CITYCON'S INTERIM REPORT 1 JANUARY ? 30

CITYCON OYJ STOCK EXCHANGE BULLETIN 11 AUGUST 2004 10.00AM CITYCON'S INTERIM REPORT 1 JANUARY – 30 JUNE 2004 - Profit before extraordinary items and taxes rose to EUR 11.6 million (EUR 9.9 million) - Turnover increased to EUR 44.1 million (EUR 38.7 million) - Earnings per share increased to EUR 0.08 (EUR 0.07) - Demand for retail premises and occupancy rates continued to be strong during the period - Citycon started a process to asses business opportunities in the Scandinavian and Baltic countries KEY INDICATORS 1-6 2004 1-6 2003 1-12 2003 Turnover, EUR million 44.1 38.7 78.1 Operating profit, EUR million 24.5 21.6 43.3 % of turnover 55.5 55.8 55.5 Profit before extraordinary items and taxes, EUR million 11.6 9.9 19.1 Profit , EUR million 8.4 7.1 14.3 Earnings per share, EUR 0.08 0.07 0.14 Earnings per share, diluted, EUR 0.08 0.07 0.14 Equity per share, EUR 1.95 1.94 2.01 P/E (price/earnings) ratio 12 8 11 Return on equity (ROE), % 8.5 7.3 7.1 Return on equity including minority interest,% 5.6 5.0 4.9 Return on investment (ROI), % 6.1 6.0 5.8 Equity ratio, % 44.5 48.3 44.9 Equity ratio with capital loan not counted as part of shareholder's equity, % 36.2 39.1 36.7 Gearing, % 170.8 148.5 163.1 Net rental income, % 8.5 8.4 8.5 Occupancy rate, % 97.1 97.1 97.3 Personnel at the end of period 41 36 34 Trend in the business environment According to Statistics Finland, retail sales grew by 5.8 per cent in the period from December 2003 to February 2004 and the growth rate in the period March-May 2004 was 4.7 per cent. Department store trade grew by 6.3 and 3.4 per cent in these periods. Strong retail sales kept up healthy demand for retail premises and vacancy rates remained low, particularly in the Helsinki Metropolitan Area and Finland's other major cities. Interest rates in the euro zone continued to be at historical lows, although euro interest rates rose during the period. The internationalisation of the Finnish property market continued. Property portfolio and business activities The book value of the property portfolio owned by Citycon was EUR 731.0 million at the end of the period (EUR 644.2 million). Citycon owned 16 shopping centres, which comprised 58.8 per cent of the company's property portfolio book value, and 130 supermarket and shop properties, which comprised 41.2 per cent of the book value of the company's property portfolio. At the end of the period, in terms of balance sheet values, 46.7 per cent of the properties were in the Helsinki Metropolitan Area, 35.5 per cent were in other major Finnish cities and 17.7 per cent were in other parts of Finland. On 26 May 2004, the Board of Directors of Citycon Oyj decided to start a process to assess business opportunities in Scandinavian and the Baltic countries. At the same time, the company will continue the implementation of its strategy of expanding its core business in Finland. Based on the outcome of the assessment process, the Board will later consider amending the geographical scope of its strategy. Citycon will continue, in accordance with its strategy, to focus on retail premises in Finland, mainly in the Helsinki Metropolitan Area and the biggest regional centres. Customers, the portfolio of leases, and the occupancy rate Citycon's customers are Finnish and international speciality and grocery retail chains, supermarkets and department stores, and independent dealers who are not part of chains. There were no significant changes in the customer structure during the period. During the period, the company signed a total of 182 leases, of which 79 came with the acquisition of Torikeskus in Seinäjoki. At the end of the period, Citycon had a total of 1,465 leases with roughly 860 lessees. The average length of the leases was 3.6 years. The occupancy rate for Citycon's entire property portfolio was 97.1 per cent (97.1%). TREND IN PORTFOLIO OF LEASES BY DIVISION 1-6 2004 1-6 2003 1-12 2003 Shopping centres Number of leases signed during the period, total 137 62 151 Total area of leases signed, sg.m. 16,601 7,076 16,399 Occupancy rate at the end of period, % 97.6 97.6 97.6 Average length of lease portfolio at the end of period, years 2.8 3.1 3.0 Supermarkets and shops Number of leases signed during the period, total 45 22 51 Total area of leases signed, sg.m. 17,702 5,308 9,806 Occupancy rate at the end of period, % 96.5 96.6 96.8 Average length of lease portfolio at the end of period, years 4.4 4.6 4.4 Rental income The net rental income of Citycon's leasing