CITYCON OYJ Stock Exchange Release 26 April 2007 at 12.45 hrs
CITYCON OYJ Stock Exchange Release 26 April 2007
at 12.45 hrs
Citycon's Interim Report for 1 January-31 March 2007
Summary
- Turnover rose by 25.6 per cent, to EUR 34.2 million (Q1/2006: EUR
27.3 million), due mainly to property acquisitions.
- Profit before taxes was EUR 40.9 million (EUR 24.9 million),
including a EUR 31.5 million (EUR 15.5 million) increase in the fair
value of investment properties.
- The market value of the company's property portfolio rose by 46.3
per cent, to EUR 1,546.9 million (EUR 1,057.6 million).
- Reported net rental income increased by 19.6 per cent, to EUR 23.2
million (EUR 19.4 million).
- Earnings per share amounted to EUR 0.18 (EUR 0.12).
- Earnings per share excluding the effects of fair value changes,
gains on sale and other non-recurring items were EUR 0.04 (EUR 0.05),
difference mainly due to higher number of shares, divestiture of
non-core properties, increased development activity and costs related
to increased business activities.
- Per-share net asset value (EPRA NAV) grew to EUR 3.69 (EUR 2.48).
- According to an external appraiser, the average net yield
requirement for investment properties stood at 6.5 per cent on 31
March 2007.
- Equity ratio rose to 45.5 per cent (33.8 per cent).
- The company carried out a successful directed share issue worth EUR
133.8 million by issuing 25,000,000 new shares.
- The period-end market capitalisation totalled EUR 1,126.7 million
(EUR 563.7 million).
- During the reporting period, Citycon decided on two major
development projects, totalling roughly EUR 178 million.
- The company also continued implementing its growth strategy by
acquiring the Tumba Centrum shopping centre in the municipality of
Botkyrka, south of Stockholm, and the Hansa property within the Trio
shopping centre in Lahti. The company invested a total of EUR 78.6
million in new properties.
Key Figures
1-3 2007 1-3 2006 Change 1-12 2006
Turnover, EUR million 34.2 27.3 25.6% 119.4
Operating profit, EUR million 50.4 31.9 58.0% 196.5
% of turnover 147.1 117.0 - 164.6
Profit before taxes, EUR million 40.9 24.9 64.5% 165.6
Profit attributable to parent
company shareholders, EUR million 33.0 18.1 82.2% 124.9
Fair market value of investment
properties, EUR million 1,546.9 1,057.6 46.3% 1,447.9
Earnings per share (basic), EUR 0.18 0.12 47.3% 0.78
Earnings per share (diluted),
EUR (EPRA EPS) 0.17 0.12 36.2% 0.74
Earnings per share (basic),
excluding
the effects of changes in fair
value,
gains on sale and other
extraordinary
items, EUR 0.04 0.05 -18.1% 0.20
Net cash from operating activities
per share, EUR 0.05 0.10 -46.6% 0.20
Equity per share, EUR (EPRA NAV) 3.69 2.48 49.0% 3.38
EPRA NNNAV 3.43 2.50 37.4% 3.22
Equity ratio, % 45.5 33.8 - 39.1
Gearing, % 105.5 178.9 - 136.6
Net interest-bearing debt
(fair value), EUR million 783.3 652.3 20.1% 811.2
Net rental yield, % 6.9 8.3 - 7.6
Occupancy rate, % 96.7 96.7 - 97.1
Personnel (at the end of the
period) 89 59 50.8% 73
*) Change-% is based on exact figures.
CEO Petri Olkinuora:"Citycon continued implementing its growth strategy and reported a
good operating performance. The share issue carried out during the
reporting period maintained the company's strong balance sheet and
provided foundations for the implementation of development projects
and for new shopping centre acquisitions.
During the period, Citycon acquired new properties and launched major
development projects. In Sweden, the Liljeholmen shopping-centre
project represents the company's largest single development project
so far. In Estonia, the extension of Rocca al Mare will fortify
Citycon's position in one of the company's significant growth
regions. In Finland, the purchase of shares in MREC Kiinteistö Oy
Lahden Hansa will enable the redevelopment of the Trio shopping
centre in Lahti on a more extensive basis while supporting Citycon's
leading market position in Finland.
Competition for retail properties in the company's operating regions
has remained tough, also resulting in clear increase in property
prices. Consequently, the company will in the future increasingly
implement its growth strategy by investing in the development and
extension of its existing properties and therefore property
development and redevelopment will play an even more important role
in Citycon's business. In addition to projects currently underway,
the company is planning or examining development projects in all of
its business areas.
Thanks to its new organisation restructured in late 2006, the company
can allocate more resources to the commercial management, development
and refurbishment of its retail properties. The Swedish
organisation's new management took up its duties at the beginning of
2007 and Citycon also reinforced its Finnish organisation. These
investments in the organisation will enable the company to continue
its growth during 2007."
Business Environment
In the first quarter, demand for retail premises remained good in
Citycon's operating regions in Finland, Sweden and the Baltic
countries and occupancy rates remained high.
Recent years have seen continued GDP growth in Finland and Sweden,
with consumer spending and the retail sector in particular showing
vigorous development. The steady labour market and higher disposable
income have supported consumer confidence while interest and
inflation rates have remained modest, supporting growth.
Investor interest in retail properties has remained strong in all of
the company's operating regions. Since competition for offered
investment properties has remained tough, yield requirements for
properties have fallen and property prices have risen. Property
market liquidity has remained at a good level and the company's
operating regions have plenty of investment properties that are, or
will soon be, on sale.
Business and Property Portfolio in Summary
Specialising in shopping centres and other large retail units,
Citycon is a property investment company operating in Finland, Sweden
and the Baltic countries. As the market leader in the Finnish
shopping centre business, Citycon has considerably extended its
operations role in Sweden and established a foothold in the Baltic
countries. Citycon's core competence lies in acquisition management
and the development and redevelopment of shopping centres
On 31 March 2007, Citycon owned 28 (22) shopping centres and 52 (133)
other retail properties and the market value of its property
portfolio totalled EUR 1,546.9 million, Finnish properties accounting
for 67.7 per cent (83.8 per cent), Swedish properties for 26.8 per
cent (10.4 per cent) and properties in the Baltic countries for 5.5
per cent (5.8 per cent). At the end of the period, the gross leasable
area (GLA) totalled 776,345 square metres.
