9:00 a.m.
Financial Results for 1 January-31 December 2009
Summary of the Last Quarter of 2009
- Turnover grew to EUR 48.9 million (Q3/2009: EUR 45.9 million).
- Net rental income declined by 2.7 per cent to EUR 31.6 million (EUR 32.5
million), mainly due to higher operating expenses than in the previous quarter,
reflecting common seasonal fluctuation.
- Net cash from operating activities per share was EUR 0.06 (EUR 0.05).
- Earnings per share were EUR -0.11 (EUR 0.06).
- Direct result per share (diluted) was EUR 0.06 (EUR 0.06).
- The fair value change of investment properties was EUR -38.6 million (EUR -1.2
million). The fair value change was mainly due to slightly reduced net rental
income growth in the appraisal assumptions and higher valuation yield in the
Baltic Countries. The fair value of investment properties was EUR 2,147.4
million (EUR 2,162.7 million).
- The average net yield requirement for investment properties remained at the
previous quarter's level and was 6.6 per cent (6.6 %) at the end of the period,
according to an external appraiser.
- Net financial expenses totalled EUR 12.0 million (EUR 11.7 million).
- On the basis of its loan agreement covenants, Citycon's interest cover ratio
improved to 2.3x (2.2x) and equity ratio fell to 40.6 per cent (42.4 %).
- Citycon issued new bonds with a total, aggregate value of EUR 40 million
directed at domestic retail investors. The proceeds thereof will be used to
finance (re)development projects.
- During the last quarter of 2009, the Liljeholmstorget shopping centre
construction project in Stockholm and the redevelopment and extension project of
the Rocca al Mare shopping centre in Tallinn, Estonia were completed.
- The Board of Directors proposes a per-share dividend of EUR 0.04 (EUR 0.04)
and, additionally, a return of equity from invested unrestricted equity fund of
EUR 0.10 (EUR 0.10) per share.
Summary of the Year 2009
- Turnover increased by 4.5 per cent to EUR 186.3 million (2008: EUR 178.3
million). This increase was due to the growth in gross leasable area and active
development of the retail properties. Turnover growth was adversely impacted by
slightly higher vacancy rates.
- Profit/loss before taxes was EUR -37.5 million (EUR -162.3 million), including
a EUR -97.4 million (EUR -216.1 million) change in the fair value of investment
properties.
- Net rental income increased by 3.0 per cent to EUR 125.4 million (EUR 121.8
million). If the impact of the weakened Swedish krona (SEK) is excluded, net
rental income increased by 5.0 per cent.
- Net rental income from like-for-like properties rose by 0.8 per cent.
- The company's direct result increased to EUR 50.9 million (EUR 43.8 million).
- Direct result per share (diluted) rose to EUR 0.23 (EUR 0.20).
- Earnings per share were EUR -0.16 (EUR -0.56). Changes in the fair value of
investment properties have a substantial impact on earnings per share.
- The occupancy rate was 95.0 per cent (96.0 %). The decrease in the occupancy
rate resulted from a slight increase in the vacancy rate in Finland, Sweden and
in the Baltic Countries.
- Net cash from operating activities per share increased to EUR 0.30 (EUR
0.21). This growth was mainly due to one-off exchange rate gains, lower interest
expenses, and positive changes in working capital as well as increased operating
profit.
- The equity ratio was 34.2 per cent (38.5 %). This decrease resulted mainly
from fair value changes in investment properties 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 205.6 million,
including unutilised committed debt facilities amounting to EUR 185.8 million
and EUR 19.8 million in cash. The available liquidity will cover the authorised
investments and scheduled debt interest and repayments at least until the end of
2010, without any additional financing sources.
- In June, an agreement was concluded on the sale of the apartments under
construction in Liljeholmen, Sweden, totalling SEK 176 million (approximately
EUR 16.3 million).
- In July, Citycon agreed on the sale of the 181 apartments in Åkersberga
Centrum in Greater Stockholm area, Sweden, for approximately EUR 16.7 million.
Concurrently, it was decided to redevelop the Åkersberga Centrum shopping
centre. The estimated total investment amounts to EUR 46 million with Citycon
accounting for 75 per cent.
Key figures
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-% (1))
Turnover, EUR million 48.9 45.2 45.9 186.3 178.3 4.5%
Net rental income, EUR
million 31.6 30.2 32.5 125.4 121.8 3.0%
Operating loss/profit, EUR
million -12.4 -27.9 27.4 10.3 -105.0 −
% of turnover − − 59.6% 5.5% − −
Loss/profit before taxes,
EUR million -24.4 -40.9 15.6 -37.5 -162.3 -76.9%
Loss/profit attributable
to parent company
shareholders, EUR million -23.8 -30.7 13.3 -34.3 -124.1 -72.4%
Direct operating profit,
EUR million 26.3 25.6 28.6 107.7 105.3 2.3%
% of turnover 53.9% 56.7% 62.2% 57.8% 59.1% −
Direct result, EUR million 12.5 11.8 14.2 50.9 43.8 16.3%
Indirect result, EUR
million -36.3 -42.5 -0.9 -85.2 -167.9 -49.3%
Earnings per share
(basic), EUR -0.11 -0.14 0.06 -0.16 -0.56 -72.4%
Earnings per share
(diluted), EUR -0.11 -0.14 0.06 -0.16 -0.56 -72.4%
Direct result per share
(diluted), (diluted EPRA
EPS), EUR 0.06 0.05 0.06 0.23 0.20 15.2%
Net cash from operating
activities per share, EUR 0.06 0.07 0.05 0.30 0.21 42.4%
Fair value of investment
properties, EUR million
(2)) 2,162.7 2,147.4 2,111.6 1.7%
Equity per share, EUR 3.41 3.31 3.62 -8.5%
Net asset value (EPRA NAV)
per share, EUR 3.64 3.54 3.88 -8.8%
EPRA NNNAV per share, EUR 3.46 3.35 3.80 -11.8%
Equity ratio, % 35.9 34.2 38.5 −
Gearing, % 159.5 169.5 141.3 −
Net interest-bearing debt
(fair value), EUR million 1,272.3 1,312.2 1,194.6 9.8%
Net rental yield, % 6.1 6.1 5.8 −
Net rental yield,
like-for-like properties,
% 6.6 6.7 6.0 −
Occupancy rate, % 94.7 95.0 96.0 −
Personnel (at the end of
the period) 117 119 113 5.3%
Dividend per share, EUR 0.04 (3)) 0.04 -
Return from invested
unrestricted equity fund per
share, EUR 0.10 (3)) 0.10 -
Dividend and return from invested
unrestricted equity fund per share
total, EUR 0.14 (3)) 0.14 -
1) Change-% is calculated from exact figures and refers to the change between
2009 and 2008.
2) Due to the adoption of amended IAS 40 Investment property -standard, the fair
value of investment properties also includes development properties.
3) Proposal by the Board.
On 9 February 2010, Citycon's Board of Directors approved the company's
Financial Statements for the accounting period 1 January-31 December 2009. They
can be found at www.citycon.com.
CEO Petri Olkinuora's Comments on the Year 2009: Successful completion of two
(re)development projects
"The company's net cash from operating activities per share and direct result
per share were among the best in the company's history. Direct result increased
to EUR 50.9 million, thanks to growth in rental income and lower interest costs.
Citycon's financial position is stable and we have sufficient committed,
non-utilized credit facilities to finance the projects under construction.
Over the year, the occupancy rate showed only a slight decrease and was 95 per
cent. Total sales of all of Citycon's shopping centres remained at almost their
previous year's levels, although the retail environment continued to
deteriorate.
At the end of 2009, the largest development projects in the history of Citycon
were completed in Stockholm and in Tallinn where Liljeholmstorget and Rocca al
Mare were opened to the public very successfully. These completed projects
strengthen the company's market position within the Swedish and the Estonian
shopping centre business.
Citycon continues to have several (re)development projects under planning in all
of its operating countries. The company's investments mainly aim at improving
the long-term competitiveness of its existing property portfolio. The extension
and redevelopment of the Åkersberga Centrum shopping centre in Sweden, the
thorough redevelopment of the Espoontori shopping centre in Finland, and the
construction of the new Helsinki Myllypuro shopping centre are some of the
latest projects. Significant development projects currently under planning in
Finland include the extension of Iso Omena above the future metro station, a new
shopping centre to be constructed in Vantaa Martinlaakso, and the redevelopment
of the shopping centre Forum in Jyväskylä. These projects are targeted to meet
the quality standards of the international LEED (Leadership in Energy and
Design) certification."
Business Environment
The year 2009 had a challenging start in all of Citycon's operating countries.
The global recession turned into a depression most visibly in the Baltic
countries, also the Finnish and the Swedish economies contracted. During 2009,
developments in the real economy were reflected in retailing.
