Citycon's Interim Report 1 January-31 March 2006
Summary
- Turnover improved to EUR 27.3 million (Q1/2005: EUR 21.2 million).
- Profit before taxes came to EUR 24.9 million (EUR 7.8 million), including EUR
15.5 million valuation gains (EUR 0.0 million)
-Profit before taxes without the valuation items increased to EUR 9.4 million
(EUR 7.8 million)
- Earnings per share were EUR 0.13 (EUR 0.05), earnings per share without the
valuation items and the related tax impact was EUR 0.05 per share (EUR 0.05)
- Net cash from operating activities per share amounted to EUR 0.11 (EUR 0.11)
- The most significant acquisitions in Finland were the Tullintori shopping
centre in Tampere and Myyrmanni in Vantaa, the latter becoming fully owned by
Citycon
- In Sweden, Citycon acquired five retail centre properties in the Greater
Gothenburg Area
- The company decided in March to raise EUR 75.0 million equity through a rights
issue in April
Key figures and ratios
1-3 2006 1-3 2005 1-12 2005
Turnover, EUR million 27.3 21.2 92.2
Operating profit, EUR million 31.9 14.2 105.2
% of turnover 117.0 67.2 114.1
Profit before taxes, EUR million 24.9 7.8 74.2
Profit for the period, EUR million 18.9 5.9 59.8
Fair market value of
investment properties, EUR million 1,057.6 736.4 956.6
Earnings per share (basic), EUR 0.13 0.05 0.49
Earnings per share (diluted), EUR 0.13 0.05 0.49
Earnings per share (basic) without the effects of
change in fair values, EUR 0.05 0.05 0.21
Net cash from operating activities
per share, EUR 0.11 0.11 0.21
Equity per share, EUR 2.63 2.17 2.60
P/E (price / earnings) ratio 8 12 6
Return on equity (ROE), % 20.9 9.6 22.5
Return on investment (ROI), % 12.4 7.6 13.5
Equity ratio, % 33.8 31.7 36.7
Gearing, % 178.9 198.8 156.8
Net rental yield, % 8.2 8.7 8.4
Occupancy rate, % 96.7 96.4 97.2
Personnel at the end of the period 59 45 57
Business Environment
During the report period, despite toughening competition, the market for the
shopping-centre property business remained favourable, with international
investors showing a keen interest in Nordic retail properties. Finnish retail
sales continued to grow despite lower consumer confidence in March. Demand for
retail premises was still active and occupancy rates remained high, these
favourable developments being encouraged by low inflation. The slight growth in
interest rates did not have any major effect on the market situation.
Financial Performance
Citycon improved its reported turnover by 28.3 per cent, to EUR 27.3 million (EUR
21.2 million), due mainly to property investments made in Finland, Sweden and
Estonia in 2005 and 2006.
Profit before taxes rose by 217.7 per cent, to EUR 24.9 million (EUR 7.8
million), including EUR 28.3 million in fair-value increase in investment
properties and EUR 12.8 million in fair-value decrease in investment properties.
Earnings per share came to EUR 0.13 (EUR 0.05). Earnings per share, excluding
items due to changes in fair value, amounted to EUR 0.05 (EUR 0.05).
Property Portfolio in Summary
Citycon engages in the retail-property business throughout the ownership chain,
i.e. development, ownership, leasing and management of properties. Citycon
operates through the following three divisions: Shopping Centres, Supermarkets
and Shops, and Property Development.
At the end of the report period, the company owned 28 (16) shopping and retail
centres and 127 (128) supermarkets and shops. On 31 March 2006, the market value
of the company's property portfolio totalled EUR 1,057.6 million, of which
shopping and retail centres accounted for 69.1 per cent (60.8 per cent) and
supermarkets and shops 30.9 per cent (39.2). Finland, Sweden and Estonia account
for 83.8 per cent, 10.4 per cent and 5.8 per cent of the company's property
portfolio, respectively, based on fair values.
In February, Citycon announced that it considers selling some 75 non-core
properties, due to market conditions and interest shown by property investors.
All these properties, with their combined area of around 96,000 sq.m., are
located in Finland. The company plans to carry out the deal during the first half
of 2006.