Changes in Property Portfolio Fair Value
Citycon measures its investment property at fair value, under IAS 40,
according to which changes in its fair value are recognised through
profit or loss. Using International Valuation Standards (IVS), an
external professional appraiser conducts the valuation of the
company's property at least once a year. 2007 will see quarterly
valuations by an external appraiser, due to the active market. A
Property Valuation Statement on the March-end status, prepared by
Aberdeen Property Investors Finland Oy, can be found at
www.citycon.fi.
During the reporting period, the fair value of Citycon's property
portfolio rose by EUR 31.5 million, as a result of changes in general
market conditions and the leasing business. The period saw a total
fair value increase of EUR 35.2 million and a total decrease of EUR
3.7 million.
The average net yield requirement defined by Aberdeen Property
Investors Finland Oy for Citycon's property portfolio fell to 6.5 per
cent, due mainly to the very active property market.
Lease Portfolio and Occupancy Rate
On 31 March 2007, Citycon had a total of 3,387 (2,327) leases. The
length of the leases averaged 2.9 (3.0) years. On the same date, the
occupancy rate for the company's property portfolio stood at 96.7 per
cent (96.7 per cent) and net rental yield at 6.9 per cent (8.3 per
cent).
Reported net rental income increased by 19.6 per cent, to EUR 23.2
million, and the gross leasable area (GLA) grew by 18.3 per cent, to
777,000 square metres. Net rental income for like-for-like properties
rose by 12.2 per cent. Like-for-like properties refer to properties
held by Citycon throughout the 24-month reference period, excluding
properties under development and expansion as well as lots.
The calculation method for net yield and standing (like-for-like)
investments is based on the guidelines issued by the KTI Institute
for Real Estate Economics and the Investment Property Databank (IPD).
Lease portfolio summary
1-3 2007 1-3 2006 1-12 2006
Number of leases started
during the period 114 122 369
Total area of leases
started, sq.m. 17,960 39,465 73,300
Occupancy rate at end
of the period ,% 96.7 96.7 97.1
Average length of lease
portfolio at the end of the period, year 2.9 3.0 2.9
Development Projects
Maintaining its properties as attractive and dynamic centres for
shopping in the eyes of both customers and lessees forms the key
element in Citycon's business. The table below shows a list of the
most significant development projects in progress, approved by the
Board of Directors. In addition, Citycon is planning and preparing a
number of other development projects. More information on projects
under planning can be found in the Annual Report 2006 published in
March 2007 and available at www.citycon.fi.
Property Location Total Actual capital Estimated
estimated expenditure year of
capital by the end of completion
expenditure period (EUR
(EUR million) million)
Lippulaiva Espoo, Finland 60-70 1) 7.6 2008
Trio Lahti, Finland 50.5 2.0 2009
Duo Tampere, 27.3 19.1 2007
Finland
Lentola Kangasala, 16.6 - 2007
Finland
Kaarina Kaarina, 8.2 - 2007
Finland
Torikeskus Seinäjoki, 4 1.1 2008
Finland
Åkersberga Österåker, 40 2) 3.8 2009
Sweden
Liljeholmen Stockholm, 110 4.8 2009
Sweden
Rocca al Mare Tallinn, 68 3) 0.6 2010
Estonia
1) Both planned stages included in the figure.
2) Citycon owns 75 per cent of the Åkersberga shopping centre and
accounts for around EUR 27 million of capital expenditure on its
development.
3) All three planned stages included in the figure.
Some of these projects will still require Board approvals.
Business Areas
Citycon reorganised its operations towards the end of 2006 by
introducing a geographically based regional organisation instead of
the former divisions based on property types (Shopping Centres,
Supermarkets and Shops, and Property Development). This new regional
organisation divides the company's operations into three business
areas, Finland, Sweden and the Baltic countries, which are further
divided into Retail Properties and Property Development.
Finland
Citycon is the market leader in the shopping-centre business in
Finland. Reported net rental income rose by 3.3 per cent, to EUR 17.5
million while net rental income for like-for-like properties
increased by 12.2 per cent. Finland accounted for 75.5 per cent of
Citycon's total net rental income.
Lease portfolio summary
1-3 2007 1-3 2006 1-12 2006
Number of leases started
during the period 106 113 321
Total area of leases started, sq.m. 16,900 37,466 66,500
Occupancy rate at end
of the period ,% 96.4 96.3 97.2
Average length of lease
portfolio at the end of the period, year 3.2 3.1 3.1
Financial performance, Finland
1-3 2007 1-3 2006 Change 1-12 2006
Turnover, EUR million 23.9 23.3 2.4% 95.8
Net fair value gains on investment
property, EUR million 14.0 14.9 -6.3% 104.8
Operating profit, EUR million 30.2 30.7 -1.8% 176.1
Gross rental income, EUR million 23.3 22.7 2.4% 93.1
Net rental income, EUR million 17.5 16.9 3.3% 68.8
Net rental yield, % 7.3 8.5 - 7.6
Net rental yield, like-for-like
properties, % 7.9 8.6 - 7.9
Market value of property
portfolio,
EUR million 1,046.6 886.5 18.1% 1,009.7
Capital expenditure. EUR million 22.9 51.3 -55.4% 152.8
During the reporting period, Citycon acquired all shares in MREC
Kiinteistö Oy Lahden Hansa, adjacent to the Trio shopping centre in
Lahti, at a debt-free price of EUR 17.0 million. The acquired
property is an integral part of Trio, currently being refurbished by
Citycon, and its acquisition will enable the company to develop the
shopping centre on a more comprehensive basis. Hansa's gross leasable
area totals roughly 11,000 square metres. As a result of this
acquisition, Citycon is almost the sole owner of the Trio shopping
centre, the gross leasable area in its possession increasing to
46,000 square metres. In addition, the company made several smaller
investments during the period when it purchased shares in shopping
centres from minority shareholders, such as in Isomyyri in Vantaa and
in Heikintori in Tapiola, Espoo.
Citycon's newest shopping centre, called Duo, will be completed in
the planned schedule and the grand opening of the extension will take
place on 26 April 2007. The gross leasable area of the centre totals
15,500 square metres consisting of the Hervanta retail centre (5,200
sq.m.) and the now opening new construction (10,300 sq.m.).
Refurbishment of the older part will be completed in autumn 2007.
The largest-scale shopping-centre development projects in Finland
include the extension and refurbishment of Trio in Lahti and
Lippulaiva in Espoo. The autumn of 2006 saw the completion of
Lippulaiva's refurbishment and the extension work included in the
second stage will begin as soon as the related alteration to the city
plan becomes legally valid, approximately in the summer of 2007.