business during the period totalled EUR 30.7 million (EUR 27.1 million). The average net rental yield of the properties owned by the company was 8.5 per cent (8.4%). Shopping centres accounted for 54.9 per cent of the net rental income (49.6%) and supermarkets and shops accounted for 45.1 per cent (50.4%). Of net income, roughly 47.4 per cent was generated by properties in the Helsinki Metropolitan Area, 34.2 per cent by properties in other major Finnish cities, and roughly 18.4 per cent by other properties in Finland. TREND IN RENTAL INCOME BY DIVISION 1-6 2003 1-6 2002 1-12 2003 Shopping centres Gross rental income, EUR million 23.0 17.9 36.5 Net rental income, EUR million 16.8 13.4 27.5 Net rental yield, % *7.9 7.9 *8.1 *Figures include uncompleted projects Supermarkets and shops Gross rental income, EUR million 18.3 18.2 36.5 Net rental income, EUR million 13.9 13.6 27.2 Net rental yield, % 9,2 8.9 8.9 Investments and development projects Citycon's gross investments amounted to EUR 12.7 million (EUR 0.9 million). Gross investments include the acquisition of a new shopping centre, Torikeskus in Seinäjoki, for EUR 7.1 million, and EUR 5.6 million for business development projects. The Shopping Centres Division's property portfolio grew on 1 March 2004 with Torikeskus in Seinäjoki, one of the foremost shopping centres in the Southern Ostrobothnia region. During the second quarter, Citycon continued work on an extension to the IsoKarhu shopping centre in Pori. The extension will be completed in the third quarter and will have a positive effect on income during the fourth quarter of the year. Refurbishment at the Jyväskeskus shopping centre in Jyväskylä was completed in May 2004, which gave rental income an immediate boost. The combined total of the investments in IsoKarhu and Jyväskeskus is roughly EUR 12.0 million. The Shopping Centres Division also continued the planning for extensions at the Lippulaiva and Espoontori shopping centres in Espoo, the Myyrmanni shopping centre in Vantaa, and the Koskikeskus shopping centre in Tampere. The Supermarkets and Shops Division invested EUR 0.2 million in a property on Laajavuorenkuja in Vantaa during the second quarter, which will boost rental income in the third quarter. The division continued a revamp of the Länsikeskus property in Espoo and the development of a shopping centre in the Hervanta district of Tampere. The Property Development Division continued the planning of development projects for Citycon's retail sites together with the other divisions as well as investigating the commercial framework for new shopping centres in the Helsinki Metropolitan Area and in the Tampere and Turku market zones. Divestments During the period, Citycon sold in accordance with its strategy three (3) properties belonging to the Supermarkets and Shops Division. The combined balance sheet value of the properties sold was EUR 0.6 million and the capital gains were EUR 0.1 million EUR. Turnover and profit During the period, Citycon's turnover increased to EUR 44.1 million (EUR 38.7 million). Operating profit increased to EUR 24.5 million (EUR 21.6 million). The increase was largely due to the acquisitions of shopping centres at the end of 2003 and in the first quarter of 2004. Gross rental income accounted for 93,6 per cent (93,4 %) of turnover. Balance sheet and financing The Group's financing situation remained good during the period. The balance sheet total was EUR 834.2 million (EUR 742.7 million), of which cash and cash equivalents were EUR 4.8 million (EUR 12.1 million). At the end of the period, Citycon had a total of EUR 460.9 million (EUR 381.7 million) of liabilities. Interest-bearing liabilities increased by EUR 5.7 million during the period to EUR 517.7 million (EUR 440.3 million), when the capital loan of EUR 68.5 million (EUR 68.5 million) was included in the figure. The average interest rate for interest-bearing liabilities during the period was 5.2 per cent (5.4 %). The average loan period, weighted according to the principals of the loans, was roughly 4.1 years (5.0 years), and the average interest-rate fixing period was 3.9 years (4.4 years). Citycon's interest-bearing liabilities included 86.5 per cent of floating rate loans, of which 77.6 per cent has been converted to a fixed rate by means of interest rate swaps and 12.3 per cent has been hedged with interest rate caps. The par value of the interest rate swaps at the end of the period was EUR 340.8 million and that of the interest rate caps was EUR 53.8 million. The