Interim Report 1 Jan 30 Jun August 2008 Kari Inkinen, President and CEO Robert Öhman, CFO

Transcription

1 Interim Report 1 Jan 30 Jun August 2008 Kari Inkinen, President and CEO Robert Öhman, CFO

2 Financial review Market overview Operational review Business areas Appendix 2

3 Financial review Market overview Operational review Business areas Appendix 3

4 Key events Net operating income increased by 16 % in April-June to EUR 42.3 ( : 36.4) million. Equity ratio rose to 34 %. Economic occupancy rate was 91.1 % (30 Jun 2007: 89.8 %). Property development projects are progressing as planned, roughly EUR 93 million invested during January-June Sponda issued a hybrid bond for EUR 130 million in June After Q2 Sponda sold a hotel building for EUR 42 million in the centre of Helsinki. New office building was bought in centre of Moscow for USD 185 million. New property fund, Sponda Fund II, increased its portfolio to EUR 74 million. 4

5 Q2/2008 in focus 4-6/ / / / /07 Total revenue, meur Net operating income, meur Operating profit, meur Profit for the period, meur Earnings / share, eur Operating cash flow / share, eur Jun Jun Dec 07 Fair value of inv. properties, meur NAV / share, eur EPRA NAV / share, eur Economic occupancy rate, %

6 Profit & loss statement Me 4-6/ / / / /2007 Total revenue Expenses (15.0) (12.0) (28.7) (30.7) (58.1) Net operating income Profit on sale of inv. properties 0.9 (0.2) Valuation gain / loss (3.2) Profit on sale of trading properties SGA expenses (6.6) (8.1) (12.3) (15.4) (25.9) Other operating income/expenses (0.2) Operating profit Financial income and expenses (20.6) (13.4) (41.4) (38.7) (72.3) Profit before taxes Taxes from previous and current fin. years (0.2) - (0.1) - (0.4) Deferred taxes (2.4) (7.7) (9.4) (28.1) (47.4) Net income for the period

7 Valuation gains/losses on assessing Sponda properties at fair value 4-6/ /2008 Changes in yield requirements Profit from property development projects Modernization investments Change in market rents and maintenance costs Investment properties, total Real estate funds Group, total

8 Net Operating Income Me 45 40, ,4 36, ,1 38,2 42, , NOI Q4/2006 Q1/2007 Q2/2007 Q3/2007 Q4/2007 Q1/2008 Q2/2008 8

9 Balance sheet ASSETS meur meur meur Long-term assets Short-term assets Assets total SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity total Long-term liabilities Interest-bearing debt Liabilities Deferred tax liabilities Long-term liabilities total Short-term liabilities total Liabilities total Shareholders equity and liabilities

10 Financing Q2/2008 Q1/2008 Q4/2007 Q3/2007 Q2/2007 Equity ratio 34 % 30 % 32 % 35 % 35 % Average interest rate 4.7 % 4.5 % 4.6 % 4.5 % 4.5 % Hedging 69 % 61 % 65 % 78 % 87 % Average loan maturity 2.9 yrs 2.9 yrs 2.6 yrs 2.9 yrs 3.1 yrs Average fixed interest rate period 2.4 yrs 2.5 yrs 2.6 yrs 3.3 yrs 3.5 yrs Interest cover Loan to Value 62 % 10

11 Loan covenants % 3,0 40 2,5 35 2, ,5 1, % 25 Interest Cover Equity ratio 0,5 20 0,0 Q4/2006 Q1/2007 Q2/2007 Q3/2007 Q4/2007 Q12008 Q2/

12 Loan maturity % 6 % 3 % 30 % 25 %* 13 % 1 % 1 % Total amount of interestbearing debt EUR million Unused limits EUR 250 million. Undrawn, committed credit facility of EUR 150 million. * In total of EUR million of short-term loans matures in 2008, of which: CPs EUR million Bank loans EUR 15.1 million and Bonds EUR 137 million

13 Interest-bearing debt by type 30 June 2008 Interest-bearing debt EUR million 17 % 21 % Syndicate loans Syndicate loan limits Bonds 22 % 18 % Bank loans CPs 22 % 13

14 Prospects in 2008 Sponda forecasts: Its net operating income for 2008 to improve compared to last year. The economic occupancy rate in 2008 will remain at the year 2007 level due to the slower than expected rental development in Vuosaari harbour logistics centre. Earnings per share will improve in 2008 compared to 2007 if the effect of changes in fair value are eliminated from the figures. Cash flow from operations per share, including profits and losses on sales of properties, being slightly below the corresponding figure in