In addition, the company has commissioned the building of a new
retail centre in Kaarina, some five kilometres from downtown Turku
and in Lentola, Kangasala, near Tampere, both due for completion in
the autumn of 2007, and is refurbishing Torikeskus shopping centre in
Seinäjoki.
New acquisitions carried out in Finland during the reporting period
were worth a total of EUR 18.8 million (EUR 48.6 million), while
development investments totalled EUR 4.0 million (EUR 2.7 million).
On 31 March 2007, Citycon owned 19 (18) shopping centres and 46 (127)
other retail properties in Finland.
Sweden
In 2006, Citycon made heavy investments in expanding its business in
Sweden by acquiring several properties. This also necessitated
reinforcing the Swedish organisation, and the new management took up
their duties in early 2007. Citycon's net rental income grew by 206.8
per cent, to EUR 4.4 million. Sweden accounted for 19.0 per cent of
the company's total net rental income.
Lease portfolio summary
1-3 2007 1-3 2006 1-12 2006
Number of leases started
during the period 3 1 32
Total area of leases started, sq.m. 270 107 3,900
Occupancy rate at end
of the period ,% 97.2 98.2 96.3
Average length of lease
portfolio at the end of the period, year 1.9 2.5 2.2
Financial performance, Sweden
1-3 2007 1-3 2006 Change 1-12 2006
Turnover, EUR million 8.6 2.6 224.0% 17.3
Net fair value gains on
investment
property, EUR million 15.1 -0.1 NA 8.7
Operating profit, EUR million 18.8 1.0 1,691.9% 16.8
Gross rental income, EUR million 7.9 2.4 235.0% 15.9
Net rental income, EUR million 4.4 1.4 206.8% 9.3
Net rental yield, % 5.9 4.9 - 5.2
Net rental yield, like-for-like
properties, %
Market value of property
portfolio, EUR million 414.8 109.9 277.4% 354.8
Capital expenditure, EUR million 61.7 33.3 85.2% 267.2
Pursuant to an agreement signed in December 2006, Citycon acquired
all shares in Tumba Centrumfastigheter AB in late January. The
acquired company owns Tumba Centrum, a shopping centre in the
municipality of Botkyrka, south of Stockholm. The property's
debt-free purchase price amounted to SEK 547.7 million (approx. EUR
60.5 million). Including not only retail premises but also apartments
and office premises, which is typical of shopping centres in Sweden,
the property has a gross leasable area of around 31,000 square
metres, some 18,600 square meters of which are retail premises. As
Citycon's thirteenth property purchase in Sweden, the acquisition of
Tumba Centrum will strengthen the company's market position in the
shopping-centre sector in Sweden and the Greater Stockholm Area.
In early February, Citycon announced that it would begin to build a
shopping centre in Liljeholmen in Stockholm. The project investment
totals around EUR 110 million, in addition to the EUR 60.6 million
paid for the property, representing Citycon's largest-ever
development project. Acquired by Citycon in August 2006, the
Liljeholmen property currently comprises an office and commercial
building of around 20,000 square metres with building rights for
additional retail premises. Citycon will considerably extend and
modernise the existing building. Citycon will build a new shopping
centre with area totalling roughly 91,000 square metres, including
the future underground car park, and the new shopping centre will
open its doors in or around October-November 2009.
In the Greater Stockholm Area, Citycon is also modernising and
extending the Åkersberga shopping centre. This project involves
extending the shopping centre by approximately 9,000 square metres in
leasable area, modernising the existing premises, and developing the
shopping centre's service structure.
In Sweden, reported capital expenditure totalled roughly EUR 61.7
million, of which new acquisitions and development investments
accounted for EUR 59.7 million (EUR 32.9 million) and EUR 1.9 million
(EUR 0.3million), respectively. On 31 March 2007, Citycon owned 7 (3)
shopping centres and 6 (6) other retail properties in Sweden.
Baltic Countries
Citycon owns two shopping centres in the Baltic region: Rocca al Mare
in Tallinn, Estonia, and Mandarinas in Vilnius, Lithuania. Due to the
limited size of the Baltic market, competition and the limited
availability of suitable properties, Citycon has been cautious with
investments in the region. However, the company is continuously
looking for potential investment opportunities. Citycon's net rental
income grew by 32.1 per cent, to EUR 1.3 million. The Baltic
Countries accounted for 5.7 per cent of the company's total net
rental income.
Lease portfolio summary
1-3 2007 1-3 2006 1-12 2006
Number of leases started
during the period 5 8 16
Total area of leases started, sq.m. 790 1,892 2,900
Occupancy rate at end of
the period ,% 100.0 100.0 100.0
Average length of lease
portfolio at the end of the period, year 3.2 3.2 3.3
Financial performance, Baltic
Countries
1-3 2007 1-3 2006 Change 1-12 2006
Turnover, EUR million 1.8 1.3 40.3% 6.2
Net fair value gains on investment
property, EUR million 2.4 0.7 230.5% 6.6
Operating profit, EUR million 3.5 1.6 117.2% 10.9
Gross rental income, EUR million 1.6 1.0 51.5% 6.1
Net rental income, EUR million 1.3 1.0 32.1% 4.8
Net rental yield, % 7.7 8.7 - 8.4
Net rental yield, like-for-like
properties, %
Market value of property
portfolio, EUR million 85.6 61.2 39.9% 83.3
Capital expenditure, EUR million 0.3 - - 16.2
In early February, Citycon announced that it would begin to extend
the Rocca al Mare shopping centre, acquired in the summer of 2005.
When Citycon acquired Rocca al Mare, it identified the potential for
remarkable extension of the shopping centre. The project involves
both extension of the centre and refurbishing the existing property.
Its first stage investment is worth a total of some EUR 25 million,
increasing the gross leasable area by around 16,000 square metres,
while the project investment, covering several stages, totals an
estimated EUR 68 million.
The first stage of the construction project has begun and is
projected to be completed in the spring of 2008. According to plan, a
fully refurbished Rocca al Mare should open in the spring of 2010.
During the three months ended 31 March 2007, the development
investments amounted to EUR 0.3 million (EUR 0.0 million) in Rocca al
Mare.
Turnover and Profit
Turnover for the period came to EUR 34.2 million (EUR 27.3 million),
mainly comprising of the rental income generated by Citycon's retail
properties, of which gross rental income accounted for 95.7 per cent
(95.9 per cent).
