Sponda Groupâs result in 2004 was better than the previous yearâs due to profits on property sales. The result of leasing operations weakened slightly on the previous year.
Result in brief (comparison period is January-December 2003):
- Sponda derives its revenue from rental income. Total revenue in 2004 was â¬99.2 (100.4) million. The economic occupancy rate decreased by 1.1 % to 87.5 % (88.6 %) at the end of the year. Net operating income was â¬74.5 (76.1) million.
- The operating profit was â¬68.1 (62.7) million. This included a total profit of â¬13.8 million on property sales.
- Earnings per share (EPS) were â¬0.43 (0.39). The Board of Directors proposes a dividend of â¬0.50 (0.30) per share.
- Sponda Groupâs net profit for 2004 was â¬33.8 (30.7) million.
The book value of Spondaâs property portfolio on the balance sheet date was â¬1.095.8 (1.065.1) million and the balance sheet totalled â¬1.117.8 (1.094.0) million. The market value of the property portfolio was â¬1.22 (1.24) billion. Net assets per share before deductions for deferred tax amounted to â¬7.92 (8.35). Net assets per share after deductions for deferred tax amounted to â¬7.54 (7.76). Shareholdersâ equity per share was â¬6.45 (6.33).
Cash flow from leasing operations in 2005 is forecast to remain at the 2004 level. The economic occupancy rate of the properties is expected to reach or slightly exceed 2004 levels. Rent levels are forecast to remain stable.
Forecasts expect the Finnish economy to grow by an annual 3 % between 2004 and 2006. The outlook for employment has improved slightly and in 2004 unemployment was 8.8 %. according to Statistics Finland. Inflation is forecast to rise during 2005 to 1.3 % on average. while the real purchasing power of households is expected to grow by 2.3 % and private consumption by 3.0 %.
Net operating income from Spondaâs properties totalled â¬74.5 (76.1) million, of which 70 % was derived from office premises, 4 % from retail premises and 26 % from logistics properties.
The market value of Spondaâs property portfolio on 31 December 2004 was â¬1.22 (1.24) billion. The comparable change of the market value in the portfolio value was approximately â¬-24.1 million and 1.9 %.
Roughly half of this change was due new accounting principles resulting from the adoption of IFRS, and the rest to changes in rent levels and the occupancy rate.
Sponda owns altogether 87 properties, 45 of which are office buildings and 10 are used for retail purposes. The portfolio also includes 32 logistics properties.
The aggregate leasable area of these properties is 800.000 m2, comprising 394.000 m2 of office space (49 % of total leasable area), 21.000 m2 (3 %) of retail premises, and 385.000 m2 (48 %) of logistics properties.
Maintenance and repairs
Spondaâs investments in maintenance and upgrading of its real estate totalled â¬31.1 (14.2) million in 2004.
Property acquisitions and sales
Sponda bought three office buildings from Elisa Corporation for altogether â¬25.5 million. These buildings, located at Korkeavuorenkatu 35 and 37 and at Kasarmikatu 36, form a complete entity through the block, supporting Spondaâs strategic objectives in the Kaartinkaupunki distict.
In April 2004 Sponda sold the office building at EtelÃ¤esplanadi 22 for â¬33 million to Tapio Mutual Pension Insurance Company. Sponda recorded a profit of â¬11.7 million on this deal.
Sponda also sold other properties totalling â¬3.5 million during the year, entering a total profit on these deals of â¬2.1 million.
Spondaâs most important development projects at the moment are City-Center, Havis Business Center and the Honkatalo building in Hakkila (Vantaa).
Renewal of the City-Center complex continued with work concentrating on the inside of the building. At the tunnel level Arcade I is complete and its new retail stores opened. The office floors are in the process of being renovated with com