Helsinki, Finland, 2011-02-09 08:00 CET (GLOBE NEWSWIRE) --
Summary of the Last Quarter of 2010 Compared with the Previous Quarter
- Turnover increased to EUR 49.9 million (Q3/2010: EUR 48.0 million).
- Net rental income decreased by 3.7 per cent to EUR 31.8 million (EUR 33.0 million). The reduction was due mainly to higher property operating expenses reflecting common seasonal variations as well as the cold and snowy winter.
- Earnings per share were EUR 0.06 (EUR 0.10).
- Direct result per share (diluted) was EUR 0.06 (EUR 0.06) despite lower direct operating profit due mainly to positive direct income taxes for the quarter.
- The fair value change of investment properties was EUR 11.3 million (EUR 15.8 million), and the fair value of investment properties totalled EUR 2,367.7 million (EUR 2,299.9 million).
- The average net yield requirement for investment properties decreased to 6.4 per cent (6.5%) at the end of the period, according to an external appraiser.
- Net financial expenses decreased to EUR 13.4 million (EUR 14.0 million).
- On the basis of Citycon’s loan agreement covenants, its interest coverage ratio was 2.0x (2.1x) and equity ratio 39.4 per cent (38.9%).
- The one-off cost for executive changes to the company totalled EUR 1.3 million.
- On 21 December 2010, the company lowered its estimate for direct operating profit for 2010, due to changes in the company's management and the exceptionally severe winter.
- The Board of Directors proposes a per-share dividend of EUR 0.04 (EUR 0.04) and a return of equity from invested unrestricted equity fund of EUR 0.10 (EUR 0.10) per share.
Summary of the Year 2010 Compared with the Previous Year
- Turnover grew by 5.2 per cent to EUR 195.9 million (2009: EUR 186.3 million). This increase was due to the growth in gross leasable area and active development of the retail properties. Turnover growth was reduced by a slightly higher vacancy rate during the course of the year, residential divestments in Sweden and the start-up of new (re)development projects. Turnover from like-for-like properties increased by 0.9 per cent excluding the impact of strengthened Swedish krona.
- Profit/loss before taxes was EUR 102.8 million (EUR -37.5 million), including a EUR 50.8 million (EUR -97.4 million) change in the fair value of investment properties.
- Net rental income increased by 1.4 per cent to EUR 127.2 million (EUR 125.4 million). The growth in net rental income was slowed down by higher property operating expenses due to severe winter conditions and prevailing low inflation level. If the impact of the strengthened Swedish krona is excluded, net rental income decreased by 0.7 per cent.
- Net rental income from like-for-like properties decreased by 0.3 per cent excluding the impact of strengthened Swedish krona, due mainly to higher property operating expenses than in the previous year. Additionally, prevailing low inflation resulted in very low indexation-based rental increases.
- The company’s direct result decreased to EUR 47.3 million (EUR 50.9 million).
- Direct result per share (diluted) was EUR 0.21 (EUR 0.23). The decrease in direct operating profit and increased financial expenses were compensated by lower direct income taxes.
- Earnings per share were EUR 0.34 (EUR -0.16). Changes in the fair value of investment properties have a substantial impact on earnings per share.
- The occupancy rate was 95.1 per cent (95.0%).
- Net cash from operating activities per share decreased to EUR 0.09 (EUR 0.30) due to lower direct operating profit, extraordinary items and timing differences.
- The equity ratio rose to 37.1 per cent (34.2%).
- In September, the company issued 22 million new shares in a share issue directed to Finnish and international institutional investors, raising approximately EUR 63 million in new equity.
- The company's financial position improved during the period, due to a share issue and new loan agreements. Total liquidity at the end of the reporting period was EUR 245.0 million, including unutilised committed credit facilities amounting to EUR 225.5 million and EUR 19.5 million in cash.
- The company announced changes in its management. Citycon's CEO Petri Olkinuora will leave his position as of 23 March 2011. Kaisa Vuorio, Vice President, Finnish Operations, left her position on 19 October 2010.
- During the year, the company finalised the sale of apartments located in Åkersberga Centrum, Jakobsbergs Centrum and Liljeholmstorget in Sweden. The selling price amounted to SEK 477 million (approx. EUR 49.5 million).
- At the end of the financial year, the company had three major (re)development projects underway. The estimated total investments in all current projects total approximately EUR 100 million.