Operating profit rose to EUR 50.4 million (EUR 31.9 million). Profit
before tax came to EUR 40.9 million (EUR 24.9 million) and profit
after tax was EUR 34.6 million (EUR 18.9 million). The increase in
operating profit was chiefly due to changes in the fair value of the
property portfolio, and the operating profit generated by the
acquired properties.
The effect of investment property fair value gains, gains on the sale
of investment property and other non-recurring items, including the
related tax effect, on the profit for the period attributable to
parent company shareholders came to EUR 25.8 million (EUR 11.0
million). Taking this into account, the reported profit attributable
to parent company shareholders after tax is EUR 0.1 million above the
Q1/2006 level.
Earnings per share were EUR 0.18 (EUR 0.12). Earnings per share
excluding fair value gains, capital gains on investment property,
other non-recurring items and the resulting tax effects were EUR 0.04
(EUR 0.05).
Net cash flow from operating activities per share amounted to EUR
0.05 (EUR 0.10). The reduction in the net cash from operating
activities was due to exceptional tax return in the previous year and
timing issues like changes in working capital 2007.
Human Resources and Administrative Expenses
On 31 March 2007, Citycon Group had a total of 89 (59) employees, 66
of whom worked in Finland, 17 in Sweden, five in Estonia and one in
Lithuania. Administrative expenses grew to EUR 4.3 million (EUR 3.2
million), including EUR 0.2 million (EUR 0.2 million) in share-based,
non-cash expenses related to employee stock options. Higher expenses
were attributable to expanded company operations and expenses
resulting from the creation of the new regional organisation, as well
as the increase in expert fees and other expenses related to property
acquisitions.
Capital Expenditure
Reported gross capital expenditure totalled EUR 84.9 million (EUR
84.5 million), of which property acquisitions accounted for EUR 78.6
million (EUR 81.5 million), property development for EUR 6.2 million
(EUR 3.0 million) and other investments for EUR 0.1 million (EUR 0.0
million).
These investments were mainly financed with the proceeds from the EUR
133.8 million share issue carried out in February.
Balance Sheet and Financial Position
The period-end balance sheet total stood at EUR 1,594.4 million (EUR
1,077.8 million), and liabilities totalled EUR 869.0 million (EUR
713.2 million), with short-term liabilities accounting for EUR 137.4
million (EUR 134.8 million). The Group's financial position remained
at a healthy level throughout the reporting period.
Year-on-year, reported interest-bearing debt increased by EUR 121.5
million, to EUR 786.2 million (EUR 664.6 million). The fair value of
Group interest-bearing debt stood at EUR 804.1 million (EUR 664.6
million) while cash and cash equivalents came to EUR 20.8 million
(EUR 12.3 million), resulting in EUR 783.3 million (EUR 652.3
million) in the fair value of net interest-bearing debt.
The interest rate of interest-bearing debt averaged 4.56 per cent
(4.42 per cent). The average loan maturity, weighted according to
loan principals, extended to 4.6 years (2.6 years) while the average
time to fixing lengthened to 3.9 years (2.1 years). On 31 March 2007,
the interest rate of interest-bearing debt, interest-rate swaps
included, averaged 4.65 per cent.
The Group's equity ratio increased clearly, and rose to 45.5 per cent
(33.8 per cent). The interest coverage ratio (the previous 12 months'
profit before interest expenses, taxes and depreciation relative to
net financial expenses) was 2.2.
Period-end gearing was 105.5 per cent (178.9 per cent). The directed
share issue carried out during the period and good financial
performance pulled down gearing.
Citycon's period-end interest-bearing debt included 76.7 per cent
(89.2 per cent) of floating-rate loans, of which 79.1 per cent (56.7
per cent) had been converted to fixed-rate ones by means of
interest-rate swaps. Fixed-rate debt accounted for 84.0 per cent of
the Group's period-end interest-bearing debt, the interest-rate swaps
included. On 31 March 2007, the nominal amount of derivative
contracts was EUR 586.1 million (EUR 376.5 million) while the fair
value stood at EUR 3.6 million (-EUR 8.1 million).
Citycon applies hedge accounting, whereby changes in the fair value
of interest-rate swaps subject to hedge accounting are recognised
under equity. The period-end nominal value of interest-rate swaps
totalled EUR 537.9 million (EUR 376.5 million), with hedge accounting
applied to interest-rate swaps whose nominal value amounted to EUR
487.9 million (EUR 376.5 million).
Net financial expenses increased by EUR 2.4 million, to EUR 9.5
million (EUR 7.0 million), due mainly to higher interest-bearing debt
and reported expenses resulting from an option on convertible bonds.
Net financial expenses shown in the income statement include EUR 0.4
million (EUR 0.0 million) in non-cash expenses related to the option
component on convertible bonds.
Directed Share Issue
Citycon strengthened its balance sheet by a directed share issue in
February. The issue of new shares was based on the authorisation by
the Extraordinary General Meeting of 26 January 2007. The new shares
were offered to subscription to Finnish and international
institutional investors in a directed issue, waving the shareholders'
pre-emptive rights, and was carried out in an accelerated
book-building process between 12 February and 13 February 2007. A
total of 25 million new shares were offered for subscription at a
per-share price of EUR 5.35.
On the basis of bids received during the book-building process, on 13
February 2007 the Board of Directors decided to issue 25 million new
shares. On 15 February 2007, the share capital increase of EUR
33,750,000.00, corresponding to the number of shares subscribed in
the issue, was registered in the Trade Register. These new shares
entitle their holders to a dividend as of the financial year starting
on 1 January 2007. As a result of the share issue, the company's
registered and fully paid-up share capital increased to EUR
259,570,510.20 and the number of shares to 192,274,452. The new
shares offered for subscription represented around 14.9 per cent of
Citycon's share capital before the share issue and 13.0 per cent
after it.
After arrangement fees, the amount of net proceeds raised in the
share issue totalled approximately EUR 132.2 million, which the
company intends to use on financing investments in line with its
investment strategy.
More detailed information on the directed share issue can be found in
Citycon's stock exchange releases published in February and available
on the company's website at www.citycon.fi.
Annual General Meeting 2007
Citycon Oyj's Annual General Meeting (AGM), held in Helsinki on 14
March 2007, adopted the parent company's and consolidated financial
statements for 2006 and discharged the Board of Directors and the CEO
from liability. It decided that a per-share dividend of EUR 0.14 be
paid for the financial year 2006. The dividend record date was 16
March 2007 and the dividend payment date 23 March 2007. In addition,
the AGM authorised the Board to issue a maximum of 100 million new
shares or special rights entitling to shares and approved the Board
of Directors' proposals for partial amendments to the Articles of
Association and the terms and conditions of the company's stock
option schemes.