Changes in Property Portfolio Fair Value
Citycon applies the fair-value model in the measurement of its investment
properties under IAS 40, whereby changes in fair value are recognised through
profit or loss. The most recent valuation statement, dated 18 April 2006, on the
Citycon property portfolio's March-end status, based on an appraisal by Aberdeen
Property Investors Finland Oy, is available on the company's website at
www.citycon.fi. More detailed information on this valuation method is available
in Citycon's Annual Report 2005, page 14.
During the reporting period, the fair value of Citycon's property portfolio rose
by EUR 15.5 million, due to changes in general market conditions and the leasing
business. The report period saw a total value increase of EUR 28.3 million and a
total value decrease of EUR 12.8 million.
Lease Portfolio and Occupancy Rate
At the end of the period, Citycon had a total of 2,327 leases concluded with
1,414 lessees and the occupancy rate for the company's property portfolio stood
at 96.7 per cent (96.4 per cent) with a net yield of 8.2 per cent (8.7 per cent).
First-quarter net rental income increased by 26.5 per cent, to EUR 19.5 million.
Lease portfolio in summary 1-3 2006 1-3 2005 1-12 2005
Number of leases started
during the period 122 77 298
Total area of leases started, sq.m. 39,465 19,684 51,476
Occupancy rate at end of the period ,% 96.7 % 96.4 % 97.2 %
Average length of lease portfolio
at the end of the period, year 3.0 3.6 3.2
Shopping Centres
Citycon leads the Finnish shopping centre business. The company's net rental
income from shopping centres improved by 42.6 per cent, to EUR 13.1 million.
Shopping centres accounted for 67.4 per cent of Citycon's net rental income.
Lease portfolio in summary 1-3 2006 1-3 2005 1-12 2005
Number of leases started during
the period 93 56 233
Total area of leases started, sq.m. 16,293 6,051 29,160
Occupancy rate at end of the period ,% 97.3 % 97.0 % 98.0 %
Average length of lease portfolio at
the end of the period, year 2.4 2.7 2.6
Financial performance
Turnover, EUR million 18.4 12.7 57.4
Change in value of investment
property, EUR million 10.2 - 22.1
Operating profit, EUR million 22.3 9.1 61.2
Gross rental income, EUR million 18.3 12.4 56.1
Net rental income, EUR million 13.1 9.2 40.6
Net rental yield, % 8.0 8.2 8.2
Net rental yield, like-for-like
properties, % 8.1 8.4 8.3
Market value of property
portfolio, EUR million 730.4 447.4 636.7
Capital expenditure, EUR million 83.8 0.8 174.9
The calculation method for net income is based on the guidelines of the KTI
Institute for Real Estate Economics and the IPD Investment Property Databank.
Like-for-like properties refer to properties held by Citycon through the 12-month
reference period. Properties under development and expansion as well as lots are
eliminated from the figures.
Capital expenditure and development projects
The Shopping Centres division's largest first-quarter investments included the
acquisition of retail centres in Lindome, Backa, Hindås, Landvetter and Floda in
the Greater Gothenburg Area, Sweden, the related capital expenditure totalling
EUR 33.4 million. As a result, the Greater Gothenburg Area became Citycon's third
foreign operating region in addition to the Stockholm Metropolitan Area and
Tallinn.
In Finland, the most sizeable investments included the Myyrmanni shopping centre
in Vantaa becoming wholly owned by Citycon, the acquisition of the Tullintori
shopping centre in the heart of Tampere and the purchase of the Valtari shopping
centre in Kouvola.
Supermarkets and Shops
Specialising in the development, lease and management of supermarket and other
retail-outlet properties, the Supermarkets and Shops division reported a 2.7 per
cent improvement in net rental income, to EUR 6.4 million.
Lease portfolio in summary 1-3 2006 1-3 2005 1-12 2005
Number of leases started
during the period 29 21 65
Total area of leases started, sq.m. 23,172 13,633 22,316
Occupancy rate at end of the period ,% 95.5 % 95.7 % 95.8 %
Average length of lease portfolio
at the end of the period, year 4.3 4.8 4.2
Financial performance
Turnover, EUR million 8.9 8.5 34.8
Change in value of investment
property, EUR million 5.3 - 23.8
Operating profit, EUR million 11.6 6.7 49.6
Gross rental income, EUR million 8.9 8.5 34.7
Net rental income, EUR million 6.4 6.2 25.3
Net rental yield, % 8.7 9.6 8.9
Net rental yield, like-for-like
properties, % 8.9 9.7 9.0
Market value of property
portfolio, EUR million 327.2 289.0 320.0
Capital expenditure, EUR million 0.7 0.3 3.6
The calculation method for net income is based on the guidelines of the KTI
Institute for Real Estate Economics and the IPD Investment Property Databank.