Key Figures
Q4/2010 | Q4/2009 | Q3/2010 | 2010 | 2009 | Change- % 1) | |
Turnover, EUR million | 49,9 | 48,9 | 48,0 | 195,9 | 186,3 | 5,2% |
Net rental income, EUR million | 31,8 | 31,6 | 33,0 | 127,2 | 125,4 | 1,4% |
Operating profit, EUR million | 35,4 | -12,4 | 42,8 | 157,7 | 10,3 | -- |
% of turnover | 70,9% | -- | 89,2% | 80,5% | 5,5% | -- |
Profit/loss before taxes, EUR million | 22,0 | -24,4 | 28,8 | 102,8 | -37,5 | -- |
Profit/ loss attributable to parent company shareholders, EUR million | 14,4 | -23,8 | 22,5 | 78,3 | -34,3 | -- |
Direct operating profit, EUR million | 24,3 | 26,3 | 28,0 | 105,0 | 107,7 | -2,5% |
% of turnover | 48,8 % | 53,9 % | 58,4 % | 53,6% | 57,8 % | -7,3% |
Direct result, EUR million | 13,5 | 12,5 | 12,3 | 47,3 | 50,9 | -7,2% |
Indirect result, EUR million | 0,9 | -36,3 | 10,2 | 31,1 | -85,2 | -- |
Earnings per share (basic), EUR | 0,06 | -0,11 | 0,10 | 0,34 | -0,16 | -- |
Earnings per share (diluted), EUR | 0,06 | -0,11 | 0,10 | 0,34 | -0,16 | -- |
Direct result per share (diluted), (diluted EPRA EPS), EUR | 0,06 | 0,06 | 0,06 | 0,21 | 0,23 | -9,2% |
Net cash from operating activities per share, EUR | 0,00 | 0,06 | 0,04 | 0,09 | 0,30 | -71,2% |
Fair value of investment properties, EUR million | 2 299,9 | 2 367,7 | 2 147,4 | 10,3% | ||
Equity per share, EUR | 3,36 | 3,47 | 3,31 | 5,0% | ||
Net asset value (EPRA NAV) per share, EUR 2) | 3,71 | 3,79 | 3,64 | 4,3% | ||
EPRA NNNAV per share, EUR | 3,37 | 3,49 | 3,35 | 4,1% | ||
Equity ratio, % | 35,9 | 37,1 | 34,2 | 8,6% | ||
Gearing, % | 153,4 | 153,1 | 169,5 | -9,7% | ||
Net interest-bearing debt (fair value), EUR million | 1 343,1 | 1 386,0 | 1 312,2 | 5,6% | ||
Net rental yield, % | 5,9 | 5,8 | 6,1 | -- | ||
Net rental yield, like-for-like properties, % | 6,5 | 6,5 | 6,6 | -- | ||
Occupancy rate (economical), % | 94,5 | 95,1 | 95,0 | 0,1% | ||
Personnel (at the end of the period) | 123 | 129 | 119 | 8,4% | ||
Dividend per share, EUR | 0,04 3) | 0,04 | ||||
Return from invested unrestricted equity fund per share, EUR | 0,10 3) | 0,10 | ||||
Dividend and return from invested unrestricted equity fund per share total, EUR | 0,14 3) | 0,14 |
1) Change-% is calculated from exact figures and refers to the change between 2010 and 2009.
2) In accordance with a change in the EPRA's Best Practice Recommendations 2010, Citycon has changed Net asset value (EPRA NAV) calculations so that fair value of all financial instruments is excluded from the net asset value.
3) Proposal by the Board of Directors.
CEO Petri Olkinuora’s Comments on the Financial Year 2010:
"In 2010, we did not reach our expectations regarding operational performance due to costs and slower than expected stabilisation of completed (re)development projects. The ongoing redevelopment projects and repositioning of existing properties reduced temporarily the company's leasable area by some 30,000 square metres during the year, which affected net rental income.
The largest ongoing (re)development projects include the redevelopment and extension of Åkersberga Centrum, located in Österåker, Sweden, and new shopping centres being built in Myllypuro, Helsinki and Martinlaakso, Vantaa in Finland. All of them are due for completion during 2011 and 2012. Åkersberga Centrum's extension opened in October 2010 and refurbishment of the existing part is currently underway. The fully redeveloped shopping centre will be completed in April 2011.
The refurbishment projects at Forum, Jyväskylä and Espoontori, Espoo, both in Finland, were completed in November and December, and were opened almost fully leased.
