Considerable increase in profit for Hufvudstaden (SE)

Profit for the period after tax amounted to SEK 1,143.6 mln. (approx. €113 mln., last year 664.0 - approx. €66 mln.), equivalent to SEK 5.54 per share (3.22). The gross profit from property management increased by 14.7 per cent to SEK 415.3 mln. (approx. € 41 mln., last year 362.0 - approx. €36 mln.). The improvement in profit can be attributed to reduced vacant space, lower maintenance costs and higher rents.

Net rents from property management during the period amounted to SEK 581.4 mln. (approx. €58 mln. , last year 542.1 - approx. €54 mln.). The turnover-based rent supplement at the NK department stores is reported in the fourth quarter. The turnover-based rent supplement for the previous year was SEK 10.3 mln. (approx. €1 mln.). Apart from this there are no seasonal variations in rents. Net revenue amounted to SEK 30.3 mln. (25.5), expenses amounted to SEK 22.6 mln. (22.9) and gross profit amounted to SEK 7.7 mln. (2.6). Changes in the value of investment properties totalled SEK 1,208.4 mln. (539.5) and in interest derivatives SEK 17.1 mln. (0.0). Net financial income and expense amounted to SEK -54.9 mln. (-65.7). The improved net financial income and expense can be attributed to interest income on the payment received from the sale of the World Trade Center. The Group's tax (current and deferred) for the period totalled SEK -441.6 mln. (-231.8), of which SEK -76.6 mln. was current tax and SEK -365.0 mln. deferred tax. The total investments in properties and equipment during the period was SEK 371.5 mln. (92.2).

Property Portfolio and Net Asset Value
The fair value of the Hufvudstaden property portfolio as of June 30, 2007 was set at SEK 19.0 bln. (approx. €1.9 bln. compared to SEK 17.4 at the turn of the year, approx. €1.7 bln.). The increase can be attributed to unrealized changes in value, the acquisition of Rännilen 15 and investments in the property portfolio. The rentable floor space was 354,141 m² (350,895 at the turn of the year). The total floor space vacancy level as of June 30 was 6.4 per cent (8.1 at the turn of the year) and the total rental vacancy level was 4.9 per cent (6.5 at the turn of the year). Based on the valuation of the property holdings, the net asset value is SEK 13.6 bln. (approx. €1.36 bln.) or SEK 66 per share after tax (when calculating the net asset value, calculated deferred tax has been used).

Rental Market
Interest in high-quality office space in prime locations in sub-markets of central Stockholm increased substantially during the period, mainly as a result of the positive economic growth in Sweden and the Stockholm region. Vacant space for this type of property has fallen and rents have risen. Interest in well-situated retail premises in the same sub-markets remained high. Demand for modern, flexible office premises in the central sub-markets of Gothenburg has increased with a positive growth in rents as a result. However, as in Stockholm, the level The Group's current renegotiations in respect of both retailing and office premises have proceeded in line with our expectations. In total, approximately 27,800 square metres were renegotiated during the period to a value of approximately SEK 109 mln.. On average, these renegotiations have resulted in an increase in rent of approximately 4 per cent.

The full half year report can be found on the website of Hufvudstaden.

Source: Hufvudstaden

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