In 2009, Finnish retail sales shrank by 1.6 per cent but grocery sales grew by
1.9 per cent in January-November. In Sweden, retail sales grew by 2.8 per cent
and grocery sales by 1.9 per cent. Trade slowed down most in the Baltic
countries. Retail sales reduced by 15.0 per cent and grocery sales by 8.0 per
cent in Estonia, and by 18.3 per cent and 10.3 per cent in Lithuania. (Sources:
Statistics Finland, Statistics Sweden, Statistics Estonia) Affordable clothing
sales grew in Finland and Sweden, whereas furniture and car sales suffered most
(Newsec Property Report, Autumn 2009). The year 2009 was the second successive
year for weakened retail trade profitability in Finland (source: Statistics
Finland).
In Sweden, retail sales took an upward swing in the summer, but in Finland and
in the Baltic countries they continued on a downward trend throughout 2009. The
economic situation continues to be difficult in the Baltic countries. (Sources:
Statistics Finland, Statistics Sweden, Statistics Estonia)
Consumer confidence in economic development weakened in the summer, but slowly
began to recover, especially in Finland and in Sweden. Inflation turned into a
consumer price decline, and interest rates remained at record low levels in all
of Citycon's operating countries. (Sources: Statistics Finland, Statistics
Sweden, Statistics Estonia)
The instability of the global financial market has impacted the price and
availability of financing throughout the year. Toward the end of 2009,
availability did improve but the margins on debt financing remained rather high.
Business and Property Portfolio Summary
Citycon is an active owner, operator and long-term developer of shopping
centres, laying the foundation for a successful retail business. The company
aims to increase its net yield from shopping centres over the long term through
active retail property management and systematic redevelopment efforts.
Citycon's retail properties serve both consumers and retailers.
Citycon is the market leader in the Finnish shopping centre business, holds a
strong position in Sweden and a firm foothold in the Baltic countries. It
assumes responsibility for the business operations and the administration of its
investment properties.
Citycon is involved in the day-to-day operations of its shopping centres and, in
co-operation with its tenants, aims to increase the attractiveness, footfall,
sales and profits of its shopping centres on a continuous basis.
Citycon is a pioneer in the Nordic shopping centre market, seeking to factor
environmental considerations into its shopping centre management and its
redevelopment and development projects. The Trio shopping centre in Lahti,
Finland, was the first project in the Nordic countries to be awarded the LEED
certification in 2009. The Trio project was one of Citycon's three pilot
projects for sustainable construction.
Citycon operates in Finland, Sweden and the Baltic countries, and the company's
investments are focused on areas with expected population and purchasing power
growth.
At the end of 2009, Citycon owned 33 (33) shopping centres and 51 (52) 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 entire property portfolio totalled EUR 2,147.4 million (EUR 2,111.6
million) with Finnish properties accounting for 67.2 per cent (70.7 %), Swedish
properties for 25.6 per cent (21.9 %) and Baltic properties for 7.3 per cent
(7.4 %) of the portfolio. The gross leasable area at the end of the period was
961,150 square metres.
Changes in the Fair Value of Investment Properties
Citycon measures its investment properties at fair value, under the IAS 40
standard, according to which changes in the fair value of investment properties
are recognised through profit or loss. Due to the amendment to IAS 40 standard
on 1 January 2009, Citycon also measures its development properties at fair
value instead of at cost, and no longer presents development properties
separately from investment properties on the statement of financial position.
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 2009, however, Citycon had its properties valued
on a quarterly basis by an external appraiser, due to market volatility.
Citycon's property portfolio is valued by Realia Management Oy, part of the
Realia Group. Realia Management Oy is the preferred appraisal service provider
of CB Richard Ellis in Finland. A summary of Realia Management Oy's Property
Valuation Statement at the end of 2009 can be found at
www.citycon.com/valuation. 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.
In 2009, the fair value of Citycon's property portfolio decreased. This decrease
was due to changes in the general conditions in the property and financial
market and to higher yield requirements resulting from the general economic
recession. The period saw a total value increase of EUR 5.5 million and a total
value decrease of EUR 102.9 million. The net effect of these changes on the
company's profit was EUR -97.4 million (EUR -216.1 million).
On 31 December 2009, the average net yield requirement defined by Realia
Management Oy for Citycon's property portfolio came to 6.6 per cent (31 December
2008: 6.4 %, and 30 September 2009: 6.6 %).
Lease Portfolio and Occupancy Rate
At the end of the financial year, Citycon had a total of 4,235 (4,143) leases.
The average remaining length of the lease agreements was 3.1 years (3.1 years).
Citycon's property portfolio's net rental yield was 6.1 per cent (5.8 %) and its
occupancy rate was 95.0 per cent (96.0 %). The decrease in occupancy rate was a
result of a slight increase in vacancies across the portfolio in all of
Citycon's operating regions, due to toughened market conditions.
During the period under review, Citycon's net rental income grew by 3.0 per cent
to EUR 125.4 million. The leasable area increased by 2.5 per cent to 961,150
square metres. Excluding the impact of the weakened Swedish krona (SEK), net
rental income from like-for-like properties grew by 0.8 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. 78.5 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).
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 of net rent and potential service charges paid by a
tenant to Citycon, of the tenant's sales, excluding VAT. The VAT percentage is
an estimate.
Lease Portfolio Summary
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Number of leases started during
the period 386 255 140 873 572 52,6
Total area of leases started,
sq.m. 69,262 69,730 23,789 141,628 124,960 13,3
Occupancy rate at end of the period, % 94.7 95.0 96.0 -1.0
Average remaining length of lease portfolio
at the end of the period, year 3.0 3.1 3.1 (1)) 0.0
1) Interpretation of the remaining length of a lease agreement has been revised.
Acquisitions and Divestments
Citycon continues to focus on the development and redevelopment of the company's
shopping centres, and monitors the developments in the shopping centre markets
across its operating regions. No new shopping centres were acquired during 2009.
At the start of January, Citycon divested all shares in its subsidiary MREC
Kiinteistö Oy Keijutie 15. The debt-free sales price of this non-core property
in Lahti amounted to approximately EUR 3 million and the company booked a gain
on sale of EUR 0.1 million. As part of its strategy, the company aims to
continue divestments of non-core properties.
In June, Citycon agreed to sell the 72 apartments under construction within the
Liljeholmstorget shopping centre in Stockholm, Sweden, for approximately SEK
176 million (approximately EUR 16.3 million). The gain on sale is estimated to
be around SEK 30 million (around EUR 2.8 million), depending on the final
construction expenditure. The gain on sale will be recognised under fair value
changes in the statement of comprehensive income as the residential construction
progresses.
In July, Citycon agreed on the sale of the 181 apartments within the Åkersberga
Centrum, Sweden, for approximately SEK 181 million (approximately EUR 16.7
million). The intention was to execute the deal during the last quarter of
2009, but the closing is now expected to take place during the first half of
2010, due to a delay in the official property registration process. This
transaction is not expected to generate any gain on sale.
Development Projects
Citycon is pursuing a long-term increase in the footfall and cash flow, as well
as in the efficiency and return on its retail properties. The aim of the
company's development activities is to keep its shopping centres competitive for
both customers and tenants.
In the short term, redevelopment projects may weaken returns from some
properties, as some retail premises may temporarily have to be vacated for
refurbishment, which affects rental income. Citycon aims to carry out its
redevelopment projects phase by phase, so that the whole shopping centre does
not have to be closed during the works in question, thus ensuring a continuous
cash flow.
Completed (Re)development Projects
Towards the year end 2009, Citycon completed two major 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.
Liljeholmstorget Galleria
In October, Citycon opened the Liljeholmstorget Galleria shopping centre, the
largest single development project in Citycon's history. The total investment in
this redevelopment project was almost EUR 200 million, including the initial
acquisition cost. The gross leasable area in this south-western Stockholm
shopping centre is 28,000 square metres, and the premises are essentially fully
let. The three storey shopping centre houses some 90 tenants, including the ICA
Kvantum and Willys Hemma grocery stores, Systembolaget, the well-known fashion
stores KappAhl, H&M, Gina Tricot and Vero Moda, as well as numerous restaurants,
sporting goods and interior decoration shops. Liljeholmstorget Galleria also
houses an underground parking hall for 900 cars.
Liljeholmstorget Galleria has an excellent location at a busy transport node, in
the middle of a developing residential and business district. Since a
precondition for the building permit was that housing would also be constructed,
72 new rental flats will be built above the shopping centre. Apartments are not
within Citycon's core business and therefore the company has already agreed to
sell them.
Rocca al Mare
The three-stage and three-year Rocca al Mare redevelopment and extension project
was completed in November. This shopping centre was built in the 1990s and
Citycon acquired it in 2005, deciding at the time to redevelop it thoroughly and
to substantially extend it. This shopping centre is located in a well-off
district eight kilometres west of the heart of Tallinn. Today, Rocca al Mare is
the largest shopping centre in Estonia with a total of 53,500 square metres of
leasable area. The premises are fully let. Rocca al Mare accommodates some 160
retail shops, including Ivo Nikkolo, New Yorker and the first Estonian Marks &
Spencer, as well as the largest Baltic Prisma hypermarket.
