Citycon Oyj's Interim Report for 1 January - 30 June 2009
CITYCON OYJ Stock Exchange Release 17 July 2009 at 9:00 a.m.
Solid operational performance and lower financing costs
Summary of the Second Quarter of 2009 Compared with the Previous
- Turnover came to EUR 45.6 million and was at the same level as in
the previous quarter (Q1/2009: EUR 45.9 million).
- Net rental income increased by 2.3 per cent to EUR 31.0 million
(EUR 30.3 million) mainly due to lower property operating expenses
than in the previous quarter reflecting the common seasonal
- Net cash from operating activities per share was EUR 0.09 (EUR
- Earnings per share were EUR -0.03 (EUR -0.08).
- Direct result per share (diluted) increased and was EUR 0.06 (EUR
- The fair value change of investment properties was EUR -26.0
million (EUR -31.6 million). The fair market value of the investment
properties was EUR 2,104.5 million (EUR 2,097.3 million).
- The average net yield requirement for investment properties rose
and was 6.6 per cent (6.5%) at the end of the period, according to an
external appraiser. The increase in the net yield requirement was due
to general market conditions.
- Financial expenses totalled EUR 11.8 million (EUR 12.2 million),
decreasing due to lower interest rates. The previous quarter included
a one-off EUR 0.6 million gain from the buybacks of the company's
convertible bonds. The company booked a fair value gain of EUR 0.3
million related to derivative contracts in Q2 (Q1/2009: fair value
loss of EUR 0.3 million).
- Citycon's interest cover ratio covenant was 2.1x (2.0x) and equity
ratio covenant as defined in the loan agreements was 42.9 per cent
- The second stage of the redevelopment project of the Rocca al Mare
shopping centre in Tallinn, Fashion Gallery, was opened in May, fully
- The apartments under construction in Liljeholmen in Stockholm,
Sweden, were agreed to be sold for SEK 176 million (approx.
EUR 16.3 million).
Summary of January-June 2009 Compared with the Corresponding Period
- Turnover increased by 3.3 per cent to EUR 91.5 million (Q1-2/2008:
EUR 88.5 million), due to growth in gross leasable area, particularly
at Rocca al Mare, and development of retail properties. Turnover
growth was reduced by slightly higher vacancy.
- Profit/loss before taxes was EUR -28.7 million (EUR -62.1 million),
including a EUR -57.6 million (EUR -85.1 million) change in the fair
value of investment properties.
- Net rental income increased by 2.0 per cent to EUR 61.3 million
(EUR 60.1 million). If the impact of the weakened Swedish krona is
excluded, net rental income increased by 4.9 per cent.
- Net rental income from like-for-like properties rose by
2.1 per cent.
- The company's direct result rose to EUR 24.2 million
(EUR 20.6 million).
- Direct result per share (diluted) was EUR 0.11 (EUR 0.09).
- Earnings per share were EUR -0.11 (EUR -0.21). The fair value
changes of the investment properties have a significant impact on
earnings per share.
- The occupancy rate was 94.8 per cent (95.7%). The decrease in
occupancy rate resulted from the slightly increased vacancy across
the portfolio in all of Citycon's operating countries.
- Net cash from operating activities per share was EUR 0.19 (EUR
0.12). The increase was due mainly to non-recurring realized foreign
exchange rate gains, positive change of working capital as well as
lower financing costs.
- The equity ratio was 36.2 per cent (42.1%). This decrease resulted
mainly from the fair value changes of the investment properties and
higher debt due to investments.
- The company's financial position remained good during the period.
Total liquidity at the end of the reporting period was
EUR 242.5 million, including unutilised committed debt facilities
amounting to EUR 225.8 million and EUR 16.7 million in cash. The
available liquidity will cover the authorised investments and
scheduled debt interest and repayments until at least the end of
2010, without the need for additional financing.
CEO Petri Olkinuora's Comments on January-June 2009:
"Citycon continued its solid financial performance. The direct result
increased to EUR 24.2 million and the net cash flow from operating
activities was strong. Net rental income from like-for-like
properties grew 2.1 per cent during the period despite the
challenging market conditions. Occupancy rate decreased due to
decline of demand. Aggregate sales in all shopping centres were at
the previous year's level.
The company's key (re)development projects progressed according to
the plans and the second phase of the Rocca al Mare redevelopment
project was opened successfully in early May. The centre has been
well received by the shoppers and enjoys a good footfall. In June,
Citycon agreed to sell the apartments under construction in
Liljeholmen and shopping centre Trio in Lahti was granted the first
LEED-certificate in the Nordic countries.
Financial position remained good and the decrease in financial
expenses continued as a result of lower interest rates."
Citycon continues to focus on increasing its cash flow and operating
profit (excluding fair value changes). In order to implement this
strategy, the company will focus on value-added activities while
cautiously monitoring the market for potential acquisitions.
Due to market changes and tight financing conditions, the launch of
planned projects will be re-evaluated. Citycon intends to continue
the divestment of its non-core properties to improve the property
portfolio and strengthen the company's financial position. The
company is also considering alternative property financing sources.
The grocery sales sector, which accounts for a substantial share of
the company's lease portfolio, cushions the impact of rental
cyclicality in the company's business. The company expects its
full-year direct result and net cash from operating activities to
increase and net rental income to remain stable as a result of
redevelopment projects coming online, active shopping centre
management as well as lower interest rates.
Helsinki, 16 July 2009
Board of Directors
The entire report with tables in pdf-format can be downloaded from
the link below.
Financial reports in 2009
In 2009, Citycon will publish one more interim report as follows:
January-September 2009, on Thursday, 15 October 2009, at
approximately 9:00 a.m.
For further information for investors, please visit Citycon's
For further information, please contact:
Petri Olkinuora, CEO
Tel +358 20 766 4401 or +358 400 333 256
Eero Sihvonen, CFO
Tel +358 20 766 4459 or +358 50 557 9137
NASDAQ OMX Helsinki
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