interest coverage ratio, the previous twelve months' profit before interest expenses, taxes and depreciation to net financial expenses was 2.1 (2.1). The Group's equity ratio was 44.5 per cent (48.3%). If the capital loan is not included in shareholders' equity, the equity ratio was 36.2 per cent (39.1%). Net financial expenses rose to EUR 12.9 million (EUR 11.7 million). Citycon and IFRS Citycon Oyj is to go over to reporting in accordance with IAS/IFRS standards (International Financial Reporting Standards) in its interim reports and financial statements in 2005. The company made decisions on the main optional accounting principles in IFRS at the beginning of 2004 and examined the effect of the adoption of IFRS on its accounting principles in its financial statements bulletin released on 12 February 2004. Citycon will issue further information on the effect of the IAS/IFRS standards in a separate bulletin on 31 August 2004. Personnel At the end of the period, the Citycon Group had a total of 41 (36) employees, of whom 31 (29) were employed by the parent company. Shares and shareholders Citycon's share capital as at 30 June 2004 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. Traded volume and price During the period, the total for Citycon shares traded on the Helsinki Exchanges was 94.0 million shares and EUR 176.2 million. The high price quoted during the period was EUR 2.15 and the low was EUR 1.52. The weighted average price for the period was EUR 1.87 and the closing price of the period was EUR 2.04. The company's market capitalisation at the end of the period was EUR 207.9 million (EUR 110.1 million), after deducting the portion of treasury shares from the total. Shareholdings At the end of the period, Citycon had a total of 1,268 registered shareholders. The registered shareholders held 60.2 million shares, so they had 56.9 per cent of the shares and voting rights. Nominee-registered shareholders had 45.6 million shares, which is 43.1 per cent of the number of shares and voting rights. Treasury shares and the shareholdings of the Board of Directors and the management The number of treasury shares remained the same during the period, at 3,874,000 shares, which is the equivalent of 3.7 per cent of the company's total shares and voting rights. The total purchase price of the shares was EUR 4.7 million. The book value of treasury shares on 30 June 2004 corresponded to their purchase price, which was lower than their market value at the end of period. The effect of treasury shares has been deducted for the calculation of the key figures. The members of Citycon Oyj's Board of Directors held a total of 66,453 shares on 30 June 2004, which was 0.06 per cent of the company's total shares and voting rights. Citycon's CEO held 100,000 shares and 1,650,000 stock options as well as the other members of the Corporate Management Committee held a total of 3,000 shares and 971,670 stock options on 30 June 2004. Citycon in international investors' comparative indexes Citycon is included in international property investment companies' indexes. The EPRA/NAREIT Global Real Estate Index and the GPR 250 Property Securities Index serve as comparative indexes for international investors. Authorisations and stock options and the use thereof Citycon's annual general meeting of 15 March 2004 authorised the Board of Directors to decide whether to increase the share capital by means of a new issues of shares and to decide on the acquisition and conveyance of treasury shares. The authorisations will be valid for one year following the decision made by the AGM. At the end of the review period, no part of the authorisations had been utilised. Citycon Oyj decided on 16 April 2004 to apply for the listing of the 1999 A/B warrants on the main list of the Helsinki Exchanges. The warrants have been included on the main list of the Helsinki Exchanges since 23 April 2004. The details of the listing of the warrants can be found in the stock exchange bulletin issued by Citycon on 16 April 2004. The annual general meeting of 15 March 2004 decided on issuing stock options to personnel of Citycon Oyj and of its subsidiaries and to a wholly owned subsidiary of Citycon Oyj as part of the Group's personnel incentive and commitment system. Citycon's Board of Directors decided on 26 May 2004 on the distribution of stock options in accordance with the decision of the annual general meeting. A total of 1,135,000 2004A stock options were distributed to the personnel of the Group. The rest of the