fair value reserve 10 -29.2 -25.6 -22.7
Invested unrestricted equity fund 11 136.4 155.2 155.2
Retained earnings 11 211.8 224.2 207.8
Total equity attributable to parent company
shareholders 709.7 744.4 731.1
Minority interest 39.2 36.6 36.8
Total shareholders' equity 748.9 781.0 767.9
Liabilities
Long-term interest-bearing debt 12 1,215.5 1,169.1 1,175.4
Derivative financial instruments and other
non-interest bearing liabilities 10 41.9 36.4 32.5
Deferred tax liabilities 50.6 55.6 50.0
Total long-term liabilities 1,308.0 1,261.1 1,257.9
Short-term interest-bearing debt 12 150.9 25.3 146.3
Derivate financial instruments 10 1.0 1.4 1.5
Trade and other payables 86.6 79.0 79.7
Total short-term liabilities 238.5 105.7 227.4
Total liabilities 1,546.5 1,366.8 1,485.3
Total liabilities and shareholders' equity 2,295.4 2,147.8 2,253.2
Condensed Consolidated Cash Flow Statement, IFRS
Q1/ Q1/
EUR million Note 2010 2009 2009
Cash flow from operating activities
Profit/loss before taxes 17.2 -18.1 -37.5
Adjustments 9.2 44.0 145.7
Cash flow before change in working capital 26.4 25.9 108.3
Change in working capital -3.4 -0.5 10.7
Cash generated from operations 23.0 25.4 119.0
Paid interest and other financial charges -10.6 -11.4 -54.4
Interest income and other financial income received 0.1 0.8 0.3
Realised exchange rate losses/gains -2.8 7.8 11.8
Taxes paid -2.4 -0.5 -10.4
Net cash from operating activities 7.4 22.1 66.2
Cash flow from investing activities
Capital expenditure on investment properties as well as
on
intangible assets and PP&E 7 -23.0 -25.4 -130.9
Sale of investment properties 7, 8 22.2 3.1 3.1
Net cash used in investing activities -0.9 -22.4 -127.9
Cash flow from financing activities
Share subscriptions based on stock options 3.3 - -
Proceeds from short-term loans 12 22.5 11.5 149.7
Repayments of short-term loans 12 -19.4 -36.6 -77.1
Proceeds from long-term loans 12 88.4 84.0 295.1
Repayments of long-term loans 12 -73.0 -60.8 -273.0
Dividends and return from the invested unrestricted
equity fund 11 - - -30.9
Net cash from financing activities 21.8 -1.8 63.8
Net change in cash and cash equivalents 28.3 -2.1 2.1
Cash and cash equivalents at period-start 9 19.8 16.7 16.7
Effects of exchange rate changes 0.6 0.9 1.0
Cash and cash equivalents at period-end 9 48.7 13.7 19.8
Condensed Consolidated Statement of Changes in Shareholders' Equity, IFRS
Equity attributable to parent company shareholders
Invested
un-
Share Fair restricted Trans-
Share premium value equity lation Retained
EUR million capital fund reserve fund reserve earnings
Balance at 1 Jan. 2009 259.6 131.1 -17.7 177.3 -10.3 259.1
Total comprehensive
loss/profit for the period -7.9 -0.1 -16.8
Recognized gain in the
equity arising from
convertible bond buybacks 1.1
Dividends and return from
the invested unrestricted
equity fund (Note 11) -22.1 -8.8
Share-based payments 0.0
Balance at 31 March 2009 259.6 131.1 -25.6 155.2 -10.4 234.6
Balance at 1 Jan. 2010 259.6 131.1 -22.7 155.2 -9.5 217.3
Total comprehensive
loss/profit for the period -6.6 -0.2 13.0
Share subscriptions based
on stock options 3.3
Dividends and return from
the invested unrestricted
equity fund (Note 11) -22.1 -8.8
Share-based payments 0.1
Balance at 31 March 2010 259.6 131.1 -29.2 136.4 -9.7 221.5
Equity
attributable to Share-
parent holders'
company Minority equity,
shareholders interest total
Balance at 1 Jan. 2009 799,1 38,2 837,3
Total comprehensive loss/profit for the
period -24.9 -1.6 -26.5
Recognized gain in the equity arising from
convertible bond buybacks 1.1 1.1
Dividends and return from the invested
unrestricted equity fund (Note 11) -30.9 -30.9
Share-based payments 0.0 0.0
Balance at 31 March 2009 744.4 36.6 781.0
Balance at 1 Jan. 2010 731.1 36.8 767.9
Total comprehensive loss/profit for the
period 6.2 2.4 8.6
Share subscriptions based on stock options 3.3 3.3
Dividends and return from the invested
unrestricted equity fund (Note 11) -30.9 -30.9
Share-based payments 0.1 0.1
Balance at 31 March 2010 709.7 39.2 748.9
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basic Company Data
Citycon is a real estate company investing in retail premises. Citycon operates
mainly in Finland, Sweden and the Baltic countries. Citycon is a Finnish public
limited liability company established under Finnish law and domiciled in
Helsinki. The Board of Directors has approved the financial statements on 20
April 2010.
