Interim Report 1 Jan 31 Mar Kari Inkinen, President and CEO Robert Öhman, CFO

Transcription

1 Interim Report 1 Jan 31 Mar 2008 Kari Inkinen, President and CEO Robert Öhman, CFO

2 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 2

3 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 3

4 Q1/2008 in focus Total revenue development was as expected. The comparison figure in 2007 included both the revenue from the property portfolio sold in March 2007 and from Ovenia. Equity ratio stood at 30 %. Target is 33 %. Economic occupancy rate was 92.0 % (31 Mar 2007: 89.3 %). Property development projects are progressing as planned, roughly EUR 55 million invested during Q1. Investments in Russia continued according to Sponda s strategy. Two shopping centres were bought for 109 million USD in March. Sponda signed credit agreements for EUR 350 million. New property fund was established in February. Sponda signed an agreement to build Vuosaari Service Center at the new harbour. 4

5 Q1/2008 in focus 1-3/08 1-3/ /07 Total revenue, meur Net operating income, meur Operating profit, meur Profit for the period, meur Earnings / share, eur Operating cash flow / share, eur Mar Mar Dec 07 Fair value of inv. properties, meur NAV / share, eur EPRA NAV / share, eur Economic occupancy rate, %

6 Profit & loss statement Me 1-3/08 1-3/ /07 Total revenue Expenses Net operating income Profit on sale of inv. properties Valuation gain / loss Profit on sale of trading properties SGA expenses Other operating income/expenses Operating profit Financial income and expenses Profit before taxes Taxes from previous and current fin. years Deferred taxes Net income for the period

7 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

8 Financing Q1/2008 /2007 Q3/2007 Q2/2007 Q1/2007 Equity ratio 30 % 32 % 35 % 35 % 36 % Average interest rate 4.5 % 4.6 % 4.5 % 4.5 % 4.6 % Hedging 61 % 65 % 78 % 87 % 88 % Average loan maturity 2.9 yrs 2.6 yrs 2.9 yrs 3.1 yrs 1.8 yrs Average interest-bearing period 2.5 yrs 2.6 yrs 3.3 yrs 3.5 yrs 3.3 yrs Interest cover

9 Loan maturity % 12 % 1 %1 % 20 % 30 %* 2 % 6 % Total amount of interestbearing debt EUR million * Short-term loans total EUR million, of which: CPs EUR million Bank loans EUR million and Bonds EUR 137 million

10 Interest-bearing debt by type Interest-bearing debt EUR million 15 % 20 % Syndicate loans 25 % 17 % Syndicate loan limits Bonds Bank loans CPs 23 % 10

11 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 11

12 GDP, Finland vs. Euro area in

13 Consumer confidence and unemployment in Finland Unemployment estimate for 2008 is 6.2 % 13

14 Inflation in the Euro area 14

15 Macroeconomics in Russia 2007 and estimates for 2008 GDP growth 7.9 (2008 estimate: 7.6) %. Industrial production (+5.7) %. Inflation (9.5-10) %. Foreign exchange reserves $476.3 ( : $511.8) billion. Private consumption +9.8 %. In St Petersburg +20 %. Growth particularly strong in construction (23.5 %) and retail (14.8 %). Highest price increases: food and construction material. Wage increase 17 %. Average salary $497.4/month. Energy sector $1052/month. Sources: The World Bank, The Bank of Finland, Cushman & Wakefield 15

16 Transaction volume in Finland 7,0 6,0 5,0 1000MEUR 4,0 3,0 2,0 1,0 0, /2008 preliminary Source: KTI 16

17 Prime office yields /07 in HMA % 8,5 8,0 7,5 7,0 6,5 6,0 5,5 5,0 4,5 4, CBD Leppävaara Ruoholahti Keilaniemi Aviapolis Source: Catella Property Oy 17

18 Vacancy rates, HMA /2007 % ,0 % 6 4 4,7 % 2 0 2,4 % 1,4 % Source: Catella Property Oy 18 /07 Q2 90 Q2 91 Q2 92 Q2 93 Q2 94 Q2 95 Q2 96 Q2 97 Q2 98 Q2 99 Q2 00 Q2 01 Q2 02 Q2 03 Q2 04 Q2 05 Q2 06 Q2 07 Retail Office Warehouse&industrial All premises together

19 Rental levels of office premises /07 HELSINKI METROPOLITAN AREA /m 2 /year Q Q Q Q Q Q Q Q Q Q2 98 Helsinki, CBD, Prime Helsinki, CBD Tapiola Tikkurila Keilaniemi, Prime Ruoholahti, Prime Aviapolis, Prime 98 Q Q Q Q Q Q Q Q Q Source: Catella Property Oy 19

20 Office stock in use HMA district / million net floor area Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Source: Catella Property Oy 20

21 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 21

22 Property portfolio 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 22

23 Office & retail and logistics properties by geographical area Office & retail and logistics properties divided by leasable area, 1.3 milj. m² Office & retail and logistics properties (EUR million) divided by fair value HMA 84 % HMA 87 % Tampere 8.4 % Tampere 5.6 % Turku 3.4 % Oulu 2.0 % St Petersburg 1.0 % Moscow 1.2 % Turku 2.0 % Oulu 1.4 % St Petersburg 1.0 % Moscow 3.1 % 23

24 Yield requirements in property valuation 31 Mar 2008, % Sponda CBD Helsinki/Vantaa Espoo Turku Tampere Oulu Office and retail Logistics Average valuation yield for the whole portfolio: 6.4 ( : 6.4) % 24