stock options 2,765,000 (A/B/C) were granted to Veniamo-Invest Oy, a subsidiary of Citycon Oyj, to be further distributed to the present and future personnel of the Group. The complete terms of the stock options issued by the annual general meeting can be found in the stock exchange bulletin issued by the company on 26 May 2004. Events after the end of the review period An extraordinary general meeting of the company held on 10 August 2004 decided, in accordance with a proposal from the Board of Directors' Nomination Committee, to increase the number of the Board members from seven to eight within the limits set in the company's articles of association. In addition, the extraordinary general meeting decided to augment the Board's expertise in the international property business by electing American citizen Dor Segal on a proposal from the Nomination Committee. Segal is the President and CEO of First Capital Realty Inc. and the President of Gazit-Globe (1982) Ltd. His membership will be in effect until the next annual general meeting. Outlook for the future Citycon forecasts that demand, occupancy rates and rents for its retail premises will remain good in the Helsinki Metropolitan Area and Finland's major cities. Citycon estimates that turnover and profit for the current year will grow due to favourable market view, combined with the shopping centres acquired at the end of 2003 and the beginning of 2004. Helsinki, 11 August 2004 Citycon Oyj Board of Directors CONSOLIDATED INCOME STATEMENT, EUR million 1-6 2004 1-6 2003 1-12 2003 Turnover 44.1 38.7 78.1 Other income 0.1 -0.1 -0.5 Expenses Materials and services 11.7 9.2 18.7 Salaries and social expenses 1.4 1.3 2.6 Depreciation and impairments 3.8 3.2 6.5 Rents and maintenance charges 1.5 2.1 4.1 Share of associated companies' profit 0.2 0.2 0.4 Other expenses of business operations 1.1 0.9 1.9 Expenses, total 19.7 16.9 34.3 Operating profit 24.5 21.6 43.3 Financial income and expenses -12.9 -11.7 -24.2 Profit before extraordinary items and taxes 11.6 9.9 19.1 Taxes -3.3 -2.7 -4.9 Profit 8.4 7.1 14.3 CONSOLIDATED BALANCE SHEET, EUR million Assets Non-current assets Intangible assets 4.8 4.1 4.5 Tangible assets 740.0 621.3 729.1 Investments Holdings in associated companies 55.4 74.9 55.5 Treasury shares 4.7 4.2 4.7 Other investments 21.4 22.3 23.1 Investments, total 81.5 101.4 83.3 Non-current assets, total 826.3 726.8 816.9 Current assets Short-term receivables 3.1 3.7 3.4 Cash and cash equivalents 4.8 12.1 15.1 Current assets, total 7.9 15.8 18.5 Assets, total 834.2 742.7 835.3 Liabilities and shareholders' equity Shareholders' equity Share capital 142.8 142.8 142.8 Share premium fund 28.3 28.3 28,3 Treasury share reserve 4.7 4.2 4.7 Other funds 6.6 6.6 6.6 Retained profits 13.0 13.0 13.0 Profit 8.4 7.1 14.3 Capital loan 68.5 68.5 68.5 Shareholders' equity, total 272.1 270.4 278.0 Minority interest 101.2 90.6 99.8 Liabilities Long-term liabilities 426.5 371.7 428.3 Short-term liabilities 34.4 10.0 29.2 Liabilities, total 460.9 381.7 457.5 Liabilities and shareholders' equity, total 834.2 742.7 835.3 Gross investment in non- current assets 12.7 0.9 84.2 % of turnover 28.9 2.4 107.9 Depreciations and impairments 3.8 3.2 6.5 Personnel, average 40 33 33 CASH FLOW STATEMENT, EUR million 1-6 2004 1-6 2003 1-12 2003 Operating activities Profit before extraordinary items 11.6 9.9 19.1 Adjustments: Depreciation 3.8 3.2 6.5 Financial income and expenses 12.9 11.7 24.2 Other adjustments 0.1 0.3 0.9 Cash flow before change in working capital 28.4 25.1 50.8 Change in working capital 0.4 1.2 0.0 Cash flow from operating activities before financial items and taxes 28.8 26.3 50.7 Interest paid and payments for other financial expenses of operating activities -15.6 -14.5 -24.1 Dividend and interest received from business operations 0.4 0.2 0.5 Taxes paid -2.3 -2.2 -4.7 Cash flow from operating activities 11.4 9.8 22.4 Investing activities Investments in tangible and intangible assets -6.2 -0.7 -4.9 Shares in subsidiaries purchased -7.6 0.0 -77.1 Shares in subsidiaries sold 0.7 0.2 1.4 Shares in associated companies purchased 0.0 -0.2 -0.8 Shares in associated companies sold 0.0 0.5 1.6 Other items 0.0 0.1 0.1 Cash flow from investing activities -13.1 -0.1 -79.7 Financial activities Withdrawals of short-term loans 8.1 2.1 Withdrawals of long-term loans 4.9 67.9 Repayments of long-term loans -7.3 -0.2 -0.2 Dividend paid and other distribution of profit -14.3 -9.2 -9.2 Cash flow from financial activities -8.6 -9.3 60.6 Increase