15 Financial review Market overview Operational review Business areas Appendix 15

16 GDP, Finland vs. Euro area in 2008 (21 July 08) 16

17 Consumer confidence Finland Euro Area (21 July 08) 17

18 Inflation in the Euro area (21 July 08) 18

19 Unemployment in Finland (21 July 08) Unemployment estimate for 2008 is 6.2 %. 19

20 Russian market in 2008 GDP growth estimate for %. Inflation %. Private consumption +9.8 %. Approx. 2 million m² and m² of class A office space will be completed in Moscow and St Petersburg respectively in Demand still exceeds supply in both cities. Office vacancy under 5 % in Moscow and St Petersburg. Retail vacancy 2-5 % in both cities. Logistics vacancy close to zero. Rental levels in office properties are still rising, retail and logistics properties rents stay stable. Sources: The World Bank, The Bank of Finland, Cushman & Wakefield, Colliers 20

21 Transaction volume in Finland 7,0 6,0 5,0 1000MEUR 4,0 3,0 2,0 1,0 0, /2008 preliminary * During Q2 transactions totalled appr. EUR 0.7 billion. * Source: KTI 21

22 Prime property yields Q2/08 in CBD residential office retail 7,5 % 7,0 % 6,5 % 6,0 % 5,5 % 5,0 % 4,5 % Source: KTI barometre survey

23 Office rent index and vacancy rate in Helsinki 12 % 10 % 8 % 6 % 4 % 2 % 0 % Source: KTI, Catella Property Group Vacancy Rate Rental Index Vacancy Rate (Helsinki) Rental Index (Helsinki cbd, 1993=100)

24 Rental levels of CBD office premises Q2/08 Helsinki Espoo Turku Tampere Source: KTI 24 ( )

25 Office stock in use HMA district Q4/ million net floor area Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Source: Catella Property Oy 25

26 Financial review Market overview Operational review Business areas Appendix 26

27 Property portfolio 30 June 2008 Properties divided by fair value, EUR million Office and retail properties divided by leasable area, altogether m² 12 % 5 % 25 % Office & Retail 13 % 70 % Logistics Property Development Russia & the Baltic Countries 75 % Office Retail 27

28 Office & retail and logistics properties by geographical area 30 June 2008 Office & retail and logistics properties divided by leasable area, 1.4 milj. m² Office & retail and logistics properties (EUR million) divided by fair value HMA 83 % HMA 87 % Tampere 9 % Tampere 6 % Turku 3 % Turku 2 % Oulu 2 % Oulu 1 % St Petersburg 1 % St Petersburg Moscow 2 % Moscow 3 % 1 % 28

29 Yield requirements in property valuation 30 Jun 2008, % Sponda CBD Helsinki/Vantaa Espoo Turku Tampere Oulu Office and retail Logistics Average valuation yield for the whole portfolio: 6.5 ( : 6.4) % 29

30 Cash yield for fair value 30 June ,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % Office & retail Logistics Russia Total 6.1 % 8.2 % 10.9 % 6.5 % 30

31 Economic vacancy rate 2004-Q2/2008 Sponda (figures withouth the Kapiteeli portfolio) Office & retail Logistics Total property portfolio Russia and the Baltic Countries 8.5 % 12.5 % 8.9 % 0 % Q2/

32 Lease contracts 30 June ,0 % 20,0 % 15,0 % 10,0 % Future cash flows 862 meur Average length of contracts 4.3 years O&R 4.7 years Log 3.0 years 5,0 % 0,0 % 1 yr 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs over 6 yrs Openended 32

33 Financial review Market overview Operational review Business areas Appendix 33

34 Office and Retail Properties 4-6/ / / / /2007 Total revenue, meur Net operating income, meur Operating profit, meur Economic occupancy rate, % Leasable area of properties m² in total. Fair value of properties on 30 June 2008 was EUR million, value change during January-June was EUR 1.7 million. Out of the Office and Retail portfolio, 42 % of the properties are situated in the CBD area and 24 % in Ruoholahti area. During Q Sponda sold office & retail properties for EUR 1.6 million. No properties were bought during the period. Investments in property maintenance were EUR 9.8 million in January-June 2008 of which EUR 4.3 million during Q2. 34

35 Logistics Properties 4-6/ / / / /07 Total revenue, meur Net operating income, meur Operating profit, meur Economic occupancy rate, % Leasable area of properties m² in total. Fair value of properties on 30 June 2008 was EUR million, value change during January-June was EUR -2.7 million. Drop in vacancy in Q2 was due to expiry of lease agreement in a single-use building of m². During Q2 Sponda bought logistics properties for EUR 0.2 million. No properties were sold during the quarter. Investments in property maintenance were EUR 1.5 million out of which EUR 0.6 million was invested in Q2. 35

