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 Quarter - 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 variations. - Net cash from operating activities per share was EUR 0.09 (EUR 0.10). - Earnings per share were EUR -0.03 (EUR -0.08). - Direct result per share (diluted) increased and was EUR 0.06 (EUR 0.05). - 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 (43.2%). - The second stage of the redevelopment project of the Rocca al Mare shopping centre in Tallinn, Fashion Gallery, was opened in May, fully leased. - 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 of 2008 - 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." Outlook 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 Citycon Oyj 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 website, 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 Distribution: NASDAQ OMX Helsinki Major media This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.