2. Basis of Preparation and Accounting Policies
Citycon prepares its consolidated financial statements in accordance with the
International Financial Reporting Standards (IFRS). The interim condensed
consolidated financial statements for the three months ended 31 March 2010 have
been prepared in accordance with IAS 34 Interim Financial Reporting. The
following amendments and interpretations to the existing standards have been
adopted in the interim financial statements: IAS 27 (revised) Consolidated and
separate financial statements and IFRS 3 (revised) Business Combinations.
Additional information on the new standards as well as on the amendments and
interpretations to the existing standards are available in Citycon's Financial
Statements 2009, in Chapter 3 "Changes in IFRS and accounting policies" under
the Notes to the Consolidated Financial Statements (see pages 18-19 in the
Financial Statements).
Otherwise, same accounting principles and policies are followed in the interim
financial statements as in the annual financial statements for the year 2009.
The interim financial statements do not include all the disclosures required in
the annual financial statements. Therefore, they should be read in conjunction
with Citycon's annual financial statements for the year 2009.
3. Segment Information
Citycon's business consists of the regional business units Finland, Sweden and
the Baltic Countries.
EUR million Q1/2010 Q1/2009 Change-% 2009
Turnover
Finland 32.5 33.5 -2.8% 131.3
Sweden 12.6 9.3 35.8% 41.0
Baltic Countries 4.3 3.1 40.0% 14.0
Total 49.5 45.9 7.9% 186.3
Net rental income
Finland 21.3 23.1 -7.8% 92.4
Sweden 6.4 5.2 22.3% 23.2
Baltic Countries 3.0 2.1 45.1% 9.8
Other 0.0 0.0 - 0.0
Total 30.6 30.3 1.0% 125.4
Direct operating profit/loss
Finland 20.5 21.5 -4.3% 86.3
Sweden 5.5 4.4 25.3% 20.0
Baltic Countries 2.7 1.9 42.6% 8.8
Other -2.4 -2.0 18.4% -7.4
Total 26.4 25.7 2.4% 107.7
Operating profit/loss
Finland 19.8 -4.0 - 21.2
Sweden 11.2 7.8 43.4% 0.3
Baltic Countries 1.7 -7.7 - -3.8
Other -2.4 -2.0 18.4% -7.4
Total 30.3 -5.8 - 10.3
EUR million
Assets 31.3.2010 31.03.2009 Change-% 31.12.2009
Finland 1,454.3 1,479.5 -1.7% 1,455.5
Sweden 612.0 480.8 27.3% 605.7
Baltic Countries 164.1 152.3 7.7% 157.6
Other 65.0 35.2 84.8% 34.3
Total 2,295.4 2,147.8 6.9% 2,253.2
The change in segment assets was due to the fair value changes in investment
properties and strengthened Swedish krona.
