Citycon Oyj's Interim Report for 1 January-30 September 2008
CITYCON OYJ Stock Exchange Release 16 October 2008 at 9.00 hrs
Summary of the Third Quarter of 2008 Compared with the Previous
- Turnover grew by 0.8 per cent to EUR 44.6 million (Q2/2008: EUR
- Net rental income grew by 3.2 per cent to EUR 31.5 million (EUR
30.5 million), resulting from lower maintenance and repair expenses
and from turnover growth.
- Net cash from operating activities per share was lower than in the
previous quarter at EUR 0.02 (EUR 0.06) due mainly to timing
differences relating to working capital and interest payments.
- Earnings per share were EUR -0.21 (EUR -0.26).
- Direct result per share (diluted) improved and was EUR 0.05 (EUR
- The fair value change of investment properties was EUR
-70.8 million (EUR -84.7 million). The fair market value of
investment properties decreased to EUR 2,094.4 million (EUR 2,156.9
- The average net yield requirement for investment properties was 6.2
per cent (6.0%) at the end of the period, according to an external
appraiser. The increase in the net yield requirement was due to
changes in the market conditions.
- The company's net financial expenses increased due to higher
interest rates and debt level and totalled EUR 16.1 million (EUR 14.7
million). The period's net financial expenses include EUR 0.6 million
(EUR 0.2 million gain) one-off, non-cash expense resulting from the
quarterly valuation of the company's interest rate hedging contracts,
mainly due to the decline of long-term interest rates.
Summary of the Reporting Period 1 January - 30 September 2008
Compared with the Corresponding Period of 2007
- The company's total liquidity at the end of the reporting period
was EUR 310.7 million including unutilised committed long-term debt
facilities amounting to EUR 292.0 million and cash of EUR 18.7
million. The available liquidity will cover the authorised
investments and scheduled debt service payments at least until the
end of 2010 without the need for additional financial sources.
- Turnover grew by 23.1 per cent to EUR 133.1 million (Q1-3/2007: EUR
108.1 million), due mainly to both property acquisitions made during
2007 and active retail property management.
- Profit/loss before taxes was EUR -121.4 million (EUR 243.5
million), including a EUR -154.1 million change (EUR 212.7 million)
in the fair value of investment properties.
- The company's direct result rose to EUR 29.3 million
(EUR 22.5 million), up mainly because of increased net rental income,
decreased administrative expenses and lower taxes compared to the
reference period. Changes in the fair value of the company's property
portfolio have no effect on the company's net rental income or direct
result, but they will affect the company's total profit.
- Direct result per share (diluted) was EUR 0.14 (EUR 0.12).
- Earnings per share amounted to EUR -0.42 (EUR 0.99). The decrease
resulted mainly from the fair value changes.
- Net rental income increased by 20.1 per cent, to EUR 91.6 million
(EUR 76.3 million).
- Net rental income from like-for-like properties rose by
1.8 per cent.
- Net cash flow from operating activities per share was steady at EUR
0.14 (EUR 0.14).
- The equity ratio was 40.3 per cent (41.2 %).
- Citycon signed three long-term loan agreements on competitive
CEO Petri Olkinuora comments on the reporting period:
"Citycon's turnover and net rental income continued to grow during
the reporting period, and the company's direct result improved.
Meanwhile, the value of properties decreased due to changes in market
conditions. During the reporting period, Citycon focused on
maintaining a strong cash flow and on active retail property
Taking into account the current volatility in the international
financial markets, the company's current financial standing provides
an adequate basis for business development and for the completion of
the ongoing development and redevelopment projects.
The first stage of the Rocca al Mare shopping centre extension and
redevelopment project was opened on 1 October ahead of schedule, and
the new premises are fully let. Citycon acquired Rocca al Mare in
2005 with the objective of making it the largest shopping centre in
Tallinn. Once the project is fully finalised, we will have achieved
this goal. At the same time, Rocca al Mare will become Citycon's
largest shopping centre measured by retail space.
The Rocca al Mare project is one of the company's three pilot
projects in sustainable construction. We will continue to employ
sustainable construction practices in our other projects in
accordance with the company strategy."
Citycon continues to focus on increasing net operating income and
cash flow. Seeking to implement its strategy, the company will focus
on developing and redeveloping its shopping centres while cautiously
monitoring the market for potential acquisitions.
Citycon is considering the divestment of its non-core properties such
as its residential properties in Sweden. To ensure the long term
growth of Citycon, the company will consider alternative financial
structures such as joint ventures.
In 2008, the company expects its year-on-year net rental income and
direct profit excluding fair value changes to increase. This estimate
is based on expansion and redevelopment projects in progress, on
further improvements in shopping centre management, and on property
portfolio growth due to completed acquisitions.
Helsinki, 15 October 2008
Board of Directors
The entire report with tables in pdf-format can be downloaded from
the link below.
Financial Statements and Financial Statements Bulletin 2008
Citycon will publish its financial statements and a financial
statements bulletin for the financial year 1 January to 31 December
2008 on Thursday, 12 February 2009 at approximately 9:00 a.m.
More information for investors is available at Citycon's website,
For further information, please contact:
Mr Petri Olkinuora, CEO
Tel. +358 9 6803 6738 or +358 400 333 256
Mr Eero Sihvonen, CFO
Tel. +358 9 6803 6730 or +358 400 557 9137
NASDAQ OMX Helsinki
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.