Citycon's total investment in Rocca al Mare amounts to approximately EUR 120
million, including the initial acquisition cost. All authorised investments
having been implemented, the Rocca al Mare shopping centre may still be extended
by a further 4,000 square metres.
(Re)development Projects in Progress
During the period under review, Citycon initiated the redevelopment and
extension project of the Åkersberga Centrum located in the Österåker district of
Greater Stockholm area. The total budget for the project is about SEK 467
million (EUR 46 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 redeveloped 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 completed in
2011. The shopping centre will remain open throughout the project.
The enclosed table lists the most significant development and redevelopment
projects in progress and completed during 2009, as approved by the Board of
Directors. Capital expenditure during 2009 on all development projects reached
EUR 24.2 million in Finland, EUR 95.9 million in Sweden and EUR 13.9 million in
the Baltic Countries.
(Re)development projects completed in 2009 and in progress on 31 December 2009
(1))
Actual
Estimated gross capital Estimated
total expenditure final year of
investment by 31 Dec. 2009 completion
Location (EUR million) (EUR million)
Stockholm,
Liljeholmstorget Sweden 138(2)) 132.1 completed
Tallinn,
Rocca al Mare Estonia 58.3 49.9(3)) completed
Österåker,
Åkersberga Centrum Sweden 45.6 16.0 2011
Seinäjoki,
Torikeskus Finland 4 2.7 2010
Hansa (Trio) Lahti, Finland 8 0.5 2010
Myyrmanni Vantaa, Finland 4.8 0.6 2010
1) Calculated at end of period exchange rates.
2) Does not include apartments to be sold.
3) Remaining capital expenditure payable in 2010.
(Re)development projects under planning
Citycon and the construction company NCC were jointly awarded a provisional
contract for the design of a metro centre to be built for the western metro line
at Matinkylä in Espoo, adjacent to the Iso Omena shopping centre. The aim of
Citycon and NCC is to create a metro centre which combines excellent commercial
services with smooth connections between the metro train and its feeder
terminal. The western metro line connecting Helsinki and Espoo is due for
completion in 2014. Other redevelopment projects under planning in Finland are
the Martinlaakso shopping centre in Vantaa and the Forum shopping centre in
Jyväskylä.
More information on planned projects can be found in the Annual Report 2009, to
be published during week 9/2010.
Business Units
Citycon's business operations are divided into the business units Finland,
Sweden and the Baltic Countries. The Swedish and Baltic business units are
sub-divided into the business areas Retail Properties and Property Development.
The Finnish business unit was reorganised at 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. Citycon's
market share was approximately 22 per cent of the Finnish shopping centre market
in 2009 (source: Entrecon). During the period under review, the company's net
rental income from its Finnish operations came to EUR 92.4 million (EUR 90.9
million). The business unit accounted for 73.7 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
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Number of leases started during
the period 84 193 65 295 452 -34.7
Total area of leases started,
sq.m. 18,420 31,930 20,530 57,220 79,130 -27.7
Occupancy rate at end of the
period, % 94.1 94.6 95.7 -1.1
Average remaining length of lease portfolio
at the end of the period, year 2.9 2.8 3.1 -9.7
Financial Performance, Finland
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Gross rental income, EUR million 31.5 30.8 31.3 126.5 122.5 3.3
Turnover, EUR million 32.7 32.0 32.4 131.3 126.8 3.5
Net rental income, EUR million 23.0 22.6 23.4 92.4 90.9 1.7
Net fair value losses/gains on
investment property, EUR million -14.6 -48.6 -4.6 -65.1 -154.3 -57.8
Operating profit/loss, EUR
million 6.8 -21.7 17.4 21.2 -62.9 -
Capital expenditure, EUR million 15.3 10.0 2.8 24.5 69.2 -64.6
Fair value of investment properties, EUR
million ((1) 1,449.7 1,442.0 1,494.0 -3.5
Net rental yield, % ((2) 6.4 6.5 6.0 -
Net rental yield, like-for-like properties, % 6.6 6.7 6.1 -
1) Due to the adoption of amended IAS 40 Investment property -standard, the fair
value of investment properties also includes development properties.
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. They are
located in the Greater Stockholm and Greater Gothenburg areas and in Umeå. The
company's net rental income from Swedish operations decreased by 3.5 per cent
and totalled EUR 23.2 million (EUR 24.1 million). Excluding the impact of the
weakened Swedish krona, net rental income from Swedish operations would have
increased by 6.5 per cent from the previous year. The business unit accounted
for 18.5 per cent of Citycon's total net rental income.
The key figures of the Swedish property portfolio are presented below.
Development projects have been covered previously in this document.
Lease Portfolio Summary, Sweden
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Number of leases started during the
period 245 19 71 449 58 674.1
Total area of leases started, sq.m. 42,163 9,060 2,995 59,351 15,340 286.9
Occupancy rate at end of the period, % 95.0 94.7 96.0 -1.3
Average remaining length of lease portfolio
at the end of the period, year 2.2 3.0 2.4 25.0
Financial Performance, Sweden
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Gross rental income, EUR million 11.4 9.9 9.6 39.3 41.1 -4.5
Turnover, EUR million 12.4 10.1 9.9 41.0 41.9 -2.0
Net rental income, EUR million 6.1 5.3 6.4 23.2 24.1 -3.5
Net fair value losses/gains on
investment property, EUR million -17.0 -21.4 -1.3 -19.6 -70.1 -72.1
Operating loss/profit, EUR million -12.0 -16.9 4.4 0.3 -49.1 -
Capital expenditure, EUR million 33.4 21.7 29.1 95.9 65.6 46.0
Fair value of investment properties, EUR million
((1) 551.0 548.8 462.4 18.7
Net rental yield, % ((2) 4.8 4.7 5.0 -
Net rental yield, like-for-like properties, % 6.4 6.5 5.6 -
Baltic Countries
At the end of 2009, Citycon owned three shopping centres in the Baltic
countries: 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 tenants' requests
for rental rebates. At the same time, the risk of credit loss has increased. The
Baltic vacancy rate has, however, not increased to any substantial degree during
the period under review. Net rental income from the Baltic operations amounted
to EUR 9.8 million (EUR 6.8 million). The business unit accounted for
7.8 per cent of Citycon's total net rental income.
The key figures of the Baltic property portfolio are presented below. Ongoing
development projects have been covered previously in this document.
Lease Portfolio Summary, Baltic Countries
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Number of leases started during the
period 57 43 4 129 62 108.1
Total area of leases started, sq.m. 8,679 28,740 264 25,057 30,490 -17.8
Occupancy rate at end of the period, % 99.7 99.4 99.8 -0.4
Average remaining length of lease portfolio
at the end of the period, year 5.4 5.2 5.4 (1)) -3.7
1) Interpretation of the remaining length of a lease agreement has been revised.
Financial Performance, Baltic Countries
Q4/ Q4/ Q3/
2009 2008 2009 2009 2008 Change-%
Gross rental income, EUR million 2.3 3.0 3.4 12.0 9.3 29.1
Turnover, EUR million 3.8 3.1 3.6 14.0 9.6 45.5
Net rental income, EUR million 2.5 2.2 2.7 9.8 6.8 44.6
Net fair value losses/gains on investment
property, EUR million -7.1 10.6 4.7 -12.7 8.3 -
Operating loss/profit, EUR million -4.9 12.6 7.2 -3.8 14.4 -
Capital expenditure, EUR million 1.7 6.1 1.2 13.9 22.7 -38.8
Fair value of investment properties, EUR million
((1) 162.0 156.6 155.3 0.8
Net rental yield, % ((2) 6.7 6.4 6.2 -
Net rental yield, like-for-like properties, % 8.1 8.2 7.4 -
1) Due to the adoption of amended IAS 40 Investment property -standard, the fair
value of investment properties also includes development properties.
2) Includes the lots for development projects.
Turnover and Profit
Turnover for the financial year came to EUR 186.3 million (EUR 178.3 million),
derived principally from the rental income generated by Citycon's retail
premises. Gross rental income accounted for 95.5 per cent (97.0 %) of turnover.
Operating profit came to EUR 10.3 million (EUR -105.0 million). Profit before
taxes was EUR -37.5 million (EUR -162.3 million) and profit after taxes
attributable to the parent company's shareholders was EUR -34.3 million (EUR
-124.1 million). The increase in operating profit was mainly due to fair value
changes of the property portfolio. The operating profit rose also due to the
completion of (re)development projects, thanks to net rental income generated by
new and refurbished premises. Credit losses remained modest at EUR 0.6 million.
Temporary rental rebates amounted to EUR 1.6 million in 2009.