4. Property Operating Expenses
EUR million Q1/2010 Q1/2009 Change-% 2009
Heating and electricity 7.1 6.1 16.5% 20.2
Maintenance expenses 5.9 4.6 28.6% 20.1
Property personnel expenses 0.2 0.2 -7.7% 0.5
Administrative and management fees 0.5 0.5 -0.2% 2.5
Marketing expenses 1.2 0.6 87.1% 4.4
Property insurances 0.2 0.2 -9.4% 0.7
Property taxes 1.5 1.2 19.0% 4.7
Repair expenses 2.1 1.8 16.3% 6.9
Other property operating expenses 0.1 0.0 130.4% 0.1
Total 18.8 15.3 22.3% 60.2
Due to the nature of Citycon's business and the obligation to apply IFRS, the
consolidated statement of comprehensive income includes several items related to
non-operating activities. In addition to the consolidated statement of
comprehensive income under IFRS, Citycon also presents its profit/loss
attributable to parent company shareholders with direct result and indirect
result separately specified, in an attempt to enhance the transparency of its
operations and to facilitate comparability of reporting periods. Direct result
describes the profitability of the Group's operations during the reporting
period disregarding the effects of fair value changes, gains or losses on sales,
other extraordinary items and other comprehensive income items. Earnings per
share calculated based on direct result corresponds to the earnings per share
definition recommended by EPRA.
Direct result excludes the changes in fair value of financial instruments that
are recognized in the statement of comprehensive income under net financial
income and expenses. In order to hedge against interest rate risk, Citycon has
entered into, in accordance with its interest rate risk management policy,
interest rate and inflation derivatives which do not qualify under hedge
accounting treatment under IFRS. Changes in fair value of such derivatives are
recognized in the statement of comprehensive income under net financial income
and expenses. These derivatives hedge the group against interest rate risk and
in accordance with the terms of the derivatives Citycon receives floating money
market interest rate which has a matching interest rate determination procedure
with group's floating rate debt. The interest rate which Citycon pays under
these derivatives does not depend on the money market interest rate which means
that these derivatives hedge Citycon against rising floating interest rates. The
aim is to ensure effectiveness of the hedges by matching the interest rate
fixing procedure between the derivatives recognized in the statement of
comprehensive income under net financial income and expenses and floating rate
debt of Citycon.
Q1/ Q1/ Change-
EUR million 2010 2009 % 2009
Direct result
Net rental income 30.6 30.3 1.0% 125.4
Direct administrative expenses -4.3 -4.6 -5.6% -17.7
Direct other operating income and expenses 0.1 0.0 0.0
Direct operating profit 26.4 25.7 2.4% 107.7
Direct net financial income and expenses -12.9 -12.0 7.7% -47.7
Direct current taxes -1.8 -1.4 26.4% -6.2
Direct change in deferred taxes 0.1 0.0 -0.2
Direct minority interest -0.4 -0.7 -45.5% -2.8
Total direct result 11.4 11.6 -2.1% 50.9
Direct result per share (diluted), (diluted EPRA EPS),
EUR( 1)) 0.05 0.05 -1.7% 0.23
Indirect result
Net fair value gains/losses on investment property 0.8 -31.6 - -97.4
Profit on disposal of investment property 3.3 0.1 - 0.1
Indirect administrative expenses -0.2 - - -0.1
Indirect other operating income and expenses - - - 0.0
Movement in fair value of financial instruments -0.2 -0.3 -14.8% -0.1
Indirect current taxes -0.6 -0.3 103.9% -0.3
Change in indirect deferred taxes -0.6 1.5 - 7.3
Indirect minority interest -0.9 2.2 - 5.3
Total indirect result 1.6 -28.4 - -85.2
Indirect result per share, diluted 0.01 -0.13 - -0.39
Profit/loss for the period attributable to parent
company
shareholders 13.0 -16.8 - -34.3
¹) The calculation of the direct result per share is presented in the Note 6
"Earnings per Share".