Board of Directors and Board remuneration
With the number of Board members remaining at eight, the AGM
re-elected the following Board members for a one-year term: Gideon
Bolotowsky, Amir Gal, Raimo Korpinen, Tuomo Lähdesmäki, Carl G.
Nordman, Claes Ottosson, Dor J. Segal and Thom Wernink. Thom Wernink
was re-elected Board Chairman and Tuomo Lähdesmäki Deputy Chairman.
The AGM decided that the Board Chairman, Deputy Chairman and ordinary
Board members be paid an annual remuneration of EUR 150,000, EUR
60,000 and EUR 35,000, respectively. It also decided that the Board
Chairman and the Chairman of each Board committee receive a meeting
fee of EUR 600 and other Board and Board committee members EUR 400
for each meeting.
Independence of Board members
In the Board of Directors' view, all Board members are independent of
the company as non-executive directors and Gideon Bolotowsky, Raimo
Korpinen, Tuomo Lähdesmäki, Carl G. Nordman and Thom Wernink are
independent of major shareholders.
Auditor
The AGM re-elected Ernst & Young Oy, a firm of authorised public
accountants, the company's auditor for the financial year 2007, with
Tuija Korpelainen, Authorised Public Accountant, acting as the chief
auditor, as notified by Ernst & Young Oy.
Amendments to the Articles of Association and the terms and
conditions of stock options
The AGM approved the proposed amendments to the Articles of
Association, resulting mainly from the new Finnish Companies Act,
registered in the Trade Register on 30 March 2007. The most
significant amendments to the Articles of Association included
deleting provisions governing the company's minimum and maximum share
capital and the share's nominal value. As a result of the abolition
of the share's nominal value, the AGM also decided to remove
references to the share's nominal value from the terms and conditions
of the 1999 and 2004 stock option schemes. In addition, the AGM
decided to add a reference to the stock option schemes, stating that
the share subscription price must always be at least EUR 1.35 and
that the share subscription price must be recognised under the
invested unrestricted equity fund.
The amended Articles of Association and stock option terms and
conditions can be found at www.citycon.fi.
Board authorisations
The AGM authorised the Board of Directors to decide on issuing new
shares and disposing of treasury shares held by the company, through
a rights or a free share issue. The company may issue new shares and
transfer its treasury shares to its shareholders in proportion to
their current shareholdings in the company or, waiving the
shareholders' pre-emptive right, through a directed share issue, if
the company has a weighty financial reason for doing so. The Board
may also decide on a bonus issue to the company itself. In addition,
the AGM authorised the Board of Directors to grant special rights, as
referred to in Chapter 10, Section 1 of the Companies Act, entitling
their holders to receive, against payment, new company shares or
treasury shares held by the company. The combined number of new
shares to be issued and treasury shares to be transferred, including
the shares granted on the basis of the special rights, may not exceed
100 million. These authorisations are valid for five years from the
date of the AGM.
Share Capital and Shares
At the beginning of 2007, Citycon Oyj's registered share capital
totalled EUR 225.7 million and the number of shares 167.2 million.
During the reporting period, the company increased its share capital
by EUR 33.9 million and 25.1 million shares, as a result of share
subscriptions based on a directed share issue and stock options. The
table below shows the changes in share capital in more detail. The
company's period-end registered share capital amounted to EUR 259.6
and the number of shares totalled 192.3 million. The company has a
single series of shares, with each share entitling its holder to one
vote at the shareholders' meeting. The shares have no nominal value.
Changes in share capital between 1 January and 31 March 2007
Date Reason Change, EUR Change in Share capital, Number of
2007 no. of EUR shares
shares
1 Jan. 225,697,293.00 167,183,180
9 Feb. Increase 123,217.20 91,272 225,820,510.20 167,274,452
(stock
options)
15 Feb. Increase 33,750,000.00 25,000,000 259,570,510.20 192,274,452
directed
share
issue)
31 259,570,510.20 192,274,452
March
Notification of changes in ownership
After the directed share issue, Citycon received a notification from
Fidelity International Limited, whereby Fidelity International
Limited informed that its and its direct and indirect subsidiaries'
shareholding in Citycon Oyj fell below ten (10) per cent, as a result
of the increase of the company's share capital. Accordingly, on 14
February 2007 Fidelity International Limited and its direct and
indirect subsidiaries held a total of 17,297,574 Citycon shares,
accounting for nine per cent of the company's fully paid share
capital and votes.
Stock Options
Citycon has two option schemes, the 1999 A/B/C scheme and the 2004
A/B/C scheme. These stock option schemes form part of Citycon Group's
employee incentive and motivation programme. The stock options 1999
and 2004 A are listed on the Helsinki Stock Exchange.The tables below shows basic information on the stock option schemes.
+----------------------------------------------------------------+
| Stock options | 1999 A | 1999 B | 1999 C |
|----------------+---------------+---------------+---------------|
| Distributed | 1,800,000 | 1,800,000 | 1,727,500 |
| stock options, | | | |
| No | | | |
|----------------+---------------+---------------+---------------|
| ¹) Held by | | | 172,500 |
| Veniamo- | | | |
| Invest Oy, No | | | |
|----------------+---------------+---------------+---------------|
| Subscription | 1:1.0927 | 1:1.0927 | 1:1.0927 |
| ratio, stock | | | |
| option/share | | | |
|----------------+---------------+---------------+---------------|
| Subscription | 1.35 | 1.35 | 1.35 |
| price/share, | | | |
| EUR | | | |
|----------------+---------------+---------------+---------------|
| Share | 1 Sept. 2000 | 1 Sept. 2002 | 1 Sept. 2004 |
| subscription | | | |
| period starts | | | |
|----------------+---------------+---------------+---------------|
| Share | 30 Sept. 2007 | 30 Sept. 2007 | 30 Sept. 2007 |
| subscription | | | |
| period ends | | | |
+----------------------------------------------------------------+
+----------------------------------------------------------------+
| Stock options | 2004 A | 2004 B | 2004 C |
|----------------+---------------+---------------+---------------|
| Distributed | 1,040,000 | 1,090,000 | 1,250,000 |
| stock options, | | | |
| No | | | |
|----------------+---------------+---------------+---------------|
| ¹) Held by | 260,000 | 210,000 | 50,000 |
| Veniamo- | | | |
| Invest Oy, No | | | |
|----------------+---------------+---------------+---------------|
| Subscription | 1:1.0611 | 1:1.0611 | 1:1.0611 |
| ratio, stock | | | |
| option/share | | | |
|----------------+---------------+---------------+---------------|
| Subscription | 2.1636 (² | 2.6066 (² | 4.55 (² |
| price/share, | | | |
| EUR | | | |
|----------------+---------------+---------------+---------------|
| Share | 1 Sept. 2006 | 1 Sept. 2007 | 1 Sept. 2008 |
| subscription | | | |
| period starts | | | |
|----------------+---------------+---------------+---------------|
| Share | 31 March 2009 | 31 March 2010 | 31 March 2011 |
| subscription | | | |
| period ends | | | |
+----------------------------------------------------------------+
¹) Veniamo-Invest Oy has no right to subscribe for its parent
company's shares.