36 Property Development Book value of portfolio is EUR million consisting land sites for EUR 74 million and active development projects for EUR 255 million. Investments for active projects were EUR 93.3 million in total since January In Q2 Sponda invested EUR 38 million. Investments are booked at cost in At least 50 % must be pre-let and all planning processes approved until any project can be started. Sponda signed contract to build Vuosaari Harbour Service Center. Total investment approx. EUR 12 million. Currently 60 % of the Service Center is pre-let. Completion in November First phase includes m² of offices and staff facilities, and m² of service and repair workshops. 36

37 Committed Development Projects OFFICE PRE-LET M² INVESTMENTS BY TOTAL INVESTMENT COMPL. Ruoholahti 100 % Meur 29.0 Meur Q4/2008 Sörnäinen 100 % Meur 22.0 Meur Q4/2008 TOTAL OFFICE Meur 51.0 Meur RETAIL City-Center N/A Additional Meur 110 Meur 2011 Itäkeskus 100 % Meur 56 Meur Q4/2008 TOTAL RETAIL Meur 166 Meur LOGISTICS Vuosaari harbour (I phase) 30 % Meur 107 Meur Nov 2008 ALL IN TOTAL ~70 % Meur 324 Meur 37

38 Uncommitted development pipeline OFFICE ESTIMATED INVESTMENT Pasila (in co-operation with Yle) 57.0 Meur ~2009 Ruoholahti 25.0 Meur ~2009 Ruoholahti (renovation of existing building) Meur ~2009 Ring road I 17.0 Meur ~2009 START AT THE EARLIEST Aviapolis, Vantaa 30.0 Meur ~2011 Naulakatu, Tampere 12.0 Meur ~2011 RETAIL Ratina, Tampere 200 Meur ~2009 Vaasa N/A ~2010 Kauneenkulma, Turku 5.0 Meur ~2009 LOGISTICS Vuosaari harbour (II phase, ~ m²) N/A On demand Honkatalo, Vantaa 10.0 Meur ~2009 RUSSIA Moscow Europa Terminal (20 ha, max m²) N/A ~2009 St Petersburg Logistics terminal (46 ha, max m²) N/A ~

39 Real Estate Funds 4-6/ / / / /07 Total revenue, meur Net operating income, meur Operating profit, meur Investment strategy Size (asset value) Sponda s holding Duration First Top LuxCo Office & retail % 5 years Sponda Fund I Logistics 205 Meur 46 % 10 years Sponda Fund II Logistics 74 Meur 44 % 7 years Whitehall/Niam ~ 300 Meur - ASSETS UNDER MGMT, TOTAL ~700 Meur 39

40 Russia and the Baltic Countries 4-6/ / / / /07 Total revenue, meur Net operating income, meur Operating profit, meur Economic occupancy rate, % Fair value of property portfolio was EUR million. In July 2008 Sponda bought an office property from the centre of Moscow. Net yield target over 9 %. A-class building with leasable office space of m², retail space of m² and parking for 143 cars. Acquisition was funded with long-term (7 years), unused loan that was agreed in March

41 IR contacts: Kari Inkinen President and CEO Tel: Robert Öhman CFO Tel: Pia Arrhenius Manager, Corporate Communications and IR Tel:

42 Financial review Market overview Operational review Business areas Appendix 42

43 EPRA Net Asset Value per share Equity attributable to equity holders of parent company Other equity fund (hybrid bond) Goodwill Deferred tax liability Accrued income tax Pension liability Fair value of derivatives Interest options Measurement of financial items of fair value Total Number of shares at the end of period EPRA NAV 9,95 43

44 Dividend Dividend policy is to distribute at least 80% of either earnings per share or cash flow per share, taking into account business development needs 1,4 1,2 1,27 1,27 1 0,8 0,6 0,4 0,61 0,57 0,56 0,53 0,5 0,5 0,37 0,4 * 0,5 EPS CEPS Dividend 0,2 0 0,

45 Major shareholders Shareholder No of shares % of total shares 1. The Finnish State Varma Mutual Pension Insurance Company The State Pension Fund Ilmarinen Mutual Pension Insurance Company Yleisradio Pension Fund Support Fund for commercial and technical sciences Livränteanstalten Hereditas Etera Mutual Pension Insurance Company Non-UCITS Nordea European Equity Hedge Mandatum Finnish Small Cap Fund Nominee registered shareholders: pcs, 51.4 % 45