6. Earnings per Share
Q1/ Q1/
2010 2009 2009
A) Earnings per share calculated from the profit/loss for the period
Earnings per share, basic
Profit/loss attributable to parent company shareholders, EUR
million 13.0 -16.8 -34.3
Issue-adjusted average number of shares, Million 221.3 221.0 221.0
Earnings per share (basic), EUR 0.06 -0.08 -0.16
Earnings per share, diluted
Profit/loss attributable to parent company shareholders, EUR
million 13.0 -16.8 -34.3
Expenses from convertible capital loan, the tax effect
deducted,
EUR million 1.1 - -
Profit/loss used in the calculation of diluted earnings per
share,
EUR million 14.0 -16.8 -34.3
Issue-adjusted average number of shares, Million 221.3 221.0 221.0
Convertible capital loan impact, Million 18.2 - -
Adjustment for stock options, Million 0.0 - -
Adjustments for long-term share-based incentive plan 0.2 - -
Issue-adjusted average number of shares used in the
calculation
of diluted earnings per share, Million 239.7 221.0 221.0
Earnings per share (diluted), EUR 0.06 -0.08 -0.16
The incremental shares from assumed conversions or any income or cost related to
dilutive potential shares are not included in calculating 2009 diluted per-share
figures because the profit attributable to parent company shareholders was
negative.
B) Earnings per share calculated from the direct result for the period
Direct result per share (diluted), (diluted EPRA EPS)
Direct result, EUR million (Note 5) 11.4 11.6 50.9
Expenses arising from convertible capital loan, adjusted with
the tax effect deduction, EUR million 1.1 1.1 4.2
Profit used in the calculation of direct result per share, EUR
million 12.4 12.7 55.1
Issue-adjusted average number of shares, Million 221.3 221.0 221.0
Convertible capital loan impact, Million 18.2 19.3 18.5
Adjustment for stock options, Million 0.0 - -
Adjustments for long-term share-based incentive plan 0.2 - 0.0
Issue-adjusted average number of shares used in the
calculation
of diluted earnings per share, Million 239.7 240.3 239.5
Direct result per share (diluted), (diluted EPRA EPS), EUR 0.05 0.05 0.23
7. Investment Property
Citycon divides its investment properties into two categories: investment
properties under construction (IPUC) and operative investment properties. At 31
March 2010, investment properties under construction category included
Espoontori, Jyväskylän Forum, Kirkkonummen Liikekeskus, Lahden Hansa, Myllypuro,
Myyrmanni and Åkersberga.
EUR million 31.3.2010
Investment properties Operative Investment
under onstruction investment properties
(IPUC) properties total
At period-start 269.8 1,877.6 2,147.4
Acquisitions 2.0 0.7 2.7
Investments 7.8 15.5 23.3
Disposals -1.0 -11.3 -12.3
Capitalized interest 0.2 0.9 1.1
Fair value gains on investment
property 1.7 14.6 16.3
Fair value losses on investment
property -10.4 -5.2 -15.5
Exchange differences 2.2 28.2 30.4
Transfers between items 42.8 -42.8 0.0
At period-end 315.3 1,878.2 2,193.5
EUR million 31.3.2009
Investment properties Operative Investment
under construction investment properties
(IPUC) properties total
At period-start 271.8 1,839.8 2,111.6
Acquisitions - - -
Investments 19.0 1.8 20.8
Disposals - -2.7 -2.7
Capitalized interest 1.8 0.3 2.1
Fair value gains on investment
property 7.4 0.8 8.2
Fair value losses on investment
property -10.0 -29.8 -39.8
Exchange differences -1.5 -1.4 -3.0
Transfers between items 226.4 -226.4 0.0
At period-end 514.9 1,582.4 2,097.3
EUR million 31.12.2009
Investment properties Operative Investment