²) After dividend distribution for 2006. The subscription price will
be reduced by half of the amount of annual dividends paid. However,
the share subscription price will always amount to at least EUR 1.35.
At the end of December 2006, a total of 91,272 new shares were
subscribed on the basis of Citycon's 1999 and 2004 stock options. On
9 February 2007, the share capital increase, EUR 123,217.20,
corresponding to these share subscriptions, was registered in the
Trade Register. The number of shares subscribed on the basis of the
1999 A/B/C stock options totalled 63,525 at a per-share subscription
price of EUR 1.35 and that on the basis of the 2004 A stock options
27,747 at a per-share subscription price of EUR 2.2336. In
January-March, the company did not receive any new share
subscriptions based on the option rights.
Since company shares no longer bear any nominal value and the AGM
amended the stock options' terms and conditions in such a way that
the share subscription price of shares subscribed on the basis of
stock options would be recognised under the invested unrestricted
equity fund, the company's share capital will no longer increase as a
result of share subscriptions based on stock options.
Pages 34-36 of the Financial Statements Appendix to the Annual Report
2006 provide more detailed information on the company's stock option
schemes.
Near-term Risks and Uncertainties
Citycon estimates that major near-term risks and uncertainties are
associated with economic development in the company's operating
regions, future fair value changes of investment properties and
changes in interest rates. A marked increase in interest rates,
reduction in fair value of investment properties or a substantial
economic slowdown in Finland, Sweden or the Baltic countries could
have an adverse effect on Citycon's business and financial
performance.
Outlook
Citycon will remain active in seeking acquisition and development
opportunities while implementing its expansion strategy, despite
toughening competition in the property market. The company expects
that development and redevelopment projects will play a growing role
in its business during 2007. Citycon estimates that its operating
profit, excluding fair value changes and gain on sale on investment
properties, will grow in 2007. This outlook is based on expected
growth in the company's leasable area, resulting from major
acquisitions carried out and development projects planned and
underway, as well as estimated net rental income generated by these
premises.
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS 31 MARCH 2007
Condensed Consolidated Income Statement, IFRS
EUR million Note 1-3 2007 1-3 2006 Change 1-12 2006
Gross rental income 32.8 26.1 25.4% 115.1
Service charge income 1.5 1.1 32.3% 4.2
Turnover 3 34.2 27.3 25.6% 119.4
Property operating
expenses 11.1 7.8 41.4% 36.0
Other expenses from
leasing
operations 0.0 0.0 -127.0% 0.6
Net rental income 23.2 19.4 19.6% 82.8
Administrative expenses 4.3 3.2 33.6% 12.9
Other operating income
and expenses 0.0 0.2 -81.0% 0.6
Net fair value gains on
investment property 31.5 15.5 102.9% 120.1
Net gains on sale of
investment
property - - - 5.9
Operating profit 50.4 31.9 58.0% 196.5
Net financial income
and expenses 9.5 7.0 34.7% 30.9
Profit before taxes 40.9 24.9 64.5% 165.6
Current taxes -1.4 -1.4 0.2% -7.4
Change in deferred taxes -4.8 -4.6 6.4% -31.8
Profit for the period 34.6 18.9 83.5% 126.4
Attributable to
Parent company
shareholders 33.0 18.1 82.2% 124.9
Minority interest 1.6 0.8 114.9% 1.5
Earnings per share (basic),
EUR 0.18 0.12 47.3% 0.78
Earnings per share
(diluted), EUR 0.17 0.12 36.2% 0.74
Condensed Consolidated Balance Sheet, IFRS
EUR million Note 31 March 2007 31 March 2006 31 Dec. 2006
Assets
Non-current assets
Investment property 4 1,546.9 1,057.6 1,447.9
Development property 5 5.7 - -
Other property, plant
and equipment 0.8 0.5 0.6
Derivative financial
instruments
and other non-current
assets 7 7.0 0.3 4.8
Total non-current
assets 1,560.4 1,058.5 1,453.3
Current assets
Derivative financial
instruments 7 0.4 - 0.4
Trade and other
receivables 12.9 7.0 11.3
Cash and cash
equivalents 6 20.8 12.3 21.3
Total current assets 34.0 19.4 33.1
Total assets 1,594.4 1,077.8 1,486.4
Liabilities and Shareholders' Equity
Equity attributable to parent
company shareholders
Share capital 259.6 185.1 225.7
Share issue - - 0.1
Share premium fund
and other restricted reserves 131.1 78.9 131.1
Fair value reserve 7 0.5 -6.0 -1.3
Invested unrestricted
equity funds 98.9 - -
Retained earnings 219.1 102.3 209.7
Total equity attributable to parent
company shareholders 709.2 360.3 565.3
Minority interest 16.2 4.3 15.0
Total shareholders' equity 725.4 364.6 580.3
Liabilities
Interest-bearing liabilities 682.3 558.5 726.3
Derivative financial
instruments and other
non-interest bearing liabilities 7 3.8 8.1 4.9
Deferred tax liabilities 45.5 11.9 40.4
Total long-term liabilities 731.6 578.5 771.7
Interest-bearing liabilities 103.9 106.2 87.6
Trade and other payables 33.5 28.6 46.8
Short-term liabilities 137.4 134.8 134.4
Total liabilities 869.0 713.2 906.1
Total liabilities and
shareholders' equity 1,594.4 1,077.8 1,486.4
Condensed Consolidated Statement of Changes in Shareholders' Equity,
IFRS
EUR million
Equity attributable to parent company
shareholders
Share
premium Invested
fund unrest-
Fair ricted
Share Share and other value equity Retained
capital issue reserves reserve funds earnings
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
Share
subscriptions
based on stock
options 1.0 -1.1 0.0
Dividends (Note
8) -6.6 -12.6
Share-based
payment 0.2
Balance at 31 March
2006 185.1 - 78.9 -6.0 - 102.3
Balance at 1 Jan.