Like-for-like properties refer to properties held by Citycon through the 12-month
reference period. Properties under development and expansion as well as lots are
eliminated from the figures.
Citycon is considering selling some 75 non-core properties within its
Supermarkets and Shops division, these properties accounting for roughly 35 per
cent of the division's gross leasable area.
Property Development
The Property Development division's mission is to develop and extend Citycon's
existing and new retail sites together with the company's other divisions. The
division is also responsible for commissioning the construction of new retail
sites. The division's key figures are not reported separately because it has no
property portfolio or rental income.
The division's largest-scale projects underway during the report period included
the extension and refurbishment of the Hervanta shopping centre in Tampere and
Lippulaiva in Espoo.
Human Resources
On 31 March 2006, Citycon Group had a total of 59 (45) employees, 52 of whom
worked in Finland and 7 in Estonia.
Turnover and Profit
Turnover for the period came to EUR 27.3 million (EUR 21.2 million), of which
gross rental income accounted for 99.6 per cent (98.6 per cent). Operating profit
rose to EUR 31.9 million (EUR 14.2 million). Profit before taxes amounted to EUR
24.9 million (EUR 7.8 million) and after taxes EUR 18.9 million (EUR 5.9
million). The effect of changes in the property portfolio's fair value and the
related tax impact on the reported profit was EUR 11.0 million. The reported
profit after taxes is EUR 1.3 million above the Q1/2005 level, taking into
account the changes in the property portfolio's fair value and its related tax
impact.
Capital Expenditure
Citycon's gross capital expenditure totalled EUR 84.5 million (EUR 1.1 million),
of which property acquisitions and property development accounted for EUR 79.5
million (EUR 0.0 million) and EUR 5.0 million (EUR 1.1 million), respectively.
Balance Sheet and Financial Position
The period-end balance sheet total stood at EUR 1,077.8 million (EUR 769.4
million), of which cash and cash equivalents accounted for EUR 12.3 million (EUR
23.1 million). The Group's financial position remained at a healthy level.
On 31 March 2006, Group liabilities totalled EUR 713.2 million (EUR 525.6
million), short-term liabilities accounting for EUR 134.8 million (EUR 32.4
million).
Interest-bearing liabilities increased by EUR 156.7 million, to EUR 664.6 million
(EUR 507.9 million), their interest rate averaging 4.4 per cent (5.2 per cent).
The average loan maturity, weighted according to loan principals, was 2.6 years
(3.3 years) while the average interest-bearing period was 2.1 years (3.4 years).
The Group's equity ratio was 33.8 per cent (31.7 per cent). Interest cover, or
the previous 12 months' profit before interest expenses, taxes and depreciation
relative to net financial expenses, was 2.3. Period-end gearing stood at 178.9
per cent (198.8 per cent).
Citycon's period-end interest-bearing liabilities included 89.2 per cent (86.0
per cent) of floating-rate loans, of which 56.7 per cent (80.6 per cent) had been
converted into fixed rate ones, based on interest-rate swaps. The overall hedging
rate of the loan portfolio was 50.6 per cent. On 31 March 2006, the nominal value
of interest-rate swaps totalled EUR 376.5 million (EUR 339.4 million) while the
market value of derivatives came to EUR -9.4 million (EUR -19.3 million).
Net financial expenses totalled EUR 7.0 (EUR 6.4 million). The increase in net
financial expenses was mainly caused by the higher net interest bearing debt.
Commercial paper programme
In February 2006, Citycon signed a new commercial paper programme worth EUR 100
million, replacing its previous commercial paper programmes valued at EUR 60
million.
Rights issue
On 24 March 2006, Citycon's Board of Directors made a decision on a EUR 75-
million-worth rights issue, as authorised by the Annual General Meeting on 14
March 2006. Accordingly, a total of 27,429,469 new shares were offered for
subscription at a price of EUR 2.75 per share between 3 and 21 April 2006.
Shareholders were entitled to subscribe for one new share against every five
shares held. Consequently, a total of 27,274,949 new shares were subscribed in
the rights issue. The offered shares accounted for around 20 per cent of
Citycon's share capital and votes prior to the issue and the subscribed shares
around 16.5 per cent following the issue.