The effect of changes in the fair value of the property portfolio, of gains on
sale and other indirect items on the profit attributable to the parent company's
shareholders was EUR -85.2 million (EUR -167.9 million), tax effects included.
Taking this into account, the direct result after taxes was EUR 7.1 million
above the reference period level (Cf. Note "Reconciliation between direct and
indirect result"). The growth in the direct result is mainly attributed to the
increased net rental income and lower financing expenses due to lower interest
rates and changes in exchange rates. In addition, a gain of EUR 0.4 million,
including tax effects, from the buybacks of convertible bonds was recognised
under the direct result.
Current taxes on the direct result were higher for the financial year than
during the reference period, due to growth in the direct result and the buybacks
of convertible bonds.
Earnings per share were EUR -0.16 (EUR -0.56). Direct result per share, diluted,
(diluted EPRA EPS) was EUR 0.23 (EUR 0.20). Net cash flow from operating
activities per share was EUR 0.30 (EUR 0.21).
Human Resources and Administrative Expenses
At the end of the period, Citycon Group employed a total of 119 (113) persons,
of whom 78 worked in Finland, 33 in Sweden and eight in the Baltic countries.
Administrative expenses increased to EUR 17.8 million (EUR 16.9 million),
including EUR 0.4 million (EUR 0.3 million) of expenses related to employee
stock options and the company's share-based incentive scheme.
Investments and Divestments
Citycon's reported gross capital expenditure during the year totalled EUR 134.6
million (EUR 157.8 million). Of this, property acquisitions accounted for EUR
0.0 million (EUR 17.4 million), property development for EUR 134.0 million (EUR
139.6 million) and other investments for EUR 0.6 million (EUR 0.8 million). The
investments were financed through cash flow from operations and existing
financing arrangements.
In July, Citycon agreed on the sale of the 181 apartments within the Åkersberga
Centrum, Sweden, for approximately SEK 181 million (approximately EUR 16.7
million). In June, Citycon agreed to sell the apartments under construction
within the Liljeholmstorget shopping centre in Stockholm, Sweden, for
approximately SEK 176 million (approximately EUR 16.3 million). At the end of
January, Citycon divested all shares in its subsidiary MREC Kiinteistö Oy
Keijutie 15. The debt-free sales price of this non-core property in Lahti
amounted to approximately EUR 3 million.
Statement of Financial Position and Financing
The total assets at the end of the financial year stood at EUR 2,253.2 million
(EUR 2,178.5 million). Liabilities totalled EUR 1,485.3 million
(EUR 1,341.2 million), with short-term liabilities accounting for EUR
227.4 million (EUR 109.5 million). The Group's financial position remained good.
At the end of the period under review, Citycon's liquidity was EUR 205.6
million, of which EUR 185.8 million consisted of undrawn, committed credit
facilities and EUR 19.8 million of cash and cash equivalents. At the end of the
accounting period, Citycon's liquidity, excluding short-term credit limits and
commercial papers, stood at EUR 172.9 million (31 December 2008: EUR 158.7
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. During the second half
of 2009, the domestic commercial papers market had picked up and by the end of
the accounting period under review, Citycon had issued commercial papers to the
value of EUR 32.6 million. Citycon's financing is mainly arranged on a long-term
basis, with short-term interest-bearing debt constituting approximately
11 per cent of the Group's total interest-bearing debt at the end of the report
period.
Year-on-year, reported interest-bearing debt increased by EUR 122.1 million, to
EUR 1,321.7 million (EUR 1,199.5 million) in 2009. The fair value of the Group's
interest-bearing debt was EUR 1,332.0 million (EUR 1,211.3 million).
The Group's cash and cash equivalents totalled EUR 19.8 million (EUR 16.7
million). The fair value of the Group's interest-bearing net debt stood at
EUR 1,312.2 million (EUR 1,194.6 million).
The year-to-date weighted average interest rate decreased compared to the
previous year and was 4.16 per cent (4.85 % during reference period). The
average loan maturity, weighted according to the principal amount of the loans,
stood at 3.6 years (4.6 years). The average interest-rate fixing period was
3.2 years (3.3 years).
Citycon's interest cover ratio covenant improved slightly due to lower interest
costs and the improved direct result coming to 2.3 (Q3/2009: 2.2). Citycon's
equity ratio covenant as defined in the loan agreements fell to 40.6 per cent
(Q3/2009 42.4 %) due to investments financed with debt and the fair value loss
of the property portfolio.
The weighted interest rate, interest-rate swaps included, averaged
3.87 per cent on 31 December 2009.
At the end of the reporting period, the Group's equity ratio was 34.2 per cent
(38.5 %). Gearing stood at 169.5 per cent (141.3 %).
Citycon's period-end interest-bearing debt included 75.1 per cent (75.8 per
cent) of floating-rate loans, of which 73.7 per cent (66.4 %) had been converted
to fixed-rate ones by means of interest-rate swaps. Fixed-rate debt accounted
for 80.2 per cent (74.5 %) of the company's year-end interest-bearing debt,
interest-rate swaps included. The debt portfolio's hedging ratio is in line with
the Group's financing policy. In 2009, Citycon utilized the prevailing low
interest rates by making new interest-rate swaps and by extending maturing
contracts, thereby increasing the debt portfolio's 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 year-end nominal amount of interest-rate swaps
totalled EUR 737.6 million (EUR 591.7 million), with hedge accounting applied to
interest-rate swaps whose nominal amount totalled EUR 713.2 million (EUR 568.7
million).
On 31 December 2009, the nominal amount of all of the Group's derivative
contracts totalled EUR 759.7 million (EUR 614.8 million), and their fair value
was EUR -29.2 million (EUR -9.8 million). The decline of market interest rates
during 2009 decreased the fair value of Citycon's interest rate derivatives.
Hedge accounting is applied for 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 the earnings per share, but the total
comprehensive income. During the reporting period, the fair value loss
recognised under other comprehensive income, taking account of the tax effect,
totalled EUR -5.0 million (EUR -22.6 million).
Net financial expenses totalled EUR 47.7 million (EUR 57.3 million). This
decrease was mainly attributable to lower interest rates and the buybacks of
convertible bonds.
Net financial expenses in the statement of comprehensive income include EUR 0.6
million of non-recurring income for the buyback of the convertible bonds. In
addition, net financial expenses in the statement of comprehensive income
include EUR 1.4 million (EUR 1.8 million) in non-cash expenses related to the
option component on convertible bonds.
Loan Market Transactions
Syndicated Loan
In March, Citycon signed an agreement for a EUR 75 million unsecured revolving
credit facility with a group of three Nordic banks. The agreement is valid for
three years.
The new syndicated loan will further strengthen the company's available
liquidity and provide the means of financing Citycon's growth on a committed
basis. The proceeds from the credit facility will be used to finance strategic
investments such as shopping centre redevelopment projects. The credit margins
of the loan are subject to a pricing grid based on Citycon's interest cover
ratio covenant, as has been the case with the company's previous loan
agreements.
Subordinated Convertible Bonds 2006
In July 2006, Citycon's Board of Directors decided to issue subordinated capital
convertible bonds to the amount of EUR 110 million, directed at international
institutional investors and consisting of 2,200 bonds, each with a face value of
EUR 50,000. The issue of the convertible bonds waiving the shareholders'
pre-emptive subscription rights was based on the authorisation given at
Citycon's Annual General Meeting on 14 March 2006. These convertible bonds have
been listed on the NASDAQ OMX Helsinki since 22 August 2006. The maturity of the
bonds is 7 years and they will pay a coupon of 4.5 per cent annually in arrears.
Furthermore, the conversion period is from 12 September 2006 to 27 July 2013,
and the maturity date is 2 August 2013. The current conversion price is
EUR 4.20.
In the autumn of 2008, Citycon began the buybacks of the convertible bonds as
the market situation enabled the repurchases at a price clearly below the face
value of the bonds, and as the repurchases enabled the company to strengthen its
statement of financial position and cut its net financial expenses.
Citycon continued to repurchase the convertible bonds during the period under
review, during which time the company repurchased a total of 128 bonds for EUR
3.6 million (including interest accrued). The repurchased bonds have been
cancelled. The total number of bonds after the cancellations is 1,530, and they
entitle to subscribe for a maximum of 18,214,285 shares and allow a maximum
increase of EUR 24,589,284.75 in Citycon's share capital.
By the end of the accounting period under review, Citycon had repurchased a
total principal amount of EUR 33.5 million of the 2006 convertible bonds,
corresponding to approximately 30.5 per cent of the aggregate amount of the
convertible bonds. The weighted average repurchase price was 53.5 per cent of
the face value of the bonds.
