Sponda´s six-month result improved € 7m. on last year (FI)

Sponda´s six-month net income was € 23.6 million (30 June 2003: € 16.7 million), total revenue (rental income) was € 50.1 (50.0) million, Sponda entered profits on property sales totalling € 13.0 (3.2) million, the operating profit was € 40.5 (31.7) million, earnings per share were € 0.30 (0.21).

Net operating income totalled € 37.7 (38.1) million. The gross margin after depreciation on real estate was € 30.3 (30.9) million. The book value of the Group´s property portfolio was €1.1 billion. Shareholders´ equity per share was €6.32 (31 December 2003: €6.33).

Business conditions
The occupancy rate for office premises throughout the Helsinki metropolitan area continued to weaken. Retail premises were still in short supply and the occupancy rate remained good. The overall availability of logistics properties increased slightly and the vacancy rate in this sector grew.

Leasing activities
Net operating income from Sponda´s properties totalled €37.7 (38.0) million, of which 71 % was derived from offices, 4 % from retail premises, and 25 % from logistics properties.

Geographically, net operating was derived as follows: 51 % from Helsinki Business District, 21 % from Helsinki Metropolitan Area (HMA), 18 % from Logistics Properties in HMA, and 10 % from elsewhere in Finland.

The economic occupancy rate of Sponda´s entire property portfolio at the end of June was 87.6 % (31 March 2004: 88.6 %).

The economic occupancy rate by property use was broken down as follows: offices 86.2 % (31 March 2004: 87.8 %), retail premises 93.0 % (31 March 2004: 93.4 %) and logistics properties 90.5 % (31 March 2004: 90.1 %).

The economic occupancy rates in Sponda´s business areas were: Helsinki Business District 88.9 %, Helsinki Metropolitan Area 82.0 %, Logistics Properties in HMA 88.1 %, and Rest of Finland 93.3 %.

Financing
Financial income and expenses, net, amounted to € -13.0 (-11.4) million. Interest-bearing debt totalled € 564.5 million (31 Dec. 2003: € 582.8 million) and the equity ratio was 46.2 % (31 Dec. 2003: 45.4 %). The average maturity of Sponda´s loans was 2.2 years, the average interest rate was 4.6 % and the average interest-bearing period was 3.0 years.

Interest hedging instruments covering the loan capital were increased during the period by a net total of € 45.0 million, raising the total value of interest rate swap contracts on loans to € 280.9 million at the close of the period.

Property sales
On 30 April 2004 Sponda sold the Kiinteistö Oy Hauki office property (known as the Bensow Building) in the Hauki block at Eteläesplanadi 22 to Tapiola Mutual Pension Insurance Company for € 32.7 million, recording a € 11,1 million profit. Sponda sold other properties during the 1-6/2004 period for altogether € 3.9 million and entered a total profit on these transactions of € 1.9 million.

Property improvements
Sponda´s strategy is to develop properties and the working environments they provide. Sponda focuses on large real estate entities such as City-Center, Havis Business Center and Honkatalo.

City-Center is Sponda´s most important current development site. Negotiations with the City of Helsinki´s planning office and the National Board of Antiquities on the building´s façade are still in progress. The city council is currently expected to decide on the project´s final rezoning plan during the coming autumn. Sponda has reduced its estimated 10 % yield on the City-Center expansion investment as the project´s costs are expected to rise somewhat. This is due partly to the restrictions contained in the proposal submitted by the National Board of Antiquities and partly to the introduction of stricter fire regulations for shopping malls. A more detailed cost estimate will be made once the rezoning plan is finalized.

Renewal of the restaurant and conference centre in the Havis Business Center has progressed as planned and the topping out ceremony r

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