Citycon plans to use the net proceeds from the rights issue, about EUR 75
million, to ensure financing required for the Group's growth strategy and to
maintain a strong balance sheet. In the implementation of its growth strategy,
Citycon intends to make flexible use of both share-based financing and other
equity-linked financial instruments, with the aim of ensuring an optimum balance
sheet structure while taking the progression of planned investments into account.
Decisions by AGM 2006
Citycon's Annual General Meeting (AGM), held in Helsinki on 14 March 2006,
adopted the financial statements of Citycon Oyj and Citycon Group for 2005 and
discharged the Board of Directors and the CEO from liability. The AGM decided
that a per-share dividend of EUR 0.14 be paid for 2005. The dividends were paid
on 24 March 2006.
Board of Directors and Board emoluments
With the number of Board members remaining at eight, the AGM re-elected the
following Board members for a one-year term: Amir Gal, Raimo Korpinen, Tuomo
Lähdesmäki, Carl G. Nordman, Claes Ottosson, Dor J. Segal and Thomas W. Wernink.
Gideon Bolotowsky (58), M.Sc. (Eng.), Finnish citizen, was elected a new Board
member. As a Board member from 2000 and Board Chairman from 2002, Stig-Erik
Bergström was not available for re-election. At its first meeting, the Board
elected Thomas W. Wernink Chairman and Tuomo Lähdesmäki Deputy Chairman.
The AGM decided that the Chairman of the Board be paid an annual emolument of EUR
150,000, the Deputy Chairman an annual emolument of EUR 60,000 and the ordinary
members of the Board an annual emolument of EUR 25,000. It was further resolved
that the Chairman of the Board be paid a meeting fee of EUR 600 and the Deputy
Chairman and ordinary members of the Board a meeting fee of EUR 400 for each
meeting. The meeting fee will also be paid for the Board committee meetings. In
accordance with the AGM's decision, Finnish Board members have agreed to spend
their annual Board emoluments, less statutory withholding tax, buying Citycon
shares.
Independence of Board members
In the Board of Directors' view, all Board members are independent of the
company, including Thomas W. Wernink whose Consultancy Agreement with Citycon
terminated on 14 March 2006. Furthermore, the Board holds the view that Gideon
Bolotowsky, Raimo Korpinen, Tuomo Lähdesmäki, Carl G. Nordman and Thomas W.
Wernink are independent of major shareholders.
Board committees
At its first meeting, the Board of Directors also elected members to its
committees as follows:
Raimo Korpinen (Chair), Gideon Bolotowsky and Thomas W. Wernink to the Audit
Committee;
Tuomo Lähdesmäki (Chair), Gideon Bolotowsky and Thomas W. Wernink to the
Compensation Committee;
Thomas W. Wernink (Chair), Amir Gal, Carl G. Nordman and Dor J. Segal to the
Investment Committee; and
Tuomo Lähdesmäki (Chair), Amir Gal, Claes Ottosson and Thomas W. Wernink to the
Nomination Committee.
Board authorisations
The AGM authorised the Board of Directors to decide to increase share capital
through one or several rights issues by offering a maximum of 50,000 new shares
at a nominal per-share value of EUR 1.35 for subscription by shareholders, i.e.
the share capital may increase by a maximum total of EUR 67,500,000. The AGM
authorised the Board to decide on the subscription-price determination
principles, the subscription price and other terms and conditions governing the
issues. The authorisation does not entitle the Board to deviate from the pre-
emptive subscription right of the shareholders. The Board exercised this
authorisation on 24 March 2006 when it decided on a share issue based on the
shareholders' pre-emptive subscription right. Following the share issue, the
authorisation entitles the Board to increase the company's share capital by a
further EUR 30,678,818.85 at the most, by issuing a maximum of 22,725,051 new
shares. The authorisation is valid until 14 March 2007.
In addition, the AGM authorised the Board to decide to issue one or several
convertible bonds, issue stock options and increase the company's share capital
through one or several rights issues in such a way that, based on these issues,
the company's share capital may increase by a maximum of EUR 37,025,733 and that
a maximum of 27,426,468 new shares may be offered at a nominal per-share value of
EUR 1.35. Valid until 14 March 2007, this authorisation includes a right to waive
the shareholders' pre-emptive right to subscribe for company shares. Citycon may
not issue stock options as part of its employee incentive scheme.