Bond 2009
On 30 November 2009, the Board of Directors of Citycon decided to issue an
unsecured domestic bond and offer it for subscription for domestic retail
investors. The total nominal amount of the unsecured bond issued is EUR 40
million. Unless the loan is prior to that redeemed or repurchased on the
secondary market, the loan period is 17 December 2009-17 December 2014. The bond
will pay a coupon of 5.1 per cent annually on 17 December until 17 December
2014. This bond is listed on the NASDAQ OMX Helsinki exchange.
The proceeds from the issue of the bond will be used to finance redevelopment
and extension projects and to finance potential acquisitions in line with
Citycon's investment strategy.
Short-term Risks and Uncertainties
For risk management purposes, Citycon has a holistic Enterprise Risk Management
(ERM) programme in place. The purpose of risk management is to ensure that the
company meets its business targets. The ERM's purpose is to generate updated and
consistent information for the company's senior executives and Board of
Directors on any risks threatening the targets set in the strategic and annual
plans.
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 execution of redevelopment projects.
Economic fluctuations and trends have a significant influence on demand for
leasable premises as well as rental levels. These constitute one of the key
near-term risks for the company. 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 an economic development might reduce
demand for retail premises, weaken the lessees' ability to pay rent, increase
vacancy rate 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 has not recovered to pre-crisis levels. Moreover, the margins of
long-term unsecured bank loans, in particular, have remained high in spite of
the financial markets' improved situation during the second half of 2009. If
stricter regulations for banks are realised in the future, it may maintain such
abnormally high costs for financing provided by banks. Citycon's financial
position is good. At the end of 2009, the company's available liquidity totalled
EUR 205.6 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, demand among property investors and the
expected rate of inflation. 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 financial years 2008 and 2009.
Trading activity in the property market remained at historically low levels
during 2009. While changes in properties' fair value have an effect on the
company's profit for the financial year, 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 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 for new projects
to be viable, they require attaining a sufficient rate of pre-leasing with
sufficient rental levels.
More details on Citycon's risk management are available on the corporate website
at www.citycon.com/riskmanagement and on pages 32-34 of the Financial Statements
2009.
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, make them
well positioned to face the demands of sustainable development.
Citycon has initiated a Green Shopping Centre Management programme to foster
sustainable development in all Citycon shopping centres. The programme was
implemented in 2009, and it aims to promote energy efficiency, recycling and
other operations that promote sustainable development.
At the end of June, the Trio shopping centre was awarded the first LEED®
(Leadership in Energy and Environmental Design) environmental certificate in the
Nordic countries. Trio, located in Lahti, Finland, is one of Citycon's three
pilot projects of sustainable construction. The other LEED projects include the
redevelopment and extension of the Rocca al Mare shopping centre in Tallinn, and
the construction of the Liljeholmstorget shopping centre in Stockholm. Citycon
has sought LEED certification also for these projects. Certification forms an
essential element of Citycon's efforts toward sustainable development.
Citycon defined its long-term environmental responsibility goals in connection
with its strategic planning in summer 2009. For the first time, in its Annual
Report 2009 Citycon is including 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 used to
specify site-specific action plans to help promote the company's environmental
performance goals.
Annual General Meeting 2009
Citycon Oyj's Annual General Meeting (AGM) took place in March in Helsinki,
Finland. The AGM adopted the company's financial statements for the accounting
year 2009 and discharged the members of the Board of Directors and the Chief
Executive Officer from liability. The AGM decided on a dividend of EUR 0.04 per
share for the financial year 2009 and, in addition, on an equity return of
EUR 0.10 per share from the invested unrestricted equity fund. The dividend and
equity return were paid on 3 April 2009.
Board of Directors
The number of Board members was increased from eight to nine, with Amir
Bernstein, Gideon Bolotowsky, Raimo Korpinen, Tuomo Lähdesmäki, Claes Ottosson,
Dor J. Segal, Thomas W. Wernink and Per-Håkan Westin being re-elected to the
Board for a one-year-term. Israeli citizen Ariella Zochovitzky, B.A., MBA and
CPA, born in 1957, was elected as a new member of the Board.
On 1 December 2009, Citycon's Extraordinary General Meeting elected Mr. Ronen
Ashkenazi, B.Sc., Civil Engineering, born in 1962, a member of the Board of
Directors to replace Mr. Amir Bernstein, who had resigned on 30 November 2009
for the remainder of the term ending on 11 March 2010. A citizen of Israel, Mr.
Ronen Ashkenazi has been professionally active in real estate business for 25
years. Mr. Ashkenazi is CEO and minority shareholder of Gazit Globe Israel
(Development) Ltd., subsidiary of Citycon's largest shareholder Gazit Globe Ltd.
Gazit Globe Israel (Development) Ltd. is a company mainly focused on shopping
centre development.
Auditor
Ernst & Young Oy, a firm of authorised public accountants, was re-elected by the
Annual General Meeting to act as the company's auditor during the accounting
period 2009, with Authorised Public Accountant Tuija Korpelainen as the chief
auditor.
Other decisions made by the Annual General Meeting have been reported in the
interim report published on 23 April 2009.
Shareholders, Share Capital and Shares
Citycon shares have been listed on the Helsinki exchange since 1988. Citycon is
a Mid Cap Company in the Financials sector, sub-industry Real Estate Operating
Companies. Its trading code is CTY1S and its shares are traded in euros. The
ISIN code used in international securities clearing is FI0009002471.
Trading and Share Performance
In 2009, the number of Citycon shares traded on the NASDAQ OMX Helsinki totalled
149.3 million (150.9 million) at a total value of EUR 296.1 million (EUR 443.1
million). The highest quotation during the year was EUR 3.16 (EUR 4.28) and the
lowest EUR 1.30 (EUR 1.26). The reported trade-weighted average price was
EUR 1.99 (EUR 2.94), and the share closed at EUR 2.94 (EUR 1.68). The company's
year-end market capitalisation totalled EUR 649.9 million (EUR 371.3 million).
Shareholders
There was a significant increase in the number of Finnish Citycon shareholders
during the period under review. On 31 December 2009, Citycon had a total of
3,733 (2,190) registered shareholders, of which ten were account managers of
nominee-registered shares. Nominee-registered and other international
shareholders held 198.7 million (210.7 million) shares, or 89.9 per cent (95.3
%) of shares and voting rights in the company.
Notifications of Changes in Shareholdings
Perennial Investment Partners Limited notified the company in March that its
holdings in Citycon Oyj had fallen below the five per cent threshold. According
to the notification, Perennial Investment Partners Limited held a total of
7,770,418 Citycon shares on 12 March 2009, equivalent to 3.52 per cent of the
company's share capital and voting rights.
AXA Investment Managers Paris notified the company of several changes in its
holdings during 2009. According to a notification submitted in December, still
valid at the end of the reporting period, the holdings of AXA S.A. in Citycon
Oyj had fallen below the five per cent threshold. According to the notification,
AXA S.A. and its subsidiaries held a total of 10,070,707 Citycon shares on 10
December 2009, equivalent to 4.56 per cent of the company's share capital and
voting rights.
Share Capital
At the beginning of 2009, the company's registered share capital totalled EUR
259,570,510.20 and the number of shares was 220,998,989. During the period,
there were no changes in the company's share capital but the number of shares
grew by 60,746 shares, which the company issued through directed, free share
issues in May as part of the company's long-term, share-based incentive plan. At
the end of the period, the company's registered share capital totalled EUR
259,570,510.20, and the number of shares amounted to 221,059,735. The company
has a single series of shares, each share entitling to one vote at general
meetings of shareholders. The shares have no nominal value.
Board Authorisations
The AGM for 2007 authorised the Board of Directors to decide on issuing new
shares and disposing of treasury shares through paid or free share issues. New
shares can be issued and treasury shares can be transferred to shareholders in
proportion to their existing shareholding or through a directed share issue
waiving the pre-emptive rights of shareholders, if a weighty financial reason
exists for doing so. The Board can also decide on a free share issue to the
company itself. In addition, the Board was authorised to grant special rights
referred to in Section 1 of Chapter 10 of the Finnish Limited Liability
Companies Act, entitling their holders to receive, against payment, new shares
in the company or treasury shares. The combined number of new shares to be
issued and treasury shares to be transferred, including the shares granted on
the basis of the special rights, may not exceed 100 million. At the end of the
accounting period, the number of shares that can be issued or disposed of on the
basis of the authorisation totalled 72,317,432. This authorisation is valid
until 13 March 2012.
The 2009 AGM authorised the Board of Directors to decide on the acquisition of
20 million of the company's own shares. This acquisition authorisation will be
valid until the next Annual General Meeting. The company had no treasury shares
at the end of the accounting period.
At the end of the accounting period, the Board 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 A expired at the end of
March. A total of 386,448 shares were subscribed with these options. The number
of unexercised stock options 2004 A totalled 694,925. These stock options have
been deleted as worthless from their holders' book-entry accounts.
The table below shows details of the 2004 stock options. The full terms and
conditions of the stock option plan are available on the corporate website at
www.citycon.com/options. No shares were subscribed based on the stock options
2004 during the period under review.