In 2010, the company continued to divest its non-core residential properties. The aggregate value of these disposals totalled EUR 49.5 million. Following the realised transactions, the value of the company’s remaining residential portfolio in Sweden is approximately EUR 40 million.
The financial position of the company is stable. The directed share issue arranged by the company in September was completed successfully. In addition, the long-term loan agreements concluded during the year enhanced liquidity. At period end, available liquidity totalled EUR 245.0 million.
As my more than eight-year term as the company's CEO comes to an end at the Annual General Meeting in the spring, I would like to thank the Citycon team for their unwavering commitment to the company's development over recent years. The company is now a true shopping centre specialist and an experienced developer, ready for continued growth."
Board Proposal for Dividend Distribution and Distribution of Assets from the Invested Unrestricted Equity Fund
The parent company’s retained earnings amount to EUR 13.6 million, including the loss for the period, EUR -5.0 million. On 31 December 2010, the funds in the parent company’s invested unrestricted equity fund amounted to a total of EUR 201.5 million.
The Board of Directors proposes to the Annual General Meeting of 23 March 2011 that a per-share dividend of EUR 0.04 be paid out for the financial year ending on 31 December 2010, and that a return of equity of EUR 0.10 per share be returned from the invested unrestricted equity fund. The Board of Directors proposes that the record date for dividend payment and equity return be 28 March 2011 and that the dividend and equity return be paid on 8 April 2011.
Outlook
Citycon continues to focus on increasing its net cash from operating activities and direct operating profit. In order to implement this strategy, the company will pursue value-added activities while monitoring the market for potential acquisitions.
The initiation of planned projects will be carefully evaluated against strict pre-leasing criteria. Citycon intends to continue the divestment of its non-core properties to improve the property portfolio and strengthen the company’s financial position. The company is also considering alternative property financing sources.
In 2011, Citycon expects its turnover and direct operating profit to grow compared with the previous year, based on the existing property portfolio. The company also expects its direct result to increase from the previous year. This estimate is based on already completed (re)development projects and those completed in the future, as well as on the prevailing inflation and euro-Swedish krona exchange rate level. Properties taken offline for planned (re)development projects will reduce net rental income during the year.
The company will specify the growth estimates when publishing Q1 results at the latest, when the operational performance can be estimated more precisely.
New disclosure procedure
Citycon Oyj applies the new disclosure procedure allowed by Standard 5.2b issued by the Finnish Financial Supervisory Authority and hereby publishes its Financial Statements Release in its entirety attached to this stock exchange release. The Financial Statements Release is also available on the corporate website at www.citycon.com. Citycon will apply this procedure to the disclosure of its Interim Reports and Financial Statements releases in the future.
Financial Statements and the Report by the Board of Directors
On 8 February 2011, Citycon Oyj’s Board of Directors approved the company’s Financial Statements for the financial year 1 January–31 December 2010. The Financial Statements in their entirety are attached to this stock exchange release. The Corporate Governance Statement of the Citycon Group for the financial year 2010 has been published simultaneously with the Financial Statements and the Report by the Board of Directors. The Financial Statements and the Report by the Board of Directors as well as the Corporate Governance Statement are available on the corporate website at www.citycon.com.
Helsinki, 8 February 2011
Citycon Oyj
Board of Directors
Financial Reports in 2011
Citycon will publish its Annual and Sustainability Report 2010 on the corporate website in week 8 of 2011 at the latest, and in print in week 9 of 2011 at the latest.
Citycon will issue three interim reports during the financial year 2011 as follows:
January–March 2011, on Wednesday 4 May 2011, at approximately 9.00 a.m.
January–June 2011, on Wednesday 13 July 2011, at approximately 9.00 a.m. and
January–September 2011, on Wednesday 12 October 2011, at approximately 9.00 a.m.
Annual General Meeting
Citycon Oyj will hold its Annual General Meeting at Marina Congress Center, Katajanokanlaituri 6, Helsinki, Finland, on Wednesday 23 March 2011, starting at 2.00 p.m.
For more investor information, please visit the corporate website at www.citycon.com.
For further information, please contact:
Petri Olkinuora, CEO
Tel +358 20 766 4401 or +358 400 333 256
petri.olkinuora@citycon.fi
Eero Sihvonen, Executive Vice President and CFO
Tel +358 20 766 4459 or +358 50 557 9137
eero.sihvonen@citycon.fi
Distribution:
NASDAQ OMX Helsinki
Major media
www.citycon.com