Auditor
The AGM decided to alter Article 9 of the Articles of Association, regarding
company auditors, in such a way that Citycon has one auditor, which must be an
authorised public accountant firm certified by the Central Chamber of Commerce of
Finland. Accordingly, the AGM elected Ernst & Young Oy, Authorised Public
Accountants, as the company's auditor for 2006, with Tuija Korpelainen acting as
chief auditor, as notified by Ernst & Young Oy.
Share Capital and Shares
Under the Articles of Association, Citycon's minimum share capital totals EUR 100
million and maximum share capital EUR 500 million, within which limits the
company may reduce or increase its share capital without altering its Articles of
Association. The company has a single series of shares, with each share entitling
its holder to one vote at the shareholders' meeting.
At the beginning 2006, Citycon had a share capital of EUR 184,115,724.30 and the
number of shares totalled 136,382,018. The report period saw Citycon increase its
share capital through stock options by a total of EUR 1,033,195.60. The company's
period-end registered share capital amounted to EUR 185,148,919.80 and the number
of shares totalled 137,147,348, each share bearing a nominal value of EUR 1.35.
In January-March, the number of Citycon shares traded on the Helsinki Stock
Exchange totalled 13.4 million (7.8 million) at a total value of EUR 51.6 million
(EUR 21.1 million). The highest quotation was EUR 4.23 (EUR 3.03) and the lowest
EUR 3.20 (EUR 2.40). The reported trade-weighted average price was EUR 3.85 (EUR
2.71), and the share closed at EUR 4.11 (EUR 2.45). The company's market
capitalisation on 31 March 2006 totalled EUR 563.7 million (EUR 275.0 million).
Stock Options
Citycon has two option schemes in force, the 1999 A/B/C scheme and the 2004 A/B/C
scheme. Stock options attached to the 1999 stock-option scheme are listed on the
Helsinki Stock Exchange. These stock-option schemes form part of Citycon's Group-
wide employee incentive and commitment programme.
Amended stock-option terms as a result of share issue
On 24 March 2006, the Board of Directors decided on a share issue based on the
shareholders' pre-emptive subscription right. In order to ensure equal treatment
of holders of Citycon stock options and shares, the Board, under the terms and
conditions governing the stock options, also decided to amend the stock options'
terms and conditions, owing to the share issue. The amended terms and conditions
took effect on 24 March 2006, with related major changes described in the table
below.
Amended stock-option terms and conditions in summary:
1999 stock options
Number Subscription Subscription Share Share
ratio, stock price per subscription subscription
option/share share, EUR start date expiration
date
1999A 1,800,000 1:1.0927 1.35 1 Sept. 2000 30 Sept. 2007
1999B 1,800,000 1:1.0927 1.35 1 Sept. 2002 30 Sept. 2007
1999C 1,727,500 1:1.0927 1.35 1 Sept. 2004 30 Sept. 2007
Not distributed
172,500 1:1.0927 1.35 1 Sept. 2004 30 Sept. 2007
Total 5,500,000
2004 stock options
2004A 1,040,000 1:1.0611 2.2336 1 Sept. 2006 31 March 2009
2004B 1,195,000 1:1.0611 2.6766 1 Sept. 2007 31 March 2010
2004A,
not distributed
260,000 1:1.0611 2.2336 1 Sept. 2006 31 March 2009
2004B,
not distributed
105,000 1:1.0611 2.6766 1 Sept. 2007 31 March 2010
2004C,
not distributed
1,300,000 1:1.0611 - 1 Sept. 2008 31 March 2011
Total 3,900,000
As a result of these amendments, the holders of the remaining 1999 stock option
rights are entitled to subscribe for a maximum of 3,776,928 shares corresponding
to a further share capital increase of EUR 5,098,852.80. The 2004 stock options
entitle their holders to subscribe for a maximum of 4,138,290 shares, with the
result that the company's share capital may increase by a maximum of EUR
5,586,691.50.
More information on the company's stock option schemes is available on pages 8 to
9 and 26 to 28 in the Financial Statements Appendix to the Annual Report 2005.