Basic Information on Stock Options 2004 as at 31 December 2009
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) 2.5908 4.2913
Subscription period began 1.9.2007 1.9.2008
Subscription period ends 31.3.2010 31.3.2011
No. of options exercised - -
No. of shares subscribed with options - -
No. of options available for share subscription 1,090,000 1,050,000
No. of shares that can be subscribed 1,321,843 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 2009. The share
subscription prices are reduced by half of the per-share dividends paid and
per-share equity returned. However, the share subscription price is always at
least EUR 1.35.
Events after the Financial Year
Initiated development projects
In the beginning of January, the company announced the start of two planned
development projects.
A new shopping centre will be built in Myllypuro in 2010-2012 to replace the
current retail centre, and 255 new privately financed rental and
right-of-occupancy flats will be built adjacent to it, as well as an underground
parking hall for 270 cars. The total value of the project is over EUR 60
million, of which EUR 20 million will pay for the shopping centre and parking
hall to be owned by Citycon. At the beginning of 2009, Citycon sold all
apartments to be built within the shopping centre, as well as the three
companies incorporated by it to manage their ownership. Residential investors
are responsible for the building development and the leasing of their own
apartments. The leasable area of the new shopping centre will be about 7,300
square metres. Currently, over 60 per cent of the premises have been leased.
Citycon's shopping centre Espoontori in Espoo will be thoroughly redeveloped in
2010. The entire shopping centre of 10,400 square metres and the adjacent
parking hall will be renovated and modernised to fit the requirements of today's
clientele. Citycon's investment in this project will total EUR 18 million.
In February, the company announced that shopping centre Forum in Jyväskylä,
Finland, will be redeveloped completely. The company's investment in this
project will total EUR 16 million.
Citycon's total investment in these three projects amounts to approximately EUR
54 million.
Subscription of shares with option rights
A total of 356,558 new Citycon shares were subscribed for at a per-share
subscription price of EUR 2.5908 exercising stock options B under the company's
2004 stock option scheme at the start of the year. The share subscription price
of EUR 923,770.47 was recognised under the invested unrestricted equity fund.
The new shares are expected to be registered in the Trade Register on 15
February 2010. Following the registration, the number of registered Citycon
shares will amount to 221,416,293 shares. The unexercised 2004 B stock options
entitle their holders to subscribe for additional 965,285 new shares.
Board Proposal for Dividend Distribution and Distribution of Assets from the
Invested Unrestricted Equity Fund
The parent company's retained earnings amount to EUR 27.5 million, of which
profit for the period is EUR 18.5 million. On 31 December 2009, the funds in the
parent company's invested unrestricted equity fund amounted to a total of EUR
157.0 million.
The Board of Directors proposes to the Annual General Meeting of 11 March 2010
that a per-share dividend of EUR 0.04 be paid out for the financial year ending
on 31 December 2009, and that EUR 0.10 per share be returned from the invested
unrestricted equity fund. The Board of Directors proposes that the record date
for dividend payment and equity return be 16 March 2010 and that the dividend
and equity return be paid on 7 April 2010.
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.
The grocery sales sector, which accounts for a substantial share of the
company's lease portfolio, cushions the impact of rental cyclicality in the
company's business. The company expects only moderate changes in net rental
income, direct operating profit and direct result in 2010, since new
(re)development projects will not be fully operational until towards the end of
2010.
Amsterdam, 9 February 2010
Citycon Oyj
Board of Directors
Condensed Consolidated Financial Statements
1 January - 31 December 2009
Condensed Consolidated Statement of Comprehensive Income, IFRS
Q4/ Q4/
EUR million 2009 2008 Change-% 2009 2008 Change-%
Gross rental income 45.2 43.7 3.5% 177.8 173.0 2.8%
Service charge income 3.7 1.5 150.9% 8.5 5.3 58.7%
Turnover (Note 3) 48.9 45.2 8.2% 186.3 178.3 4.5%
Property operating expenses 17.0 14.9 13.8% 60.2 56.3 6.8%
Other expenses from leasing
operations 0.3 0.1 206.7% 0.7 0.2 233.1%
Net rental income 31.6 30.2 4.8% 125.4 121.8 3.0%
Administrative expenses 5.4 4.7 15.6% 17.8 16.9 5.2%
Other operating income and expenses 0.0 6.0 -99.7% 0.0 6.1 -100.3%
Net fair value losses/gains on
investment property -38.6 -59.3 -34.9% -97.4 -216.1 -54.9%
Net gains/losses on sale of
investment property - 0.0 - 0.1 0.1 -46.5%
Operating loss/ profit -12.4 -27.9 -55.5% 10.3 -105.0 -
Net financial income and expenses 12.0 13.0 -8.3% 47.7 57.3 -16.7%
Loss/profit before taxes -24.4 -40.9 -40.4% -37.5 -162.3 -76.9%
Current taxes -1.2 -2.2 -45.7% -6.5 -6.6 -1.9%
Change in deferred taxes 1.3 7.6 -83.2% 7.0 30.0 -76.5%
Loss/profit for the period -24.3 -35.5 -31.6% -36.9 -138.9 -73.5%
Other comprehensive income/expenses
Net gains/losses on cash flow
hedges 1.0 -44.3 - -6.7 -30.5 -77.9%
Income taxes relating to cash flow
hedges -0.3 11.5 - 1.8 7.9 -77.9%
Exchange losses/ gains on
translating foreign operations -0.1 -12.8 -99.4% 2.0 -13.0 -
Other comprehensive income/expenses
for the period, net of tax 0.7 -45.5 - -3.0 -35.6 -91.6%
Total comprehensive loss/profit for
the period -23.6 -81.0 -70.9% -39.9 -174.5 -77.2%
Loss/profit attributable to
Parent company shareholders -23.8 -30.7 -22.5% -34.3 -124.1 -72.4%
Minority interest -0.5 -4.8 -90.1% -2.6 -14.8 -82.5%
Total comprehensive loss/profit
attributable to
Parent company shareholders -24.2 -73.2 -66.9% -38.4 -156.8 -75.5%
Minority interest 0.7 -7.8 - -1.4 -17.8 -91.9%
Earnings per share (basic), EUR
(Note 5) -0.11 -0.14 -22.5% -0.16 -0.56 -72.4%
Earnings per share (diluted), EUR
(Note 5) -0.11 -0.14 -22.5% -0.16 -0.56 -72.4%
Direct result (Note 4) 12.5 11.8 6.0% 50.9 43.8 16.3%
Indirect result (Note 4) -36.3 -42.5 -14.5% -85.2 -167.9 -49.3%
Loss/profit for the period
attributable to parent company
shareholders -23.8 -30.7 -22.5% -34.3 -124.1 -72.4%
Condensed Consolidated Statement of Financial Position, IFRS
EUR million Note 31 Dec. 2009 31 Dec. 2008
Assets
Non-current assets
Investment properties 6 2,147.4 2,111.6
Intangible assets and property, plant and
equipment 1.6 1.7
Deferred tax assets 8.6 6.8
Derivative financial instruments and other
non-current assets 9 3.8 6.0
Total non-current assets 2,161.4 2,126.1
Current assets
Investment properties held for sale 7 26.0 -
Derivative financial instruments 9 - 13.9
Trade and other receivables 46.1 21.7
Cash and cash equivalents 8 19.8 16.7
Total current assets 91.8 52.4
Total assets 2,253.2 2,178.5
Liabilities and Shareholders' Equity
Equity attributable to parent company
shareholders
Share capital 259.6 259.6
Share premium fund 131.1 131.1
Fair value reserve 9 -22.7 -17.7
Invested unrestricted equity fund 10 155.2 177.3
Retained earnings 10 207.8 248.8
Total equity attributable to parent company
shareholders 731.1 799.1
Minority interest 36.8 38.2
Total shareholders' equity 767.9 837.3
Liabilities
Long-term interest-bearing debt 11 1,175.4 1,149.2
Derivative financial instruments and other
non-interest bearing liabilities 9 32.5 25.5
Deferred tax liabilities 50.0 57.1
Total long-term liabilities 1,257.9 1,231.7
Short-term interest-bearing debt 11 146.3 50.3
Derivate financial instruments 9 1.5 4.9
Trade and other payables 79.7 54.3
Total short-term liabilities 227.4 109.5
Total liabilities 1,485.3 1,341.2
Total liabilities and shareholders' equity 2,253.2 2,178.5
Condensed Consolidated Cash Flow Statement, IFRS
EUR million Note 2009 2008
Cash flow from operating activities
Loss/profit before taxes -37.5 -162.3
Adjustments 145.7 268.1
Cash flow before change in working capital 108.3 105.8
Change in working capital 10.7 -2.1
Cash generated from operations 119.0 103.7
Paid interest and other financial charges -54.4 -63.1
Interest income and other financial income received 0.3 1.2
Realized exchange rate gains and losses 11.8 5.1
Taxes paid/received -10.4 0.2
Net cash from operating activities 66.2 47.2
Cash flow from investing activities
