Citycon's interim report, 1 Jan.?30 Sept

Stock exchange releases - 30 October 2003


Citycon's interim report, 1 Jan.–30 Sept. 2003
- Profit before extraordinary items and taxes was EUR 15.4
million (EUR 15.8 million) including EUR 0.2 million in
capital gains (EUR 0.4 million).
- Turnover was EUR 57.9 million (EUR 59.2 million).
- Earnings per share were EUR 0.11 (EUR 0.11).
- Demand for commercial premises and occupancy rates
continued to be strong during the period under review.

KEY INDICATORS
1-9 2003 1-9 2002 1-12 2002
Turnover, EUR million 57.9 59.2 79.0
Operating profit,
EUR million 33.2 34.5 43.9
% of turnover 57.3 58.2 56.6
Profit before extraordinary
items and taxes,
EUR million 15.4 15.8 19.2
% of turnover 26.6 26.7 24.2
Profit for the period 11.3 11.4 13.8
Number of employees at
30 September, 2003 35 33 33
Earnings per share, euros 0.11 0.11 0.14
Equity per share, euros 1.98 1.94 1.96
Return on equity, % 7.6 7.9 7.1
Return on equity with
minority interest included,% 5.2 5.4 4.8
Return on investment, % 6.1 6.3 6.0
Equity ratio, % 48,3 48.2 48,4
Equity ratio with capital loan
not counted as
shareholder's equity, % 39.1 38.9 39,1
Net rental income of
property portfolio, % 8.5 8.6 8.6
Financial occupancy rate
of commercial property, % 97.6 98.0 97.8

TREND IN THE BUSINESS ENVIRONMENT
Citycon's strong placement in today's market is based on
the company's business focus on retail premises. Retail
premises account for roughly 98 per cent of the company's
property portfolio. Of the property portfolio 53.2 per cent
is in the Helsinki Metropolitan Area and 28.0 per cent is
in Finland's other largest cities.

During the period under review, strong sales by the retail
trade maintained demand for rental premises, particularly
in the Helsinki Metropolitan Area and Finland's other
largest cities. Vacancy rates for commercial premises
remained low. The vacancy rate for commercial premises in
the Helsinki Metropolitan Area was 1.4 per cent, and in the
other largest cities, such as Tampere, Oulu, Lahti and
Jyväskylä, vacancy rates were 1.0–2.6 per cent. The figures
are based on a market survey made public by Catella
Property Consultants Ltd in September.

The background to the favourable trend in retailing is
private consumption, which held up better in Finland than
in the rest of the euro area during the first nine months
of the year. Although growth in retail sales has slowed in
comparison with last year, it was still strong. According
to Statistics Finland, in the January-August period
department store business grew by 5.7 per cent and
groceries business by 3.7 per cent relative to the same
period last year.

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. During the period under review, the company
signed a total of 138 leases, 104 of which were for
premises in shopping centres and 34 were for supermarkets
and shops. At the end of the period Citycon had a total of
1,143 leases with roughly 700 lessees. The average duration
of the leases is 3.7 years.

TREND IN PORTFOLIO OF LEASES BY DIVISION
1-9 2003 1-12 2002
Shopping centres
Number of leases signed during
the period 104 155
Leases signed with new customers 68 123
Leases signed with existing customers 36 32
Total area of leases signed, sg.m. 12 131 19 555
Financial occupancy rate at end of
the period, % 98,3 98,0
Averagy validity of lease portfolio
at end of the period, years 2,9 3,4

Supermarkets and shops
Number of leases signed during
the period 34 83
Leases signed with new customers 23 53
Leases signed with existing customers 11 30
Total area of leases signed, sg.m. 8,058 34,095
Financial occupancy rate at end of
the period, % 96.9 97.7
Average validity of lease portfolio
at end of the period, years 4,4 4,8

RENTAL INCOME
Roughly 70 per cent of Citycon's rental income 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 of nine months totalled EUR 40.9 million (EUR
42.1 million). Shopping centres' share of net rental income
was 49.6 per cent (49.2%) and that of supermarkets and
shops was 50.4 per cent (50.8 %). The financial rental
occupancy rate of Citycon's entire property portfolio was
97.6 per cent (98.0%).

