The group´s rental income in the first half-year was NOK 353.5 million, as against NOK 341.7 million in the same period of the preceding year. Investments and a rise in rental income from retail premises contributed to the increase, which was dampened to some extent by a fall in rental income from the group´s office properties.
Other operating income came to NOK 54.9 million (NOK 46.3 million), and relates in the main to that part of the operating expenses of the properties which is charged to the lessees (service charges).
Operating profit as at 30 June 2004 amounted to NOK 254.2 million (NOK 235.1 million) after charging ordinary depreciation of NOK 24.7 million (NOK 22.6 million) and other operating costs of NOK 129.5 million (NOK 130.3 million).
Net financial items came to NOK 79.7 million (NOK 104.1 million) in the first half-year. The decrease is due primarily to a lower borrowing rate than in 2003. This entry also includes equity in net income of associated companies totalling NOK 13.3 million (NOK 9.1 million).
Pre-tax profit was NOK 174.5 million (NOK 131.0 million), and after provision for taxes profit for the first half-year was NOK 129.2 million (NOK 96.9 million).
In the second quarter rental income was NOK 178.2 million (second quarter 2003: NOK 169.7 million). Other operating income came to NOK 27.8 million (NOK 26.0 million), and relates primarily to service charges charged to the group´s lessees.
Operating profit in the second quarter amounted to NOK 128.5 million (NOK 116.4 million) after charging ordinary depreciation of NOK 12.7 million (NOK 11.2 million) and other operating costs of NOK 64.9 million (NOK 68.1 million).
Net financial items in the second quarter came to NOK 38.4 million (NOK 50.9 million), and included equity in net income of associated companies totalling NOK 7.5 million (NOK 4.4 million).
Pre-tax profit was NOK 90.1 million (NOK 65.5 million) in the second quarter.
Earnings per outstanding share were NOK 12.23 (NOK 9.17) for the first half-year, and NOK 6.30 (NOK 4.58) for the second quarter.
The group made investments in the first half-year for a total of NOK 127.0 million (NOK 91.7 million).
In first quarter Olav Thon Eiendomsselskap ASA acquired an interest of about 16% in the Sartor Senter shopping mall in the Municipality of Fjell outside Bergen. The company also purchased a 4,000sqm commercial building in the immediate vicinity of the mall. In second quarter another 9% of the Sartor Senter mall has been acquired, so that today Olav Thon Eiendomsselskap owns about 25% of the mall.
In 2003 the Sartor Senter mall was among the 20 largest shopping malls in Norway, and in March this year 31 new shops were added to it. The mall now has a floorspace of about 40,000sqm and contains more than 100 shops.
There were no property sales in the period.
The property portfolio
The annual (theoretical) rental value of the group´s properties as at 1 July 2004 was NOK 715 million.
With a vacancy rate of 3.0%, the occupancy level is still highly satisfactory.
On the basis of rental value, the property portfolio can be broken down into the following segments:
- Shop and restaurant premises 57%
- Office and teaching premises 30%
- Hotels 5%
- Other premises 8%
In the group´s nine shopping malls the total turnover for the first half-year was NOK 3,830 million, an increase of 6.8% on the first six months of 2003. Adjusted for increases in area, the growth in turnover is estimated to be about 4%.
A warehouse of 6,000sqm is under construction in Gardermoen Park. The building is fully let and will be completed in the second quarter of 2005.
The group has several projects in the planning stage. These include an extension of the Storo Storsenter shopping mall and an integration of the Sandvika Storsenter shopping mall and the Info-Rama property.
Finances and liquidity
As at 30 June 2004, the Olav Thon Eiendomsselskap group had a long-term