Sponda Group recorded a net profit of EUR 93.4 (24.2) million for the first nine months of the year. Total revenue, which is derived from rental income, totalled EUR 75.1 (90.1) million. The operating profit was EUR 112.2 (57.7) million, which included a EUR 67 million capital gain on the sale of the Itäkeskus Shopping Mall. Earnings per share in the nine-month period were EUR 1.15 (0.30). Financial income and expenses totalled EUR -11.3 (-27.3) million.
Net operating income totalled EUR 56.6 (70.3) million, which was EUR 13.7 million below last year's figure. The Itäkeskus Shopping Mall accounted for EUR 12.7 million of the decrease in net operating income. The book value of Sponda's property portfolio was EUR 1 028.7 million. Shareholders' equity per share was EUR 6.98 (31 December 2001: EUR 6.12).
City-Center rezoning plan
Sponda submitted its rezoning plan for the City-Center block to the City of Helsinki on 20 September 2002 coinciding with publication of the Stockmann department store's investment plan. Both plans are part of the City's overall scheme to rejuvenate Helsinki city centre and their implementation will require the construction of a service tunnel financed by the City. Keskuskatu street will be turned into a pedestrian precinct and its existing access ramps for service traffic will be removed.
Sponda estimates the construction cost of the investment to total approximately EUR 100 million and to yield a return of 10 %. The construction period will be 2004-2007, during which lost rental income is estimated to total EUR 8.5 million.
Financing
Interest-bearing net debt totalled EUR 456.3 million (31 December 2002: EUR 680.9 million) and the equity ratio was 54.4 % (31 December 2001: 41.6 %). The average maturity of Sponda's credit lines was 3.5 years, the average interest rate was 5.10% and the average interest period was 2.2 years. Sponda had EUR 200 million in unused credit facilities.
Business conditions
The market for business premises in the Helsinki Metropolitan Area continued to stagnate. The vacancy rate for business premises throughout this area was 5.1%, and in Espoo 7.4%. Demand for retail and logistics premises remained stable and their vacancy rate stayed low. Rent levels have fallen also in properties in Helsinki city centre.
Leasing
Net operating income from Sponda's properties totalled EUR 56.6 (70.3) million, of which 51.8% was derived from Helsinki CBD, 17.5% from Helsinki Metropolitan Area, 18.9% from Logistics Properties and 11.8% from the rest of Finland. The economic occupancy rate of Sponda's entire property portfolio at the end of September was 89.5% (30 June 2002: 90.0%).
At the end of the reporting period the economic occupancy rate of Sponda's properties in Helsinki CBD was 91.0% (30 June 2002: 91.7%) and net operating income totalled EUR 29.3 million. The same figures for Sponda's other business areas were as follows: Helsinki Metropolitan Area 81.8% (81.9%)and EUR 9.9 million, Logistics Properties 92.0% (92.0%) and EUR 10.7 million, and Sponda's properties in the rest of Finland 94.9% (95.4%) and EUR 6.7 million.
Property acquisitions and sales
Sponda Plc did not acquire any properties during the third quarter of the year. In the full nine-month period Sponda purchased two office properties - Fabianinkatu 23 (5 100 m2) and Kaupintie 3, Lassila (54 800 m2) - from Sampo Oyj's subsidiary Sampo Liikekiinteistöt Oy (Sampo Business Properties) on 28 June 2002 for altogether EUR 79.5 million.
In the full nine-month period Sponda sold the Itäkeskus Shopping Mall to the Dutch property investment company Wereldhave N.V. for EUR 317 million in January.
Moreover, during 2002 Sponda has sold altogether 6 properties outside its core business for EUR 10.6 million.
During the third quarter Sponda sold a property in Hollola (Lahti), outside its core business, for EUR 1.7 million.
Personnel
The Sponda Group had 51 (54) employees on average between January and September 2002, which included 49 (46) employed by the parent company Sponda Plc. Personnel numbered 52 (53) at the close of the period, including 51 (46) in the parent company.
Group structure
Sponda Group comprises the parent company and its wholly owned subsidiaries. With the exception of Tamsoil Oy and Castrum Oyj, these are mutual property companies. The merger of Castrum Oy with the parent company Sponda Plc was approved by the registration authority and the merger will take effect on 31 December 2002.
Share performance
Sponda's share price in the third quarter was broadly similar to the price in the second quarter and the closing price at the end of September was EUR 5.40. The average price between January and September was EUR 5.54, the lowest price being EUR 4.48 and the highest price EUR 6.45. Sponda's market capitalization at the close of the period was EUR 438.2 million.
Purchase of own shares
By 30 September 2002 Sponda had purchased 321 200 of the company's own shares for EUR 1 819 191. The average price was EUR 5.66, the highest was EUR 6.00 and the lowest was EUR 5.40 per share. The aggregate nominal value of the shares was EUR 321 200 and they represented 0.40% of the share capital and votes.
Board of Directors
The following were elected to the Board of Directors by the Annual General Meeting on 27 March 2002: Heikki Bergholm, Maija-Liisa Friman, Jarmo Laiho, Harri Pynnä, Anssi Soila and Jarmo Väisänen. The Board elected Anssi Soila Chairman and Jarmo Väisänen Deputy Chairman.
Auditors
The meeting appointed Sixten Nymanin APA and KPMG Wideri Oy Ab as the company's auditors, and Ari Viitala APA as the deputy auditor.
Financial reports during 2003
Sponda will publish its 2002 financial statements bulletin on 6 February 2003. The Annual General Meeting has been reserved for 8 April 2003. The interim reports will be published on 8 May 2003, 7 August 2003 and 30 October 2003.
Prospects
24 October 2002
Sponda Plc
Board of Directors
The full Interim Report including tables is available to download from the enclosed link.