2007 225.7 0.1 131.1 -1.3 - 209.7
Cash flow hedges 1.8
Profit for the
period 33.0
Total recognized
income and expense
for the period 1.8 33.0
Change in share
capital 33.8 98.9
Share
subscriptions
based on stock
options 0.1 -0.1 0.0
Dividends (Note
8) -23.4
Translation
differences -0.4
Share-based
payment 0.2
Balance at 31 March
2007 259.6 0.0 131.1 0.5 98.9 219.1
Equity
attributable to
parent
company Minority Shareholders'
shareholders interest equity, total
Balance at 1 Jan. 2006 356.6 3.6 360.2
Cash flow hedges 4.5 4.5
Profit for the period 18.1 0.8 18.9
Total recognized
income and expense
for the period 22.7 0.8 23.4
Share subscriptions
based on stock
options 0.0 0.0
Dividends (Note 8) -19.2 -19.2
Share-based
payment 0.2 0.2
Balance at
31 March 2006 360.3 4.3 364.6
Balance at 1 Jan. 2007 565.3 15.0 580.3
Cash flow hedges 1.8 1.8
Profit for the period 33.0 1.6 34.6
Total recognized
income and expense
for the period 34.8 1.6 36.4
Change in share
capital 132.6 132.6
Share subscriptions
based on stock
options 0.0 0.0
Dividends (Note 8) -23.4 -23.4
Translation
differences -0.4 -0.4 -0.8
Share-based
payment 0.2 0.2
Balance at 31 March
2007 709.2 16.2 725.4
Condensed Consolidated Cash Flow Statement, IFRS
EUR million Note 1-3 2007 1-3 2006 1-12 2006
Cash flow from operating
activities
Profit before taxes 40.9 24.9 165.6
Adjustments -21.7 -8.7 -94.0
Cash flow before change
in working capital 19.2 16.2 71.6
Change in working capital -5.1 -1.3 -0.5
Cash generated from operations 14.1 14.9 71.1
Paid interest and other
financial charges -4.4 -1.9 -34.1
Received interest and
other financial income 1.4 0.0 0.9
Taxes paid -1.6 1.5 -5.9
Net cash from operating activities 9.6 14.5 32.0
Cash flow from investing activities
Acquisition of subsidiaries,
less cash acquired -96.9 -46.5 -331.8
Acquisition of investment property 4 - -32.1 -33.6
Capital expenditure on investment
properties 4 -5.7 -5.9 -35.6
Capital expenditure on
development properties,
other PP&E and intangible assets 5 -1.2 - -
Sale of investment property - - 73.9
Net cash used in investing
activities -103.9 -84.4 -327.1
Cash flow from financing activities
Proceeds from share issue 132.2 - 77.4
Proceeds from short-term loans 36.2 101.0 421.2
Repayments of short-term loans -19.9 -36.0 -392.2
Proceeds from long-term loans 60.9 30.0 675.3
Repayments of long-term loans -96.0 -10.8 -461.8
Dividends paid 8 -19.3 -17.5 -19.2
Net cash from/used in financing
activities 94.1 66.7 300.8
Net change in cash and cash
equivalents -0.2 -3.2 5.7
Cash and cash equivalents at
period-start 6 21.3 15.6 15.6
Effects of exchange rate changes -0.3 - -
Cash and cash equivalents at
period-end 6 20.8 12.3 21.3
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basic company data
Citycon is a real estate company investing in retail premises.
Citycon operates mainly in Finland, Sweden and the Baltic countries.
Citycon is a Finnish, public limited company established under
Finnish law and domiciled in Helsinki. The Board of Directors
approved the interim financial statements on 26 April 2007.
2. Basis of preparation and accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the three
months ended 31 March 2007 have been prepared in accordance with IAS
34 Interim Financial Reporting. The interim financial statements do
not include all the disclosures required in the annual financial
statements. Therefore, they should be read in conjunction with
Citycon's annual financial statements for the year ended 2006.
Accounting policies
Citycon changed its accounting policies related to IAS 23 Borrowing
Costs -standard as of 1 January 2007 and started to apply an
alternative treatment allowed by IAS 23. The standard allows that the
borrowing costs such as interest expenses and arrangement fees are
capitalised as part of the cost of development properties.
Otherwise, the accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those applied in the preparation of Citycon's annual financial
statements for the year ended 31 December 2006.
Acquisitions in the balance sheet
Tumba Centrumfastigheter AB was acquired in January 2007. The
identifiable assets and liabilities of Tumba Centrumfastigheter AB,
corresponding to the shares acquired, have been recognized at
preliminary value in the company's balance sheet.
Reporting to Gazit-Globe Ltd.
The company's main shareholder, Gazit-Globe Ltd, holding
approximately 38.9 per cent of the shares in the company, has
announced that it will start applying International Financial
Reporting Standards (IFRS) in its financial reporting in 2007.
According to IFRS one company may exercise a controlling interest in
another company even if its shareholding in that company does not
exceed 50 per cent. Gazit-Globe Ltd. holds the view that it exercises
controlling interest, as defined in IFRS, in Citycon Oyj based on the
fact that it has been able to exercise controlling interest in
Citycon Oyj's shareholders' meetings pursuant to its shareholding. In
accordance with an agreement concluded between the companies, Citycon
Oyj will provide Gazit-Globe Ltd. with a more detailed breakdown of
the accounting information it discloses in its interim and full-year
reports so that Gazit-Globe Ltd. can consolidate Citycon Group
figures into its own IFRS financial statements.
3. Segment Information
Citycon's business consists of the regional business areas Finland,
Sweden and the Baltic Countries.