under construction investment properties
(IPUC) properties total
At period-start 271.8 1,839.8 2,111.6
Acquisitions 0.0 0.0 0.0
Investments 84.4 33.4 117.8
Disposals - -2.7 -2.7
Capitalized interest 6.3 1.6 7.9
Fair value gains on investment
property - 5.5 5.5
Fair value losses on investment
property -14.9 -88.0 -102.9
Exchange differences 10.6 17.3 27.9
Transfers between items -88.3 70.6 -17.7
At period-end 269.8 1,877.6 2,147.4
An external professional appraiser has conducted the valuation of the company's
investment properties with a net rental income based cash flow analysis. Market
rents, occupancy rate, operating expenses and yield requirement form the key
variables used in the cash flow analysis. The segments' yield requirements and
market rents used by the external appraiser in the cash flow analysis were as
follows:
Weighted average yield Weighted average market rents
requirement (%) (EUR/m²)
Q1/2010 Q1/2009 2009 Q1/2010 Q1/2009 2009
Finland 6.6 6.5 6.6 23.0 22.1 22.5
Sweden (1)) 6.4 6.5 6.4 22.7 18.0 21.3
Baltic Countries 8.2 7.6 8.1 21.4 20.1 21.4
Average 6.6 6.5 6.6 22.8 21.0 22.1
1) Figures for Sweden on 31 March 2010 and 31 December 2009 include the
development projects of the Liljeholmstorget and Åkersberga shopping centres.
8. Investment Properties Held for Sale
In 2009, the Investment properties held for sale comprised buildings rights
acquired for the Myllypuro development project and 181 residential units in
Åkersberga Centrum. Buildings rights acquired for the Myllypuro development
project were sold to three different residential investors through share
transactions on 12 January 2010. A gain on sale of EUR 2.3 million was recorded
from this transaction. On 31 March 2010, investment properties held for sale
include 181 residential units in Åkersberga Centrum, which were agreed in July
2009 to be sold to Tegeltornet AB.
EUR million 31.3.2010 31.3.2009 31.12.2009
At period-start 26.0 - -
Investments 0.1 - 8.3
Disposals -8.4 - -
Exchange differences 1.0 - -
Transfers from investment properties - - 17.7
At period-end 18.6 - 26.0
9. Cash and Cash Equivalents
EUR million 31.3.2010 31.3.2009 31.12.2009
Cash in hand and at bank 14.8 9.9 13.5
Short-term deposits 33.9 3.8 6.4
Total 48.7 13.7 19.8
10. Derivative Financial Instruments
31.3.2010 31.3.2009 31.12.2009
Nominal Fair Nominal Fair Nominal Fair
EUR million amount value amount value amount value
Interest rate derivatives
Interest rate swaps
Maturity:
less than 1 year 51.5 -0.9 86.0 1.5 48.8 -1.2
1-2 years 110.0 -2.9 45.7 -1.9 70.0 1.0
2-3 years 50.0 -2.5 110.0 0.7 60.0 -3.0
3-4 years 236.9 -16.9 50.0 -1.7 262.9 -14.5
4-5 years 202.4 -11.0 228.4 -15.7 198.0 -7.3
over 5 years 138.5 -6.1 118.6 -11.0 97.9 -4.0
Subtotal 789.2 -40.2 638.6 -28.1 737.6 -29.0
31.3.2010 31.3.2009 31.12.2009
Nominal Fair Nominal Fair Nominal Fair
EUR million amount value amount value amount value
Foreign exchange derivatives
Forward agreements
Maturity:
less than 1 year 19.6 -0.1 17.1 8.8 22.0 -0.2
Total 808.8 -40.3 655.7 -19.3 759.7 -29.2
The fair value of derivative financial instruments represents the market value
of the instrument with prices prevailing at the end of the period. Derivative
financial instruments are used in hedging the interest rate risk of the interest
bearing liabilities and foreign currency risk.
The fair values include foreign exchange rate gain of EUR 1.6 million (EUR 9.4
million) which is recognized in the statement of comprehensive income under net
financial income and expenses.
