CITYCON'S INTERIM REPORT, 1 JAN. ? 30 JU

Citycon Oyj Stock Exchange Release, 28 Aug. 2003 at 9.30am CITYCON'S INTERIM REPORT, 1 JAN. – 30 JUNE 2003 - Profit before extraordinary items and taxes was EUR 9.9 million (EUR 10.4 million). This figure includes EUR 0.1 million in losses on sales of fixed assets (capital gains EUR 0.4 million). - Turnover was EUR 38.7 million (EUR 39.8 million). - Earnings per share were EUR 0.07 (EUR 0.07). - Demand for commercial premises and occupancy rates continued to be strong. KEY INDICATORS 1-6 2003 1-6 2002 1-12 2002 Turnover, EUR million 38.7 39.8 79.0 Operating profit, EUR million 21.6 22.8 43.9 % of turnover 55.8 57.3 56.6 Profit before extraordinary Items and taxes, EUR million 9.9 10.4 19.2 % of turnover 25.5 26.1 24.2 Number of employees 30 June, 2003 36 33 33 Earnings per share, EUR 0.07 0.07 0.14 Equity per share, EUR 1.94 1.90 1.96 Return on equity, % 5.0 5.3 4.8 Return on equity excluding minority interest, % 7.3 7.8 7.1 Return on investment, % 6.0 6.2 6.0 Equity ratio, % 48,3 47,3 48,4 Equity ratio with loan not counted as part of shareholder's equity, % 39,1 38,1 39,1 Net rental income of property portfolio, % 8.4 8.6 8.6 Financial occupancy rate of commercial property, % 97.1 98.0 97.8 TREND IN THE BUSINESS ENVIRONMENT Private consumer demand in Finland remained at a higher level than in the rest of the euro area. Although growth in retail sales has slowed since last year, growth was still strong during the period under review: according to Statistics Finland, in the January-June period department store trade was up by 5.1 per cent and grocery trade was up by 3.7 per cent on the same period last year. The favourable trend in retail sales held up the strong demand for commercial property, particularly in the Helsinki Metropolitan Area and Finland's other major cities. Rental demand for retail premises in central locations remained strong during the period under review. Vacancy rates for commercial property in the Helsinki Metropolitan Area held steady at the same rate as in the early months of the year. The differences between commercial and office premises in terms of demand continued to be substantial during the period under review. Demand and rents for office premises have not improved, and there is still a great deal of vacant office space in the Helsinki Metropolitan Area. CUSTOMERS AND THE TREND IN THE PORTFOLIO OF LEASES There were no significant changes in Citycon's customer structure and its portfolio of leases during the period under review. At the end of the period under review Citycon had 700 lessees, with whom 1,124 leases had been signed. The average duration of the leases was 3.8 years. During the period under review, the company signed a total of 84 leases, 62 of which were for premises in shopping centres and 22 were for supermarkets and shops. Of the leases signed for premises in Citycon's shopping centres, 41 were with new customers and 21 were extensions signed with old lessees. The total area covered by the leases signed was 7,076 square metres. The main new leases negotiated were in Tampereen Koskikeskus (750 square metres) and Rovaniemen Sampotalo (544 sq.m.). The financial occupancy rate of the shopping centres at the end of the period under review continued to be strong at 97.1 per cent. The leases have an average validity of 3.1 years. Of the leases signed for premises in Citycon's supermarkets and shops, 14 were with new customers and 8 were extensions signed with old lessees. The total area covered by the leases signed was 5,308 square metres. The financial occupancy rate of the supermarket and shop premises continued to be good, and at the end of the period under review it was 96.6 per cent. The leases have an average validity of 4.6 years. RENTAL INCOME Of Citycon's rental income, roughly 70 per cent comes from leases signed with the 10 biggest customers. The various Kesko chains are the most important group of customers. Other important lessees include international utility goods chains and companies in banking and finance. Citycon's net rental income from leasing business during the period under review totalled EUR 27.1 million (EUR 28.0 million). Shopping centres' share of net rental income was 49.6 per cent (49.3%) and that of supermarkets and shops was 50.4 per cent (50.7%). The net rental income of the company's entire property portfolio was 8.4 per cent (8.6%), calculated according to the recommendations of the Finnish Institute for Real Estate Economics. The net yield rate for shopping centres held steady at the rate in the early months of the year and totalled 7.9 per cent (8.1%). The net yield rate for supermarkets and shops also held steady at 8.9 per cent (9.2%). The financial