EUR million 1-3 2007 1-3 2006 Change 1-12 2006
Turnover
Finland 23.9 23.3 2.4 % 95.8
Sweden 8.6 2.6 224.0 % 17.3
Baltic Countries 1.8 1.3 40.3 % 6.2
Total 34.2 27.3 25.6 % 119.4
Operating profit
Finland 30.2 30.7 -1.8 % 176.1
Sweden 18.8 1.0 1691.9 % 16.8
Baltic Countries 3.5 1.6 117.2 % 10.9
Other -2.1 -1.5 38.6 % -7.2
Total 50.4 31.9 58.0 % 196.5
EUR million 31 March 2007 31 Dec. 2006
Assets
Finland 1,053.5 1,016.6
Sweden 418.3 358.0
Baltic Countries 85.9 83.6
Other 36.7 28.2
Total 1,594.4 1,486.4
The significant increase in segment assets for Sweden is due to the
acquisition of a shopping centre Tumba Centrum.
4. Investment property
EUR million 31 March 2007 31 March 2006 31 Dec. 2006
At period-start 1 447.9 956.6 956.6
Additions 84.8 85.5 436.2
Disposals - - -67.9
Transfer into the
development properties -5.7 - -
Net fair value gains 31.5 15.5 120.1
Exchange differences -11.6 - 2.9
At period-end 1546.9 1057.6 1447.9
An external professional appraiser has conducted the valuation of the
company's properties with a net rental income based cash flow
analysis. Market rents, occupancy rate, operating expenses and yield
requirement form the key variables used in the cash flow analysis.
The segments' yield requirements used by the external appraiser in
the cash flow analysis were as follows at 31 March 2007 and 31
December 2006:
Yield requirement (%) 31 March 2007 31 Dec. 2006
Finland 6.5 6.6
Sweden 6.2 6.4
Baltic Countries 6.8 7.1
Average 6.5 6.6
5. Development property
When Citycon redevelops its existing investment properties, the
properties remain as the investment properties in the balance sheet,
and they are measured based on fair value model in accordance with
IAS 40. The significant development projects, in which a new building
or significant extension is constructed, are exceptions and they are
treated in accordance with IAS 16 Property, Plant and Equipment
standard. The significant extension projects are presented separately
from the property, plant and equipment in the balance sheet based on
the recommendations of the European Public Real Estate Association
(EPRA). As at 31 March 2007, the development properties consisted of
the capital expenditure relating to extension projects in Rocca al
Mare, Åkerbserga and Liljeholmen shopping centres. Investments in
development properties during the three months ended 31 March 2007
amounted to EUR 1.2 million (EUR 0.0 million) and the development
property in the balance sheet totalled EUR 5.7 million at 31 March
2007.
6. Cash and cash equivalents
Me 31 March 2007 31 March 2006 31 Dec. 2006
Cash in hand and at bank 20.6 9.8 19.4
Restricted cash in hand
and at bank - 1.0 -
Short-term deposits 0.2 1.5 1.9
Total 20.8 12.3 21.3
7. Derivative Financial Instruments
EUR million 31 March 2007 31 March 2006 31 Dec. 2006
Nominal Fair Nominal Fair Nominal Fair
amount value amount value amount value
Interest rate derivatives
Interest rate swaps
Maturity:
less than 1 year 50.0 0.4 78.2 0.5 50.0 0.4
1-2 years 40.0 0.1 50.0 -0.7 40.0 0.0
2-3 years 86.0 -1.5 145.3 -3.5 86.0 -2.6
3-4 years 83.0 -2.1 83.0 -4.4 83.0 -2.6
4-5 years 40.0 0.7 20.0 0.2 40.0 -0.8
over 5 years 238.9 5.8 0.0 0.0 242.7 3.8
Total 537.9 3.3 376.5 -8.1 541.7 -1.8
Foreign exchange
derivatives
Forward agreements
Maturity:
less than 1 year 48.1 0.3 0.0 0.0 14.8 0.0
Total 48.1 0.3 0.0 0.0 14.8 0.0
The fair value of derivative financial instruments represents the
market value of the instrument with prices prevailing on the balance
sheet date. Derivative financial instruments are used in hedging the
interest rate risk of the interest bearing debt and foreign currency
risk.
The fair values include foreign exchange gain of EUR 0.4 million (EUR
0.0 million) which is recognized in the income statement.
Hedge accounting is applied for interest rates swaps which have
nominal amount of EUR 487.9 million (EUR 376.5 million). The fair
value gain recognized in the fair value reserve under shareholders'
equity taking account the tax effect totals EUR 0.5 million (EUR -6.0
million).
8. Dividends
In accordance with the proposal by the Board of Directors and the
decision by the Annual General Meeting held on 13 March 2007 dividend
for the financial year 2006 amounted to EUR 0.14 per share (EUR 0.14
for the financial year 2005).
Dividends were paid on 23 March 2007. Tax at source relating to the
declared dividend was paid in April in 2006 and 2007.
EUR million 31 March 2007 31 March 2006
Dividends 23.4 19.2
Dividends paid 19.3 17.5
9. Contingent Liabilities
EUR million 31 March 2007 31 March 2006 31 Dec. 2006
Mortgages on land and
buildings 20.5 7.8 21.1
Bank guarantees 20.5 - 37.1
Capital commitments 57.6 - 40.7
At 31 March 2007 Citycon had capital commitments of EUR 57.6 million
relating to development projects.
10. Key Figures
1-3 2007 1-3 2006 Change 1-12 2006
Earnings per share (basic), EUR 0.18 0.12 47.3% 0.78
Earnings per share (diluted), EUR
(EPRA EPS) 0.17 0.12 36.2% 0.74
Equity per share, EUR (EPRA NAV) 3.69 2.48 49.0% 3.38
Equity ratio, % 45.5 33.8 - 39.1
The formulas for key figures can be found in the 2006 annual
financial statements.
The figures are unaudited.
Financial reports in 2007
In 2007, Citycon will publish another two interim reports as follows:
January-June 2007 on Friday, 20 July, at noon and
January-September 2007 on Thursday, 18 October, at noon.
For further information for investors, please visit Citycon's
website, www.citycon.fi.
Helsinki, 26 April 2007
Citycon Oyj
Board of Directors
For further information, please contact:
Mr Petri Olkinuora, CEO
Tel.: +358 9 6803 6738 or +358 400 333 256
petri.olkinuora@citycon.fi
Mr Eero Sihvonen, CFO
Tel.: +358 50 557 9137
eero.sihvonen@citycon.fi
Distribution:
Helsinki Stock Exchange
Major media
www.citycon.fi
Report on the general review of Citycon Oyj's interim report for the
period 1.1.-31.3.2007
We have generally reviewed the interim report of Citycon Oyj for the
period 1.1.-31.3.2007. 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
a.
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, April 26, 2007
Ernst & Young Oy
Tuija Korpelainen, Authorized Public Accountant