Hedge accounting is applied for interest rates swaps which have nominal amount
of EUR 763.5 million (EUR 615.8 million). The fair value loss recognized under
other comprehensive income taking into account the tax effect totals EUR -6.6
million (EUR -7.9 million).
11. Dividends and Return from the Invested Unrestricted Equity Fund
In accordance with the proposal by the Board of Directors and the decision by
the Annual General Meeting held on 11 March 2010, dividend for the financial
year 2009 amounted to EUR 0.04 per share (EUR 0.04 for the financial year 2008)
and EUR 0.10 per share was decided to be returned from the invested unrestricted
equity fund (EUR 0.10 for the financial year 2008).
Dividend and equity return of EUR 30.9 million for the financial year 2009 (EUR
30.9 million for the financial year 2008) were paid on 7 April 2010.
12. Interest-bearing Liabilities
During the period, repayments of other bank loans amounting to EUR 3.4 million
were made in line with previously disclosed repayment terms.
Other proceeds and repayments from/of long-term loans in the cash-flow statement
arose from the use of revolving credit facilities.
13. Contingent Liabilities
EUR million 31.3.2010 31.3.2009 31.12.2009
Mortgages on land and buildings 44.9 40.3 42.9
Bank guarantees 44.6 45.6 45.4
Capital commitments 24.1 12.8 44.0
On 31 December 2009, Citycon had capital commitments of EUR 24.1 million (EUR
12.8 million) relating mainly to development and redevelopment projects.
14. Related Party Transactions
There were no significant transactions with the related parties during the
period.
15. Key Figures
Q1/ Q1/ Change-
2010 2009 % 2009
Earnings per share (basic), EUR 0.06 -0.08 - -0.16
Earnings per share (diluted), EUR 0.06 -0.08 - -0.16
Equity per share, EUR 3.20 3.37 -5.0% 3.31
Net asset value (EPRA NAV) per share, EUR 3.43 3.62 -5.0% 3.54
Equity ratio, % 32.7 36.4 - 34.2
The formulas for key figures can be found from the 2009 annual financial
statements.
Financial reports in 2010
Citycon will issue two more interim reports during the financial year 2010 as
follows:
January-June 2010, on Wednesday 14 July 2010, at approximately 9:00 a.m. and
January-September 2010, on Wednesday 13 October 2010, at approximately 9:00 a.m.
For more investor information, please visit the corporate website at
www.citycon.com.
For further information, please contact:
Petri Olkinuora, CEO
Tel +358 20 766 4401 or +358 400 333 256
petri.olkinuora@citycon.fi
Eero Sihvonen, Executive Vice President and CFO
Tel +358 20 766 4459 or +358 50 557 9137
eero.sihvonen@citycon.fi
Distribution:
NASDAQ OMX Helsinki
Major media
www.citycon.com
REPORT ON REVIEW OF CITYCON OYJ'S INTERIM FINANCIAL INFORMATION FOR THE PERIOD
JANUARY 1 - MARCH 31, 2010
To the Board of Directors of Citycon Oyj
Introduction
We have reviewed the accompanying statement of financial position of Citycon Oyj
as of March 31, 2010 and the related statements of comprehensive income, changes
in equity and cash flows for the three-month period then ended, and explanatory
notes prepared in accordance with International Financial Reporting Standards as
adopted by the EU. The Board of Directors and the Managing Director are
responsible for the preparation and fair presentation of this interim financial
information in accordance with the Securities Market Act, chapter 2, paragraph
5 a. 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 a, sub-paragraph 7.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements 2410, "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity." A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with
Standards on Auditing and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion.
Opinion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial information, prepared in accordance with
International Financial Reporting Standards as adopted by the EU, does not give
a true and fair view of the financial position of the entity as at March
31, 2010, and of its financial performance and its cash flows for the
three-month period then ended in accordance with the Securities Market Act.
Helsinki, April 20, 2010
Ernst & Young Oy
Authorized Public Accountants
Tuija Korpelainen, Authorized Public Accountant
[HUG#1406025]