rental occupancy rate of Citycon's business premises was 97.1 per cent (98.0%). TURNOVER AND OPERATING PROFIT Citycon's turnover during the period under review was EUR 38.7 million (EUR 39.8 million). Gross rental income accounted for EUR 36.1 million (EUR 37,1 million) of turnover. The 13 shopping centres and the 15 largest supermarkets that Citycon owns generated more than 75 per cent of the income from the company's operations. The operating profit for the period under review was EUR 21.6 million (EUR 22.8 million) and net profit for the period was EUR 7.1 million (EUR 7.4 million). The net profit for the period under review includes EUR 0.1 million in losses on sales of fixed assets (capital gains EUR 0.4 million). BALANCE SHEET AND FINANCE At the end of the period under review, the book value of Citycon's property portfolio was EUR 644.2 million. The number of properties was 149, of which 13 were shopping centres and 136 were supermarket or shop premises. The balance sheet total as at 30 June 2003 was EUR 742.7 million (EUR 748.7 million), of which liquid cash assets were EUR 12.2 million (EUR 9.2 million). The Group's financing situation remained good during the period under review. At the end of the period under review, Citycon had a total of EUR 381.7 million (EUR 392.3 million) of liabilities. Interest-bearing debt stood at EUR 440.3 million (EUR 446.6 million), of which equity loan was EUR 68.5 million (EUR 68.5 million). Financing expenses were down to EUR 12.0 million (EUR 12.6 million). The average interest rate for debt was 5.4 per cent (5.5%). The average borrowing period was approximately 4.4 years (5.5 years) and the average interest-rate fixing period was 4.4 years (4.3 years). The Group's equity ratio was 48.3 per cent (47.3%). With the equity loan not included in shareholders' equity, the equity ratio was 39.1 per cent (38.1%). Of Citycon's debt portfolio, 84 per cent was floating rate loans, of which 75 per cent has been converted to fixed rate by means of interest rate swaps and 15 per cent has been hedged with interest rate caps. The par value of the interest rate swaps at the end of the period under review was EUR 277 million and that of the interest rate caps was EUR 54 million. The debt management margin, i.e., the previous twelve months' profit before interest expenses, taxes and depreciation in proportion to net financing expenses, was 2.1. Citycon's gross investments of the period under review totalled EUR 0.9 million (EUR 4.9 million). The investments focused on general major renovations and conversions of buildings as well as planning for development projects. BUSINESS DEVELOPMENT PROJECTS Citycon is focusing its property portfolio in Finland's biggest cities. Through its development and improvement projects, the company aims to achieve an increasingly strong position as a provider of the best business premises and as a long-term partner for customers. Citycon has separated its operations into three divisions on the basis of customer relationships: Shopping Centres, Supermarkets and Shops, and the Retail Park Division. The Retail Park Division, which was founded at the beginning of the year, is responsible for the planning, development and marketing of new retail centres. The Retail Park Division also participates in the planning of extensions and developments of existing shopping centres, supermarkets and shops. During the period under review, the Retail Park Division continued to investigate the commercial framework for new shopping centres in the Helsinki Metropolitan Area and in the Tampere and Turku market zones. Citycon deployed effort in the processes of land acquisition and zoning according to plan during the period under review. The Shopping Centres Division continued the implementation of a project for an extension to the IsoKarhu shopping centre, which was started in the first quarter of the year. The project advanced to the construction stage and it is scheduled for completion in August 2004. Demand for the new premises for lease has been brisk and 75 per cent of them have already been leased out. The extension will enhance IsoKarhu's market position, boost the number of visitors to the shopping centre and its annual sales. Also during the period under review, the Shopping Centres Division continued to plan extensions to the shopping centres Myyrmanni in Vantaa and Lippulaiva in Espoo, which were started in 2002. The Supermarkets and Shops Division launched a development project for the Citymarket in Pori in partnership with the lessee. Citycon has the aim of developing the property jointly with the lessee to make it better fitted to today's standards for retailing. Also during the period under review, the division carried