TREND IN RENTAL INCOME BY DIVISION
1-9 2003 1-12 2002
Shopping centres
Gross rental income, Me 26,8 35,9
Net rental income, Me 20,3 27,7
Net yield rate, % 8,0 8,2

Supermarkets and shops
Gross rental income, Me 27,4 37,8
Net rental income, Me 20,6 28,5
Net yield rate, % 9,0 9,1

TURNOVER AND OPERATING PROFIT
Citycon's turnover during the first nine month of 2003 was
EUR 57.9 million (EUR 59.2 million). Gross rental income
accounted for 93.6 per cent (92.3%) of turnover. The 13
shopping centres and the 15 largest supermarkets that
Citycon owns generate more than 75 per cent of the income
from the company's operations.

The operating profit for the period under review was EUR
33.2 million (EUR 34.5 million). The operating profit
declined in comparison with the same period last year due
to the properties sold. Capital gains and non-recurring
other income were also larger in the comparison period. The
net profit for the period was EUR 11.3 million (EUR 11.4
million). The net profit includes EUR 0.2 million in
capital gains (EUR 0.4 million).

BALANCE SHEET AND FINANCING
At the end of the period under review, the book value of
Citycon's property portfolio was EUR 643.3 million. The
number of properties was 146, of which 13 were shopping
centres and 133 were supermarket or shop premises. The
balance sheet total as at 30 September 2003 was EUR 752.2
million (EUR 743.8 million), of which liquid assets were
EUR 23.5 million (EUR 5.5 million).

The Group's financing situation remained good during the
period under review. At the end of September 2003 Citycon
had a total of EUR 386.6 million (EUR 383.5 million) of
liabilities. Interest-bearing debt amounted to EUR 440.3
million (EUR 438.6 million), of which capital loan
accounted for EUR 68.5 million (EUR 68.5 million). The
Group's equity ratio was 48.3 per cent (48.2%). With the
capital loan not included in shareholders' equity, the
equity ratio was 39.1 per cent (38.9%).

Net financing expenses declined to EUR 17.9 million (EUR
18.7 million). The average interest rate for debt during
the period under review was 5.5 per cent (5.6%). The
average borrowing period was approximately 4.8 years (5.2
years) and the average interest-rate fixing period was 4.1
years (3.9 years).

Of Citycon's debt portfolio, 84.4 per cent was floating
rate loans, of which 74.7 per cent has been converted to
fixed rate by means of interest rate swaps and 14.5 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 277.2 million and that of the interest rate
caps was EUR 53.8 million. The interest margin, i.e., the
previous twelve months' profit before interest expenses,
taxes and depreciation in proportion to net financing
expenses, was 2.1.

BUSINESS DEVELOPMENT PROJECTS
Citycon's gross investments during the period under review
amounted to EUR 2.0 million (EUR 5.8 million). The
investments focused on general major renovations and
conversion work as well as on planning for development
projects.

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's construction stage made progress during the
period under review according to plan. The extension is
scheduled for completion in August 2004. Demand for the new
premises for lease in IsoKarhu continued to be brisk during
the period under review and the rental occupancy rate was
88.5 per cent.

The Shopping Centres Division also continued the planning
of extensions to the shopping centres Myyrmanni in Vantaa
and Lippulaiva in Espoo. The division also deployed effort
in planning the commercial development of the shopping
centre Jyväskeskus. The aim is to make Jyväskeskus more
commercially attractive through measures including a new
well-known anchor tenant H&M Hennes & Mauritz AB and by
enhancing the restaurant services in the property. The
development and conversion of Jyväskeskus will be carried
out in stages in 2004, and Citycon will invest roughly EUR
2 million in the property. The company estimates that the
positive effect of the investments on income will not be
felt before 2005 at the earliest.

In the Supermarkets and Shops Division, development
projects on the Citymarket outlet in Pori and the K-
Supermarket in the Mankkaa district of Espoo, carried out
in partnership with the customers, were completed. The aim
of the projects is to underpin the properties' market
position. Citycon invested roughly a million euros in the
projects. The company estimates that the investments will
have a positive impact on the properties' rental income
during the last quarter of this year.
During the period under review, a similar new development
project was started in partnership with a customer at the
K-Supermarket in Valkeakoski. The project is forecast for
completion for Christmas 2003. Citycon invested EUR 0.8
million in the project and it estimates that the
investments will have a positive impact on the property'
rental income in the first quarter of 2004.

