In the first half year of 2004 Citycon Oyj´s profit before extraordinary items and taxes rose to EUR 11.6 million (EUR 9.9 million). The earnings per share increased to EUR 0.08 (EUR 0.07). In the same period Citycon started a process to assess business opportunities in the Scandinavian and Baltic countries.
Property portfolio and business activities
The book value of the property portfolio owned by Citycon was EUR 731.0 million at the end of the period (EUR 644.2 million). Citycon owned 16 shopping centres, which comprised 58.8 per cent of the company’s property portfolio book value, and 130 supermarket and shop properties, which comprised 41.2 per cent of the book value of the company’s property portfolio. At the end of the period, in terms of balance sheet values, 46.7 per cent of the properties were in the Helsinki Metropolitan Area, 35.5 per cent were in other major Finnish cities and 17.7 per cent were in other parts of Finland.
On 26 May 2004, the Board of Directors of Citycon Oyj decided to start a process to assess business opportunities in Scandinavian and the Baltic countries. At the same time, the company will continue the implementation of its strategy of expanding its core business in Finland. Based on the outcome of the assessment process, the Board will later consider amending the geographical scope of its strategy. Citycon will continue, in accordance with its strategy, to focus on retail premises in Finland, mainly in the Helsinki Metropolitan Area and the biggest regional centres.
Portfolio of leases and occupancy rate
During the period, the company signed a total of 182 leases, of which 79 came with the acquisition of Torikeskus in Seinäjoki. At the end of the period, Citycon had a total of 1,465 leases with roughly 860 lessees. The average length of the leases was 3.6 years. The occupancy rate for Citycon’s entire property portfolio was 97.1 per cent (97.1%).
The net rental income of Citycon’s leasing business during the period totalled EUR 30.7 million (EUR 27.1 million). The average net rental yield of the properties owned by the company was 8.5 per cent (8.4%).
Shopping centres accounted for 54.9 per cent of the net rental income (49.6%) and supermarkets and shops accounted for 45.1 per cent (50.4%). Of net income, roughly 47.4 per cent was generated by properties in the Helsinki Metropolitan Area, 34.2 per cent by properties in other major Finnish cities, and roughly 18.4 per cent by other properties in Finland.
Investments and development projects
Citycon’s gross investments amounted to EUR 12.7 million (EUR 0.9 million). Gross investments include the acquisition of a new shopping centre, Torikeskus in Seinäjoki, for EUR 7.1 million, and EUR 5.6 million for business development projects.
During the period, Citycon sold in accordance with its strategy three (3) properties belonging to the Supermarkets and Shops Division. The combined balance sheet value of the properties sold was EUR 0.6 million and the capital gains were EUR 0.1 million EUR.
Turnover and profit
During the period, Citycon’s turnover increased to EUR 44.1 million (EUR 38.7 million). Operating profit increased to EUR 24.5 million (EUR 21.6 million). The increase was largely due to the acquisitions of shopping centres at the end of 2003 and in the first quarter of 2004. Gross rental income accounted for 93,6 per cent (93,4 %) of turnover.
Balance sheet and financing
The Group’s financing situation remained good during the period. The balance sheet total was EUR 834.2 million (EUR 742.7 million), of which cash and cash equivalents were EUR 4.8 million (EUR 12.1 million). At the end of the period, Citycon had a total of EUR 460.9 million (EUR 381.7 million) of liabilities. Net financial expenses rose to EUR 12.9 million (EUR 11.7 million).
Events after the end of the review period
An extraordinary general meeting of the company held on 10 August 2004 decided, in accordance with a proposal from the Board of Directors’