out major renovations on properties and other conversion work required for the customers' business. During the period under review, in accordance with its selling programme, Citycon sold off four properties in their entirety and reduced its holdings in two properties. Citycon did not carry out any acquisitions of the property portfolio during the period under review. PERSONNEL At the end of the period under review, the Citycon Group had a total of 36 (33) employees, of whom 29 (27) were employed by the parent company. ANNUAL GENERAL MEETING The resolutions of Citycon's annual general meeting of shareholders held on 20 March 2003 were reported in the interim report of 8 May 2003. At the end of the period under review, all the authorisations granted by the AGM were unused in their full amounts. CITYCON SHARES AND HOLDINGS Citycon's share capital at the end of the period under review was EUR 142,800,108.30 and the number of shares was 105,777,858. The par value of a share is EUR 1.35. During the period under review, the total for Citycon shares traded on the Helsinki Exchanges was 4.6 million shares and EUR 4.9 million. The high price quoted during the period was EUR 1.16 and the low was EUR 1.00. The weighted average price for the period was EUR 1.07 and the last traded price on the last trading day of the period (30 June 2003) was EUR 1.08. The company's market capitalisation at the end of the period under review was EUR 110.1 million, when company-held shares are deducted from the total. At the end of the period under review, the company had a total of 1,164 shareholders. The ten biggest shareholders held a total of 81.9 per cent of the company's shares and voting rights. The biggest shareholders were Nordea Bank Finland Plc, Kesko Corporation together with its subsidiaries and associated companies, Sampo Life Insurance Company Limited and Etra Invest Oy Ab; in total, these held 78.0 per cent of the company's shares and voting rights. The number of nominee-registered and foreign-held shares was 3,700,629, being 3.5 per cent of the shares and voting rights. Citycon Oyj held 3,874,000 of its own shares at the end of the period under review. The total purchase price of the shares was EUR 4,675,812.76, with the lowest price per share being EUR 1.10 and the highest EUR 1.35. The company- held shares represent 3.7 per cent of all shares and voting rights. The book value of company-held Citycon shares on 30 June 2003 was EUR 4.2 million. The shares have been valued at the closing price of the period under review, which is lower than the original acquisition cost. OUTLOOK FOR THE FUTURE Citycon forecasts that demand, occupancy rates and rental levels for commercial premises will remain good in the Helsinki area and Finland's other major cities. The company estimates that the turnover and net profit for the whole year will be on a par with the figures for 2002. Helsinki, 28 August 2003 Citycon Oyj Board of Directors EUR 1000 1-6 2003 1-6 2002 1-12 2002 CONSOLIDATED INCOME STATEMENT Turnover 38,690 39,760 78,950 Other income -140 705 735 Operating profit 21,596 22,790 43,895 Financing expenses (net) -11,746 -12,404 -24,715 Profit before extraordinary items and taxes 9 850 10,386 19,180 Net profit for the period under review 7,140 7,444 13,801 CONSOLIDATED BALANCE SHEET Assets Fixed assets Intangible assets 4,066 3,888 4,036 Tangible assets 621,314 629,666 625,508 Financial assets 97,251 98,034 97,710 Company shares 4,184 4,068 4,261 Fixed assets, total 726,814 735,654 731,515 Current assets Debtors 3,695 3,910 3,088 Cash in hand and at bank 12,150 9,181 11,730 Current assets, total 15,845 13,091 14,818 Assets, total 742,659 748,746 746,333 Liabilities and shareholders' equity Shareholders' equity 201,938 197,492 204,045 Equity loan 68,452 68,452 68,452 Minority interest 90,567 90,454 90,521 Liabilities 381,702 392,347 383,315 Long-term 371,719 355,632 371,769 Short-term 9,983 36,715 11,545 Liabilities and shareholders' equity, total 742,659 748,746 746,333 Gross investments in balance sheet fixed assets 926 4,884 5,854 as % of turnover 2,4 12,3 7,4 Planned depreciation and value adjustments 3,212 3,499 7,620 Employees, average 33 31 33 CASH FLOW STATEMENT CASH FLOW FROM OPERATING ACTIVITIES 1-6 2003 1-12 2002 Profit/loss before extraordinary items 9,850 19,180 Adjustments: Planned depreciation 3,211 7,620 Other income and expenses not involving a payment 204 283 Financing income and expenses 11,746 24,715 Other adjustments 100 -448 Cash flow before change in working capital 25,112 51,350 Change in working capital: Increase(-)/decrease (+) in short-term non-interest-bearing receivables 397 19 Increase(-)/decrease (+) in short-term interest-bearing debts 779 -13 Cash flow from