Events after the Period
On 24 March 2006, Citycon's Board of Directors decided on a EUR 75 million rights
issue based on the AGM's authorisation of 14 March 2006. The rights issue was
completed successfully on 21 April 2006. A total of 27,274,949 shares were
subscribed in the rights issue at a per-share subscription price of EUR 2.75
equalling approximately 99.4 per cent of the shares offered. The resulting share-
capital increase of EUR 36,821,181,15 is expected to be registered in the Trade
Register on 28 April 2006. The new shares traded on the Helsinki Stock Exchange
as the so-called interim shares since 24 April 2006 will be combined with the
company's current class of shares (Trading code CTY1S) as soon as the share-
capital increase has been registered in the Trade Register. This combination is
expected to take place on 28 April 2006 and the new shares, together with the old
ones, should be available for public trading on the Helsinki Stock Exchange's
Main List as of 2 May 2006.
More detailed information on the rights issue can be found in Citycon's stock
exchange releases, published in March and April 2006 and available on the
company's website at www.citycon.fi.
In early April, a total of 546,350 shares were subscribed on the basis of the
1999 stock-option scheme, under the amended terms and conditions, with the
resulting share-capital increase being registered in the Trade Register on 18
April 2006. The new shares became available for public trading on 19 April 2006.
A total of 38,244 new Citycon shares at a per-share nominal value of EUR 1.35
were subscribed on 19 April, exercising stock options based on the 1999 A/B/C
stock-option scheme. The resulting share-capital increase of EUR 51,629.40 will
be registered in the Trade Register circa 4 May 2006 and the new shares should
become available for public trading on 5 May 2006.
The per-share subscription price of the shares subscribed with the option rights
was EUR 1.35. All of the subscribed shares entitle their holders to a dividend
for 2006. Other shareholder entitlements will take effect as of the date of
registration of the share capital increase. Each share entitles its holder to one
vote.
The unexercised stock options based on Citycon's 1999 stock-option scheme entitle
their holders to subscribe for a further 3,192,334 new shares, with the result
that the company's share capital may increase by a further EUR 4,309,650.90. The
share subscription period will expire on 30 September 2007.
As a result of the above increases, Citycon Oyj's registered share capital totals
EUR 222,759,302.85 and the number of shares 165,006,891.
Future Outlook
Citycon expects demand, occupancy rates and rents for its retail premises to
remain stable in the Helsinki Metropolitan Area and Finland's major cities as
well as in Sweden and Estonia. In this increasingly intensified competitive
environment, the company continues to seek opportunities to expand its business
in Finland, Scandinavia and the Baltic countries.
Due to favourable market prospects and acquisitions and extension projects
carried out in 2005 and to be carried out in 2006, Citycon expects growth in
business and operating results.
Condensed Consolidated Income Statement, IFRS
EUR MILLION 1-3 2006 % 1-3 2005 % 1-12 2005
Turnover 27.3 100.0 21.2 100.0 92.2
Other operating income 0.2 0.9 0.0 0.0 0.3
Net fair value gains on
investment property 15.5 56.9 - 0.0 45.9
Net gains on sale of
investment property - 0.0 0.3 1.3 0.3
Expenses
Depreciation and
impairment loss 0.1 0.3 0.0 0.0 0.2
Operating expenses 11.0 40.5 7.3 34.2 33.3
Operating profit 31.9 117.0 14.2 67.1 105.2
Net financial income
and expenses 7.0 25.8 6.4 30.2 31.1
Profit before taxes 24.9 91.2 7.8 36.9 74.2
Income tax expense -6.0 -22.0 -2.0 -9.3 -14.4
Profit for the period 18.9 69.2 5.9 27.5 59.8
Attributable to
Parent company shareholders 18.1 5.9 59.2
Minority interest 0.8 - 0.6
Earnings per share (basic),
EUR 0.13 0.05 0.49
Earnings per share (diluted),
EUR 0.13 0.05 0.49
Condensed Consolidated Balance Sheet, IFRS