The Retail Park Division continued to survey the commercial
prospects for new shopping centres in the Helsinki
Metropolitan Area and in the Tampere and Turku market
zones. As planned, Citycon deployed effort in the processes
of land acquisition and zoning during the period under

review.

During the first nine months 2003, in accordance with its
strategy, Citycon sold off six properties and reduced its
holdings in two properties. The capital gains from the
properties were EUR 0.2 million. The capital gains on fixed
assets are included in other income. 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 35 (33) employees, of whom 28 (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'S SHARES AND HOLDINGS
Citycon's share capital as at 30 September 2003 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 9.1 million
shares and EUR 10.7 million. The high price quoted during
the period was EUR 1.34 and the low was EUR 1.00. The
weighted average price for the period was EUR 1.18 and the
closing price on 30 September 2003 was EUR 1.32. The
company's market capitalisation at the end of the period
under review was EUR 134,5 million, when company-held
shares are deducted from the total.

At the end of September 2003, the company had a total of
1,146 shareholders. The ten biggest shareholders held a
total of 83.4 per cent of the company's shares and voting
rights. The biggest shareholders were Nordea Bank Finland
Plc, Kesko Corporation together with its subsidiaries,
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 roughly 4.1 million, being 3.9 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 4.7 million, 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
September 2003 corresponded to the purchase price, which
was below the market price on the review date.

EVENTS AFTER THE PERIOD UNDER REVIEW
Citycon's acquired the shopping centre Jyväskylän Forum
from If P&C Insurance Ltd. The purchasing price was EUR
28.3 million. The property's roughly 15,000 square metres
of retail premises have a rental occupancy rate of over 99
per cent. At the time of the purchase, the property had a
net yield of 8.3 per cent on the purchase price.

The purchase is financed with syndicated loan arrangement.
As a part of the financing arrangements for the
transaction, Citycon's Board of Directors decided on 30
October 2003, on the basis of an authorisation granted by
the annual general meeting of 20 March 2003, to surrender
3,874,000 Citycon shares held by the company for sale in
public dealing by the Helsinki Exchanges.

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 net profit for the whole year will be on
a par with the figures for 2002.

Helsinki 30 October 2003
Citycon Oyj
Board of Directors

CONSOLIDATED INCOME STATEMENT
EUR million 1-9 2003 1-9 2002 1-12 2002
Turnover 57.9 59.2 79.0
Other income 0.2 0.7 0.7
Operating profit 33.2 34.5 43.9
Financing expenses (net) -17.9 -18.7 -24.7
Profit before extraordinary
items and taxes 15.4 15.8 19.2
Profit for the period 11.3 11.4 13.8

CONSOLIDATED BALANCE SHEET
EUR million
Assets
Fixed assets
Intangible assets 4.1 3.9 4.0
Tangible assets 620.7 628.5 625.5
Financial assets 96.3 98.2 97.7
Company shares 4.7 4.0 4.3
Fixed assets, total 725.8 734.5 731.5
Current assets
Debtors 2.9 3.8 3.1
Cash in hand and at bank 23.5 5.5 11.7
Current assets, total 26.4 9.3 14.8
Assets, total 752.2 743.8 746.3

Liabilities and
shareholders' equity
Shareholders' equity 206.6 201.4 204.0
Capital loan 68.5 68.5 68.5
Minority interest 90.6 90.5 90.5

Liabilities 386.6 383.5 383.3
Long-term 366.1 355.7 371.8
Short-term 20.5 27.8 11.5
Liabilities and
shareholders' equity, total 752.2 743.8 746.3

Gross investments in balance
sheet fixed assets 2.0 5.8 5.9
as % of turnover 3.5 9.8 7,4
Depreciation and
value adjustments 4.9 5.2 7.6
Employees, average 33 33 33

CASH FLOW STATEMENT
EUR million 1-9 2003 1-12 2002
CASH FLOW FROM BUSINESS OPERATIONS
Profit/loss before
extraordinary items 15.4 19.2
Adjustments:
Depreciation 4.9 7.6
Financial income and expenses 17.9 24.7
Other adjustments 0.1 -0.2
Cash flow before change in
working capital 38.2 51.4