operating activities before financing items and taxes 26,288 51,356 Interest paid and payments for other financing expenses of business operations -14,471 -23,814 Dividends received from business operations 17 18 Interest received from business operations 208 228 Direct taxes paid -2,245 -3,626 Cash flow before extraordinary items 9,797 24,162 Cash flow from operating activities A) 9,797 24,162 CASH FLOW FROM INVESTMENTS: Investments in tangible and intangible assets -740 -1,943 Proceeds from the sale of tangible and intangible assets 109 0 Investments in other placements -4 -9 Repayments of outstanding loans 1 3 Shares in subsidiaries purchased 0 -5,850 Shares in subsidiaries sold 225 1,215 Shares in associated companies purchased -156 -1,320 Shares in associated companies sold 479 5,192 Interest received from investments 3 59 Cash flow from investments B) -84 -2,654 CASH FLOW FROM FINANCING: Fund payments by minority 25 78 Withdrawals of short-term loans 5 17 Repayments of short-term loans 0 -7,105 Withdrawals of long-term loans 0 3,924 Repayments of long-term loans -154 -4,311 Dividend paid and other distribution of profit -9,171 -8,152 Cash flow from financing (C) -9,295 -15,548 Change in cash assets (A+B+C) increase (+)/decrease (-) 418 5,960 Cash assets at start of accounting period 11,730 5,770 Cash assets at end of accounting period 12,150 11,730 FINANCIAL INDICATORS 1-6 2003 1-6 2002 1-12 2002 EPS, EUR 0.07 0.07 0.14 Equity per share, EUR 1.94 1.90 1.96 Return on equity (ROE), % 5.0 5.3 4.8 ROE excluding minority interest, % 7.3 7.8 7.1 Return on investment (ROI), % 6.0 6.2 6.0 Equity ratio, % 48,3 47,3 48,4 Equity ratio, % (equity loan not counted as shareholders' equity) 39,1 38,1 39,1 CONSOLIDATED CONTINGENT LIABILITIES Shares pledged (book value) 97,031 97,389 96,506 Shares in subsidiaries 453,037 Other pledges given 1,350 598 633 Mortgages on land and buildings 337,196 11,951 323,440 Interest rate swaps 2002 (2-year fixed interest) par value of underlying instrument 50,000 50,000 market value of underlying instrument 1,737 1,491 Interest rate swaps 2002 (7-year fixed interest) par value of underlying instrument 66,000 66,000 market value of underlying instrument 7,406 5,111 Interest rate swaps 2002 (8-year fixed interest) par value of underlying instrument 83,000 83,000 market value of underlying instrument 8,652 5,418 Interest rate swaps 2003 (4-year and 5-month fixed interest) par value of underlying instrument 78,200 market value of underlying instrument 259 Interest rate option 1998 (5-year interest cap) par value of underlying instrument 78,712 market value of underlying instrument 0 Interest rate swaps 2002 (2-year fixed interest) par value of underlying instrument 53,800 53,800 market value of underlying instrument 0 1 Derivatives have been valued at the market price on the date of closing the books. The calculations comply with the Finnish Financial Supervision Authority's requirements for credit institutions on the valuation of derivatives in financial statements. The derivatives have been used to hedge the loans against increases in interest rates. The company uses derivatives exclusively to reduce or eliminate risks in the balance sheet. COMPANY SHARES 1-6 2003 1-6 2002 1-12 2002 Acquired between 25 November 1999 and 30 June 2003 Number of shares, 1000 3,874 3,874 3,874 Total par value 5,230 5,230 5,230 Share of shareholders' equity, % 3.7 3.7 3.7 Share of voting rights, % 3.7 3.7 3.7 Consideration paid 4,676 4,676 4,676 Company shares have been valued at the closing price on 30 June 2003. Other income includes capital gains on fixed assets, which were previously shown as part of turnover. The figures for the comparison year have been adjusted accordingly. The taxes used are taxes commensurate with the net profit for the period under review. The figures are unaudited. FINANCIAL REPORTING Citycon Oyj will publish its next interim report, for the period January-September, on Thursday 30 October 2003. For further investors' information, see Citycon's website www.citycon.fi. PRESS CONFEENCE The company is to hold a briefing for press and analysts on Thursday 28 August 2003, starting at 1.30 p.m. at Citycon Oyj's premises at Pohjoisesplanadi 35 AB, Helsinki. CEO Petri Olkinuora will address the meeting about Citycon's activities and performance for the period under review and about the company's future prospects. The presentation material will be available for reading after the conference on Citycon's website at www.citycon.fi. Further information: CEO Petri Olkinuora Tel. +358 9 680 36 738 or +358 400 333 256 petri.olkinuora@citycon.fi Distribution: Helsinki Exchanges Main media www.citycon.fi

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