Acquisition of subsidiaries, less cash acquired 6 - -24.0
Acquisition of investment properties 6 - -
Capital expenditure on investment properties as well as on
intangible assets and PP&E 6 -130.9 -127.0
Sale of investment properties 6 3.1 7.0
Net cash used in investing activities -127.9 -144.1
Cash flow from financing activities
Equity contribution from minority shareholder - 25.9
Proceeds from short-term loans 11 149.7 72.1
Repayments of short-term loans 11 -77.1 -125.8
Proceeds from long-term loans 11 295.1 623.3
Repayments of long-term loans 11 -273.0 -473.6
Dividends paid 10 -30.9 -30.9
Net cash from financing activities 63.8 90.9
Net change in cash and cash equivalents 2.1 -6.1
Cash and cash equivalents at period-start 8 16.7 24.2
Effects of exchange rate changes 1.0 -1.4
Cash and cash equivalents at period-end 8 19.8 16.7
Condensed Consolidated Statement of Changes in Shareholders' Equity, IFRS
EUR million
Equity attributable to parent company shareholders
Invested
Share Fair unrestricted Trans-
Share premium value equity lation Retained
capital fund reserve fund reserve earnings
Balance at 1 Jan. 2008 259.6 131.1 4.9 199.3 -0.3 387.3
Total comprehensive
loss/profit for the
period -22.6 -10.0 -124.1
Share subscriptions
based on stock options 0.0
Recognized gain in the
equity arising from
convertible bond
buybacks 4.6
Dividends and return
from the invested
unrestricted equity fund
(Note 9) -22.1 -8.8
Share-based payments 0.3
Acquisition of minority
interests
Balance at 31 Dec. 2008 259.6 131.1 -17.7 177.3 -10.3 259.1
Balance at 1 Jan. 2009 259.6 131.1 -17.7 177.3 -10.3 259.1
Total comprehensive
loss/profit for the
period -5.0 0.8 -34.3
Recognized gain in the
equity arising from
convertible bond
buybacks 1.1
Sale of treasury shares 0.0
Dividends and return
from the invested
unrestricted equity fund
(Note 9) -22.1 -8.8
Share-based payments 0.2
Acquisition of minority
interests
Balance at 31 March 2009 259.6 131.1 -22.7 155.2 -9.5 217.3
Equity
attributable to Share-
parent company Minority holders'
shareholders interest equity, total
Balance at 1 Jan. 2008 982.0 28.9 1,010.9
Total comprehensive loss/profit for the
period -156.8 -17.8 -174.5
Share subscriptions based on stock
options 0.0 0.0
Recognized gain in the equity arising
from convertible bond buybacks 4.6 4.6
Dividends and return from the invested
unrestricted equity fund (Note 9) -30.9 -30.9
Share-based payments 0.3 0.3
Acquisition of minority interests - 27.0 27.0
Balance at 31 Dec. 2008 799.1 38.2 837.3
Balance at 1 Jan. 2009 799.1 38.2 837.3
Total comprehensive loss/profit for the
period -38.4 -1.4 -39.9
Recognized gain in the equity arising
from convertible bond buybacks 1.1 1.1
Sale of treasury shares 0.0 0.0
Dividends and return from the invested
unrestricted equity fund (Note 9) -30.9 -30.9
Share-based payments 0.2 0.2
Acquisition of minority interests - 0.0 0.0
Balance at 31 Dec. 2009 731.1 36.8 767.9
NOTES TO THE 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 9
February 2010.
2. Basis of Preparation and Accounting Policies
Citycon has prepared its consolidated financial statements in accordance with
the International Financial Reporting Standards (IFRS) and applied the IFRS/IAS
standards, effective as of 31 December 2009, which refer to the approved
applicable standards and their interpretations under European Union Regulation
No. 1606/2002. More information about the accounting policies can be found from
Citycon's annual financial statements for the year ended 31 December 2009.
The following new standards as well as amendments and interpretations to the
existing standards have been adopted in the financial statements: IFRS 8 (new
standard) Operating Segments, IAS 1 (revised) Presentation of Financial
Statements and IAS 40 (amendment) Investment Property and consequential
amendments to IAS 16 Property, Plant and Equipment. The adoption of IFRS 8
Operating Segments and IAS 1 Presentation of Financial Statements amended the
presentation of financial statements and the adoption of IAS 40 Investment
Property changed the measurement of development properties. The adoption of IFRS
8 Operating Segments did not change the number or the content of the reported
segments. The corporate management follows the segments' direct operating
profit. Therefore, direct operating profit for each segment is presented due to
the adoption of IFRS 8. The adoption of IAS 1 Presentation of Financial
Statements changed the income statement format and the format of statement of
changes in the shareholders' equity. Due to the adoption of IAS 40 Investment
Property, Citycon measures its development properties in fair value instead of
at cost. Since the development properties are now measured at fair value just
like the operative investment properties, Citycon no longer presents development
properties separately from investment properties on the statement of financial
position. In the Notes to the Financial Statements, Citycon divides its
investment properties into two groups: operative investment properties and
development/redevelopment properties. The fair value gains of the development
properties amounted to EUR 11.4 million during the Q1/2009. 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 the notes to the consolidated financial statements, note 3
"Changes in IFRS and accounting policies" under the Notes to the Consolidated
Financial Statements (see pages 18-19 in the Financial Statements).
3. Segment Information
Citycon's business consists of the regional business units Finland, Sweden and
the Baltic Countries.
Q4/ Q4/
EUR million 2009 2008 Change-% 2009 2008 Change-%
Turnover
Finland 32.7 32.0 2.5% 131.3 126.8 3.5%
Sweden 12.4 10.1 22.6% 41.0 41.9 -2.0%
Baltic Countries 3.8 3.1 21.0% 14.0 9.6 45.5%
Total 48.9 45.2 8.2% 186.3 178.3 4.5%
Net rental income
Finland 23.0 22.6 1.7% 92.4 90.9 1.7%
Sweden 6.1 5.3 13.9% 23.2 24.1 -3.5%
Baltic Countries 2.5 2.2 14.7% 9.8 6.8 44.6%
Other 0.0 0.0 - 0.0 0.0 -
Total 31.6 30.2 4.8% 125.4 121.8 3.0%
Direct operating profit/loss
Finland 21.4 21.0 1.5% 86.3 85.4 1.0%
Sweden 5.1 4.5 14.1% 20.0 21.0 -4.6%
Baltic Countries 2.2 2.0 9.1% 8.8 6.2 42.8%
Other -2.3 -1.9 21.3% -7.4 -7.2 2.6%
Total 26.3 25.6 2.8% 107.7 105.3 2.3%
Operating profit/loss
Finland 6.8 -21.7 -131.2% 21.2 -62.9 -
Sweden -12.0 -16.9 -29.1% 0.3 -49.1 -
Baltic Countries -4.9 12.6 - -3.8 14.4 -
Other -2.3 -2.0 17.8% -7.4 -7.4 -0.5%
Total -12.4 -27.9 -55.5% 10.3 -105.0 -
EUR million
Assets 31 Dec. 2009 31 Dec. 2008 Change-%
Finland 1,455.5 1,504.2 -3.2%
Sweden 605.7 466.9 29.7%
Baltic Countries 157.6 156.3 0.8%
Other 34.3 51.1 -32.8%
Total 2,253.2 2,178.5 3.4%
The change in segment assets was due to the fair value losses in investment
properties, weakened Swedish krona and capital expenditure.
4. Reconciliation between Direct and Indirect Result
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.
Q4/ Q4/
EUR million 2009 2008 Change- % 2009 2008 Change- %
Direct result
Net rental income 31.6 30.2 4.8% 125.4 121.8 3.0%
Direct administrative expenses -5.3 -4.6 14.4% -17.7 -16.5 7.0%
Direct other operating income and
expenses 0.0 0.1 -77.7% 0.0 0.1 -115.0%
Direct operating profit 26.3 25.6 2.8% 107.7 105.3 2.3%
Direct net financial income and
expenses -11.9 -11.7 1.8 % -47.7 -54.2 -12.1%
Direct current taxes -1.2 -1.4 -16.5% -6.2 -4.8 29.6%
Direct change in deferred taxes -0.1 0.0 -337.7% -0.2 0.2 -203.5%
Direct minority interest -0.6 -0.7 -16.2% -2.8 -2.8 -1.8%
Total direct result 12.5 11.8 6.0% 50.9 43.8 16.3%
Direct result per share
(diluted), (diluted EPRA EPS),
EUR( 1)) 0.06 0.05 6.2% 0.23 0.20 15.2%
Indirect result
Net fair value losses/gains on
investment property -38.6 -59.3 -34.9% -97.4 -216.1 -54.9%
Profit/loss on disposal of
investment property 0.0 0.0 -100.0% 0.1 0.1 -46.5%
Indirect administrative expenses -0.1 -0.1 116.8% -0.1 -0.4 -69.0%
Indirect other operating income
and expenses 0.0 5.9 -100.0% 0.0 6.0 -100.0%
Movement in fair value of
financial instruments -0.1 -1.4 -95.4% -0.1 -3.1 -97.9%
Indirect current taxes 0.0 -0.8 -100.0% -0.3 -1.8 -84.0%
Change in indirect deferred taxes 1.4 7.5 -81.7% 7.3 29.7 -75.6%
Indirect minority interest 1.1 5.6 -80.2% 5.3 17.6 -69.6%
Total indirect result -36.3 -42.5 -14.5% -85.2 -167.9 -49.3%
Indirect result per share,
diluted -0.16 -0.19 -14.5% -0.39 -0.76 -49.4%
Loss/profit for the period
attributable to parent company
shareholders -23.8 -30.7 -22.5% -34.3 -124.1 -72.4%
¹) The calculation of the direct result per share is presented in the Note 5
"Earnings per share".