in cash and cash Equivalents -10.3 0.4 3.3 Cash and cash equivalents at the beginning of period 15.1 11.7 11.7 Cash and cash equivalents at the end of period 4.8 12.2 15.1 KEY FINANCIAL FIGURES 1-6 2004 1-6 2003 1-12 2003 Earnings per share, EUR 0.08 0.07 0.14 Equity per share, EUR 1.95 1.94 2.01 Return on equity (ROE), % 8.5 7.3 7.1 Return on equity including minority interest, % 5.6 5.0 4.9 Return on investment(ROI), % 6.1 6.0 5.8 Equity ratio, % 44.5 48.3 44.9 Equity ratio with capital loan not counted as part of shareholders' equity, % 36.2 39.1 36.7 TREASURY SHARES 1-6 2004 1-6 2003 1-12 2003 Acquired between 25 November 1999 and 31 March 2004 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, EUR million 4.7 4.7 4.7 The book value of treasury shares on 30 June 2004 corresponded to the purchase price, which was lower than market value at the end of period. The value/number of treasury shares are deducted from shareholders' equity and the number of shares for the calculation of the key figures. CONSOLIDATED CONTINGENT LIABILITIES, EUR million Mortgages on land and buildings 362.3 337.2 338.4 Group company shares pledged 76.9 78,4 Other pledged shares 76.8 97.0 76.7 Other pledges given 0.6 1.4 3.2 GROUP'S DERIVATIVES, EUR million 30 June 2004 30 June 2003 30 Dec 2003 Par values Par values Par values Interest-rate derivatives Interest-rate swaps Maturing in 2004 50.0 Maturing in 2007 78.2 78.2 78.2 Maturing in 2008 50.0 50.0 Maturing in 2009 129.6 66.0 91.0 Maturing in 2010 83.0 83.0 83.0 Total 340.8 277.2 302.2 Interest-rate options Interest-rate caps purchased Maturing in 2004 53.8 53.8 53.8 Total 53.8 53.8 53.8 GROUP'S DERIVATIVES, EUR million 30 June 2004 30 June 2003 31 Dec 2003 Fair values Fair values Fair values Interest-rate derivatives Interest-rate swaps Maturing in 2004 -1.7 Maturing in 2007 0.6 -0.3 1.1 Maturing in 2008 -1.3 -1.3 Maturing in 2009 -5.0 -7.4 -5.4 Maturing in 2010 -5.5 -8.7 -5.8 Total -11.1 -18.1 -11.4 Interest-rate options Interest-rate caps purchased Maturing in 2004 0.0 0.0 0.0 Total 0.0 0.0 0.0 The fair values for derivatives describe their value if all agreements had been closed at the market price of the end of period. Derivatives have been used for hedging the loan portfolio. The accrued interest for the period included in the derivatives' fair values, being EUR 0.8 million (EUR 0.4 million) has been booked in interest expenses. The taxes correspond to the profit of the period. The figures are unaudited. ACCOUNTING PRINCIPLES Accounting principles applied in the annual financial statements as of 31 December 2003 are applied in these financial statements. FINANCIAL REPORTING Citycon Oyj will publish its interim report for January-September on 21 October 2004. Further information for investors can be seen on Citycon's website, www.citycon.fi Press conference The company will hold a press conference and briefing for analysts today, Wednesday 11 August 2004, starting at 2 p.m. at Citycon Oyj's business premises at Pohjoisesplanadi 35 AB. CEO Petri Olkinuora will report on business and profit during the review period and on the outlook for the future. The presentation material will be available after the conference on Citycon's website. Further information CEO Petri Olkinuora Tel. +358 9 6803 6738 or +358 400 333 256 Petri.olkinuora@citycon.fi CFO Pirkko Salminen Tel. +358 9 6803 6730 or +358 50 3022 485 pirkko.salminen@citycon.fi Distribution Helsinki Exchanges Main media www.citycon.fi Independent Auditors' Review Report to the Board of Directors of Citycon Oyj We have reviewed the consolidated balance sheet of Citycon Oyj as of June 30, 2004, the related consolidated statements of operations for the six-month period ended June 30, 2004, and the related consolidated statements of cash flows for the three-month period ended June 30, 2004, which are included in the Company's interim report. These consolidated financial statements are the responsibility of the Board of Directors and the company's management. We conducted our review in accordance with the International Standard on Auditing applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A 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 reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Accounting Act and other rules and regulations governing the preparation of interim financial statements in Finland. Helsinki, August 11, 2004 Ari Ahti Jaakko Nyman Authorized Public Accountant Authorized Public Accountant

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