EUR MILLION 31 March 2006 31 March 2005 31 Dec. 2005
Assets
Non-current assets
Investment property 1,057.6 736.4 956.6
Property, plant and equipment 0.5 0.2 0.7
Deferred tax receivables - 5.4 -
Other non-current assets 0.3 0.0 0.2
Total non-current assets 1,058.5 742.0 957.6
Current assets
Trade and other receivables 7.0 4.2 9.9
Cash and cash equivalents 12.3 23.1 15.6
Total current assets 19.4 27.4 25.5
Total assets 1,077.8 769.4 983.1
Liabilities and Shareholders' Equity
Equity attributable to parent company shareholders
Share capital 185.1 156.8 184.1
Share issue - - 1.1
Share premium fund and
other reserves 78.8 41.5 85.4
Fair value reserve -6.0 -13.0 -10.5
Treasury shares - -4.7 -
Retained earnings 102.3 63.3 96.5
Total equity attributable to
parent company shareholders 360.3 243.9 356.6
Minority interest 4.3 - 3.6
Total shareholders' equity 364.6 243.9 360.2
Liabilities
Interest-bearing liabilities 566.5 493.2 542.7
Deferred tax liabilities 11.9 - 5.8
Total long-term liabilities 578.5 493.2 548.4
Short-term liabilities 134.8 32.4 74.4
Total liabilities 713.2 525.6 622.9
Total liabilities and
shareholders' equity 1,077.8 769.4 983.1
Condensed Consolidated Statement of Changes in Shareholders' Equity, IFRS
EUR MILLION
Equity attributable to parent company shareholders
Share Share Share Fair Treasury Retained
capital issue premium value shares earnings
fund reserve
and
other
reserves
Balance at
1 Jan. 2005 156.8 - 41.5 -13.3 -4.7 57.4
Cash flow hedges 0.3
Profit for the period 5.9
Total recognized
income and expense for
the period 0.3 5.9
Other changes 0.0
Balance at
31 March 2005 156.8 - 41.5 -13.0 -4.7 63.3
Balance at
1 Jan. 2006 184.1 1.1 85.4 -10.5 - 96.5
Cash flow hedges 4.5
Profit for the period 18.1
Total recognized income
and expense for the period 4.5 18.1
Change in
share capital 1.0 -1.1 0.0
Dividends -6.6 -12.6
Share subscriptions
based on stock options 0.2
Balance at
31 March 2006 185.1 - 78.8 -6.0 0.0 102.3
Equity Minority Shareholders'
attributable interest equity,
to parent total
company
shareholders
Balance at 1 Jan. 2005 237.7 - 237.7
Cash flow hedges 0.3 0.3
Profit for the period 5.9 5.9
Total recognized income
and expense for the period 6.1 6.1
Other changes 0.0 0.0
Balance at 31 March 2005 243.9 - 243.9
Balance at 1 Jan. 2006 356.6 3.6 360.2
Cash flow hedges 4.5 4.5
Profit for the period 18.1 0.7 18.8
Total recognized income and
expense for the period 22.7 22.7
Change in share capital 0.0 0.0
Dividends -19.2 -19.2
Share subscriptions based
on stock options 0.2 0.2
Balance at 31 March 2006 360.3 4.3 364.6
Condensed Consolidated Cash Flow Statement, IFRS
EUR MILLION 1-3 2006 1-3 2005 1-12 2005
Cash flow from operating activities
Profit before taxes 24.9 7.8 74.2
Adjustments -8.7 6.3 -14.1
Cash flow before change in
working capital 16.2 14.1 60.1
Change in working capital -1.3 0.3 1.9
Cash generated from operations 14.9 14.4 62.0
Paid interest and other
financial charges -1.9 -0.8 -32.3
Received interest and
other financial income 0.0 0.1 0.4
Taxes received and paid 1.5 -0.9 -5.2
Net cash from operating activities 14.5 12.7 24.8
Cash flow from investing activities
Acquisition of subsidiaries,
less cash acquired -46.5 - -92.6
Purchase of property, plant and
equipment -38.0 -1.0 -7.2
Sale of investment property - 2.8 2.8
Proceeds from sale of other
investments - 1.0 1.0
Net cash used in investing activities -84.4 2.5 -96.1
Cash flow from financing activities
Proceeds from share issue - - 74.4
Proceeds from short-term loans 101.0 - 134.6
Repayments of short-term loans -36.0 - -108.6
Proceeds from long-term loans 30.0 - 199.7
Repayments of long-term loans -10.8 - -205.6
Dividends paid -17.5 - -15.7
Net cash from/used in
financing activities 66.7 0.0 78.9
Net change in cash and
cash equivalents -3.2 15.2 7.7
Cash and cash equivalents
at period-start 15.6 7.9 7.9
Effects of exchange rate changes 0.0 - -
Cash and cash equivalents
at period-end 12.3 23.1 15.6
Segment Information
EUR MILLION 1-3 2006 1-3 2005 1-12 2005
Turnover
Shopping Centres 18.4 12.7 57.4
Supermarkets and Shops 8.9 8.5 34.8
Unallocated - 0.0 -