5. Earnings per Share
2009 2008
A) Earnings per share calculated from the profit/loss for the period
Earnings per share, basic
Loss/profit attributable to parent company shareholders, EUR
million -34.3 -124.1
Issue-adjusted average number of shares, Million 221.0 221.0
Earnings per share (basic), EUR -0.16 -0.56
Earnings per share, diluted
Loss/profit attributable to parent company shareholders, EUR
million -34.3 -124.1
Expenses from convertible capital loan, the tax effect deducted,
EUR million - -
Loss/profit used in the calculation of diluted earnings per
share, EUR million -34.3 -124.1
Issue-adjusted average number of shares, Million 221.0 221.0
Convertible capital loan impact, Million - -
Adjustment for stock options, Million - -
Adjustments for long-term share-based incentive plan - -
Issue-adjusted average number of shares used in the calculation
of diluted earnings per share, Million 221.0 221.0
Earnings per share (diluted), EUR -0.16 -0.56
The incremental shares from assumed conversions or any income or cost related to
dilutive potential shares are not included in calculating 2009 and 2008 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 4) 50.9 43.8
Expenses arising from convertible capital loan, adjusted with the
tax effect deduction, EUR million 4.2 5.6
Profit used in the calculation of direct result per share, EUR
million 55.1 49.4
Issue-adjusted average number of shares, Million 221.0 221.0
Convertible capital loan impact, Million 18.5 25.4
Adjustment for stock options, Million - 0.8
Adjustments for long-term share-based incentive plan 0.0 -
Issue-adjusted average number of shares used in the calculation of
diluted earnings per share, Million 239.5 247.2
Direct result per share (diluted), (diluted EPRA EPS), EUR 0.23 0.20
6. Investment Property
Citycon divides its investment properties into two categories: investment
properties under construction (IPUC) and operative investment properties. Due to
the adoption of amended IAS 40 Investment property -standard, Citycon presents
the development properties under the investment properties. Therefore,
previously presented properties under redevelopment -category is extended to
include also development properties and is called investment properties under
construction (IPUC).
At the period end Investment properties under construction -category included
the following shopping centres: Liljeholmstorget, Åkersberga Centrum and Lahden
Hansa. At 31 December 2008 this category included Liljeholmstorget and Rocca al
Mare as well as extension projects in Åkersberga Centrum and Lippulaiva.
EUR million 31 Dec. 2009
Investment
properties
under Operative Investment
construction investment properties
(IPUC) properties total
At period-start 271.8 1,839.9 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
EUR million 31 Dec. 2008
Investment
properties
under Operative Investment
construction investment properties
(IPUC) properties total
At period-start 544.5 1,704.4 2,248.9
Acquisitions 6.8 10.6 17.4
Investments 120.9 12.0 132.9
Disposals 0.0 -7.6 -7.6
Capitalized interest 6.8 0.0 6.8
Fair value gains on investment property 4.8 10.5 15.3
Fair value losses on investment property -44.5 -186.9 -231.4
Exchange differences -28.8 -41.6 -70.4
Transfers between items -338.7 338.5 -0.2
At period-end 271.8 1,839.9 2,111.6
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:
Yield requirement (%) Market rents (€/m²)
2009 2008 2009 2008
Finland 6.6 6.4 22.5 21.9
Sweden (1)) 6.4 6.4 21.3 12.3
Baltic Countries 8.1 7.4 21.4 20.2
Average 6.6 6.4 22.1 19.9
1) Figures for Sweden on 31 December 2009 include the development projects of
the Liljeholmstorget and Åkersberga Centrum shopping centres.
7. Investment properties held for sale
Investment properties held for sale comprises buildings rights acquired for the
Myllypuro development project, which were sold to three different residential
investors through share transactions that took place on 12 January 2010. In
addition, investment properties held for sale include 181 residential units in
Åkersberga Centrum, which were agreed in July 2009 to be sold to Tegeltornet AB.
2009 2008
At period-start - -
Investments 8.3 -
Transfers from investment properties 17.7 -
At period-end 26.0 -
8. Cash and Cash Equivalents
EUR million 2009 2008
Cash in hand and at bank 13.5 16.7
Short-term deposits 6.4 -
Total 19.8 16.7
9. Derivative Financial Instruments
EUR million 2009 2008
Nominal amount Fair value Nominal amount Fair value
Interest rate derivatives
Interest rate swaps
Maturity:
less than 1 year 48.8 -1.2 86.0 1.4
1-2 years 70.0 1.0 46.0 -1.5
2-3 years 60.0 -3.0 70.0 3.5
3-4 years 262.9 -14.5 41.8 -1.9
4-5 years 198.0 -7.3 228.8 -10.1
over 5 years 97.9 -4.0 119.0 -8.9
Subtotal 737.6 -29.0 591.7 -17.5
Foreign exchange derivatives
Forward agreements
Maturity:
less than 1 year 22.0 -0.2 23.1 7.6
Total 759.7 -29.2 614.8 -9.8
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 3.5 million (EUR 16.2
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 713.2 million (EUR 568.7 million). The fair value loss recognized under
other comprehensive income taking into account the tax effect totals EUR -5.0
million (EUR -22.6 million).
10. Dividends and Return from the Invested Unrestricted Equity Fund
The Board of Directors proposes to the Annual General Meeting of 11 March 2010
that a per-share dividend of EUR 0.04 be paid out for the financial year ending
on 31 December 2009 and that EUR 0.10 per share be returned 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 18 March 2009, dividend for the financial
year 2008 amounted to EUR 0.04 per share (EUR 0.04 for the financial year 2007)
and EUR 0.10 per share was decided to be returned from the invested unrestricted
equity fund (EUR 0.10 for the financial year 2007).
Dividend and equity return of EUR 30.9 million for the financial year 2008 (EUR
30.9 million for the financial year 2007) were paid on 3 April 2009.
11. Interest-bearing Liabilities
During the period, Citycon has agreed on a new revolving credit facility in the
amount of EUR 75 million in order to finance future strategic investments. The
loan bears a floating interest rate and is due within 3 years. During the
period, repayments of other bank loans amounting to EUR 43.9 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.
12. Contingent Liabilities
EUR million 2009 2008
Mortgages on land and buildings 42.9 40.6
Bank guarantees 45.4 45.6
Capital commitments 44.0 13.0
VAT refund liabilities 46.2 21.3
On 31 December 2009, Citycon had capital commitments of EUR 44.0 million (EUR
13.0 million) relating mainly to development and redevelopment projects.
13. Related Party Transactions
There were no significant transactions with the related parties during the
period.
14. Key Figures
Q4/ Q4/
2009 2008 Change-% 2009 2008 Change-%
Earnings per share (basic), EUR -0.11 -0.14 -22.5% -0.16 -0.56 -72.4%
Earnings per share (diluted), EUR -0.11 -0.14 -22.5% -0.16 -0.56 -72.4%
Equity per share, EUR 3.31 3.62 -8.5%
Net asset value (EPRA NAV) per
share, EUR 3.54 3.88 -8.8%
Equity ratio, % 34.2 38.5 -
The formulas for key figures can be found from the 2009 annual financial
statements.
Financial reports in 2010
Citycon will publish its Annual Report 2009 on the corporate website in week
9/2010 at the latest, and in print in week 10/2010 at the latest.
Citycon will issue three interim reports during the financial year 2010 as
follows:
January-March 2010, on Wednesday 21 April 2010, at approximately 9:00 a.m.
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.
Annual General Meeting
Citycon Oyj will hold its Annual General Meeting at Finlandia Hall, Helsinki
Auditorium, Mannerheimintie 13e, Helsinki, Finland, on Thursday 11 March 2010,
starting at 2:00 p.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
[HUG#1382558]