Change in working capital 0.5 0.0
Cash flow from business operations
before financing items and taxes 38.7 51.4

Interest paid and payments for other financing
expenses of business operations -15.8 -23.8
Dividends and interests received
from business operations 0.3 0.2
Direct taxes paid -3.2 -3.6
Cash flow from business operations (A) 20.0 24.2

CASH FLOW FROM INVESTMENTS
Investments in tangible
and intangible assets -1.9 -1.9
Shares in subsidiaries purchased 0.0 -5.8
Shares in subsidiaries sold 1.4 1.2
Shares in associated companies purchased -0.2 -1.3
Shares in associated companies sold 1.6 5.2
Other items 0.1 0.1
Cash flow from investments (B) 1.0 -2.7

CASH FLOW FROM FINANCING
Fund payments by minority 0.0 0.1
Withdrawals of short-term loans 0.0 0.0
Repayments of short-term loans 0.0 -7,1
Withdrawals of long-term loans 0.0 3.9
Repayments of long-term loans -0.2 -4.3
Dividend paid and other
distribution of profit -9.2 -8.2
Cash flow from financing (C) -9.3 -15.5

Change in cash assets (A+B+C)
increase (+)/decrease (-) 11.7 6.0

Cash assets at start of
accounting period 11.7 5.8
Cash assets at end of
accounting period 23.5 11.7

FINANCIAL INDICATORS 1-9 2003 1-9 2002 1-12 2002

Earnings per share, EUR 0.11 0.11 0.14
Equity per share, EUR 1.98 1.94 1.96
Return on equity (ROE), % 7.6 7.9 7.1
ROE with minority interest
included, % 5.2 5.4 4.8
Return on investment (ROI), % 6.1 6.3 6.0
Equity ratio, % 48.3 48.2 48.4
Equity ratio with capital
loan not counted as
as shareholders' equity, % 39.1 38.9 39.1

CONSOLIDATED CONTINGENT LIABILITIES
EUR million
Shares in subsidiaries pledged 0.0 450.7 0.0
Other pledges shares 96.2 96.6 96.5
Mortgages on land
and buildings 337.2 12.0 323.4
Other pledges given 3.2 0.0 0.6

GROUP'S DERIVATIVES
EUR million
Interest-rate
derivatives 30.9.2003 31.12.2002
Par Current Par Current
values values values values

Interest-rate swaps
Maturing in 2004 50.0 -1.7 50.0 -1.5
Maturing in 2007 78.2 0.0
Maturing in 2009 66.0 -7.0 66.0 -5.1
Maturing in 2010 83.0 -7.4 83.0 -5.4
Total 277.2 -16.1 199.0 -12.0

Interest-rate options
Interest rate caps purchased
Maturing in 2004 53.8 0.0 53.8 0.0

The market prices of the derivatives describe their value
if all the derivatives had been closed at the market rate
prevailing on the review date. The interest accruing on the
derivatives during the period under review, being EUR 1.4
million (EUR 0.3 million 31.12.2002) has been booked under
interest expenses. The derivatives have been used to hedge
the loans against increases in interest rates.

COMPANY SHARES 1-9 2003 1-9 2002 1-12 2002
Acquired between 25 November 1999 and 30 September 2003
Number of shares, million 3.9 3.9 3.9
Total par value, EUR million 5.2 5.2 5.2
Share of shareholders'
equity, % 3.7 3.7 3.7
Share of voting rights, % 3.7 3.7 3.7
Acquisition cost paid,
EUR million 4.7 4.7 4.7

The book value of the company-held shares as at 30
September 2003 corresponded to the acquisition cost, which
was lower than the market price on the review date. The
effect of the company-held shares has been eliminated in
the calculation of the financial indicators.

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 financial statements bulletin
for 2003 on 12 February 2004. The annual report will be
published in week 10.

For further investors' information, see Citycon's website
www.citycon.fi.

Further information
CEO Petri Olkinuora
Tel. +358 9 680 36 738 or +358 400 333 256
petri.olkinuora@citycon.fi

CFO Pirkko Salminen
Tel. +358 9 680 36 730 or +358 50 3022 485
pirkko.salminen@citycon.fi

Distribution
Helsinki Exchanges
Main media
www.citycon.fi