Total 27.3 21.2 92.2
Operating Profit
Shopping Centres 22.3 9.1 61.2
Supermarkets and Shops 11.6 6.7 49.6
Unallocated -2.0 -1.6 -5.5
Total 31.9 14.2 105.2
Key Financial Figures
1-3 2006 1-3 2005 1-12 2005
Earnings per share (basic), EUR 0.13 0.05 0.49
Earnings per share (diluted), EUR 0.13 0.05 0.49
Equity per share, EUR 2.63 2.17 2.60
Return on equity (ROE), % 20.9 9.6 22.5
Return on investment (ROI), % 12.4 7.6 13.5
Equity ratio, % 33.8 31.7 36.7
Consolidated Contingent Liabilities
EUR MILLION 31 March 2006 31 March 2005 31 Dec. 2005
Mortgages on land
and buildings 7.8 2.4 7.8
Group's Derivative Financial Instruments
EUR MILLION 31 March 2006 31 March 2005 31 Dec. 2005
Nominal Fair Nominal Fair Nominal Fair
value value value value value value
Interest rate and foreign
exchange derivatives
Interest rate and
currency swaps
Maturing in 2007 78.2 0.4 78.2 -0.7 78.2 -0.1
Maturing in 2008 50.0 -1.0 50.0 -2.3 50.0 -1.5
Maturing in 2009 145.3 -4.3 128.2 -8.5 125.3 -6.3
Maturing in 2010 83.0 -4.6 83.0 -7.7 83.0 -6.8
Maturing in 2011 20.0 0.2 - - - -
Total 376.5 -9.4 339.4 -19.3 336.5 -14.7
The fair values of derivatives reflect their values if all agreements were closed
at the market price at the end of the period. Derivatives have been used for
hedging the loan portfolio.
The fair values include an accrued interest of EUR 1.4 million (EUR 1.7 million)
for the period, which has been booked in interest expenses. The fair values
include the positive values of EUR 0.8 million (EUR 0.0 million) and the negative
values of EUR 10.2 million (EUR 19.3 million).
The figures are unaudited.
Accounting Principles
The accounting principles applied in the annual financial statements as of 31
December 2005 are applied in these financial statements.
In the annual financial statements at 31 December 2005, Citycon change to
calculate wholly owned, domestic real estate companies'
deferred tax liability on the temporary difference between the debt-free cost of
these companies' shares and their fair value. The figures for the comparison
period 1 January-31 March were changed to comply with the new accounting
practice.
Financial Information in 2006
Interim report for 1 Jan - 30 June 2006 will be published on 21 July 2006.
Further information for investors is available on Citycon's website,
www.citycon.fi.
Helsinki, 27 April 2006
CITYCON OYJ
Board of Directors
Further information:
CEO Mr Petri Olkinuora
Tel. +358 9 6803 6738 or +358 400 333 256
petri.olkinuora@citycon.fi
CFO Mr Eero Sihvonen
Tel. +358 9 6803 6730 or +358 50 557 9137
eero.sihvonen@citycon.fi
Distribution:
Helsinki Stock Exchange
Main media
www.citycon.fi
Report on the general review of Citycon Oyj's interim report for the period 1
January - 31 March 2006
We have generally reviewed the interim report of Citycon Oyj for the period 1
January - 31 March 2006. The Board of Directors and the Managing Director have
prepared an interim report in accordance with the Securities Market Act, chapter
2, paragraph 5. Based on our interim review we express at the request of the
Board of Directors a report in accordance with the Securities Market Act, chapter
2, paragraph 5.
We conducted our general review in accordance with the International Standard on
Auditing applicable to general review engagements. This standard requires that we
plan and perform the review to obtain reasonable assurance as to whether the
financial statements are free of material misstatement. The general review is
limited primarily to inquiries of company personnel and analytical procedures
applied to financial data and thus provides less assurance than an audit. We have
not performed an audit and, accordingly, we do not express an audit opinion.
Based on our general review, nothing has come to our attention that causes us to
believe that the interim report does not give a true and fair view in accordance
with the Securities Market Act regarding the financial position of Citycon Oyj.
Helsinki, 27 April 2006
Ernst & Young Oy
Authorized Public Accountants
Tuija Korpelainen
Authorized Public Accountant