25 Cash yield for fair value 10,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % Office & retail Logistics Russia Total 5.9 % 8.6 % 10.3 % 6.3 % 25

26 Economic vacancy rate 2004-Q1/2008 Sponda (figures withouth the Kapiteeli portfolio) Office & retail Logistics Total property portfolio Russia and the Baltic Countries 8.8 % 7.2 % 8.0 % 0 % Q1/

27 Lease contracts 31 Mar ,0 % 20,0 % 15,0 % 10,0 % Future cash flows 855 meur Average length of contracts 4.4 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 27

28 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 28

29 Office and Retail Properties 1-3/ / /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 31 March 2008 was EUR million, value change during Q1 was EUR 3.9 million. Out of the Office and Retail portfolio, 42 % of the properties are situated in the CBD area and 24 % in Ruoholahti area. During first quarter 2008 Sponda sold office & retail properties for EUR 6.1 million. Investments in property maintenance were EUR 6.2 million in January-March Elovainio shopping centre project is on schedule. 29

30 Logistics Properties 1-3/08 1-3/ /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 31 March 2008 was EUR million, value change during Q1 was EUR -0.8 million including property maintenance expenses. During first quarter Sponda bought logistics properties for EUR 18.6 million. Investments in property maintenance were EUR 1.0 million. 30

31 Property Development Book value of portfolio is EUR million consisting land sites for EUR 100 million and active development projects for EUR million. Investments for active projects were EUR 55.3 million during Q1/2008. Investments are booked at cost. Sponda signed contract to build Vuosaari Harbour Service Center. Total investment approx. EUR 12 million. Completion in November First phase includes m² of offices and staff facilities, and m² of service and repair workshops. 31

32 Active Property Development PROJECT OCCUPANCY TO DATE LEASABLE M² City-Center N/A Additional m² Vuosaari harbour 30 % Logistics m² (1st phase), in total m² Office + passenger terminal m² Service Center (1st phase m²) Retail building, Itäkeskus INVESTMENTS TO DATE TOTAL INVESTMENT 48.7 meur 110 meur meur 107 meur (First phase), in total 140 meur 100 % m² 27.9 meur 56 meur 2008 COMPLETION November 2008 (First phase) Office building, Porkkalankatu Office building, Sörnäinen Logistics building, Vantaa 100 % m² 9.3 meur 29 meur % m² meur % m² meur 2008 Ratina, Tampere Negotiations m² N/A 200 meur N/A 32

33 Project pipeline PROJECT PLANNED START OF THE PROJECT Retail, Turku (Kauneenkulma) ~ meur Office building, Pasila (in co-operation with Yle Pension Fund) ~ 2009 Office building, Salmisaari, Ruoholahti (renovation) TOTAL INVESTMENT ~ meur Office building, Ruoholahti ~ meur Office building, Ring I, Helsinki ~ meur Logistics building, Vantaa (Honkatalo) ~ meur Shopping centre, Vaasa ~ 2010 N/A Office building, Ruoholahti ~ meur 95 meur (Sponda s share 60 %, 57 meur) - The investment decision requirements for any of the projects listed are to have at least 50 % pre-let and all planning processes approved by authorities - The listed pipeline, together with the active property development projects, will amount to annual investments of approx. EUR 150 million Office building, Vantaa (Aviapolis), I phase ~ meur Office building, Naulakatu, Tampere ~ meur 33

34 Real Estate Funds 1-3/08 1-3/ /07 Total revenue, meur Net operating income, meur Operating profit, meur Fair value assessment made for the properties in First Top LuxCo and Sponda Real Estate Fund I in March 2008 for the first time. Gain in fair value totalled EUR 9.3 million. Assets under management approx. EUR 600 million in total. Investments in Sponda Real Estate Fund I (logistics fund) closed in January 2008 as the fund reached its target size of EUR 200 million. The fair value of property portfolio was EUR 205 million on 31 March New fund, Sponda Real Estate Fund II, was established in February Investments are made to logistics properties outside HMA. First acquisition of EUR 50 million made during Q1/2008. Equity investments will be made during Q2/

35 Russia and the Baltic Countries 1-3/08 1-3/ /07 Total revenue, meur Net operating income, meur Operating profit, meur Economic occupancy rate, % Fair value of property portfolio was EUR million. In March 2008 Sponda bought two shopping centres in Moscow for USD 109 million. Both centres are fully leased. Office property that Sponda bought in October 2007 held an official opening ceremony in April Negotiations with a potential tenant for the building are ongoing. Sponda s office in Moscow will open during spring Currently Sponda has 14 employees in Russia of which two in Moscow. 35

36 Prospects in 2008 Sponda forecasts: Its net operating income for 2008 to improve compared to last year. A slight improvement in the economic occupancy rate compared to the end of last year is also forecast for 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

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

38 Result Q1/2008 Market overview Sponda s operations in Q1/2008 Business areas Appendix 38

39 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,

40 Major shareholders Shareholder No of shares % of total shares 1. The Finnish State ,3 2. Varma Mutual Pension Insurance Company ,80 3. The State Pension Fund ,63 4. Ilmarinen Mutual Pension Insurance Company ,42 5. Yleisradio Pension Fund ,31 6. Etera Mutual Pension Insurance Company ,29 7. Support Fund for commercial and technical sciences ,24 8. Livränteanstalten Hereditas ,21 9. Nordea European Equity Hedge , Medicinska Understödsföreningen Liv och Hälsa ,11 Nominee registered shareholders: pcs, 53.3 % 40

41 Total building stock in Finland RETAIL OFFICE WAREHOUSE&INDUSTR. COMMERCIAL, TOTAL m 2 m 2 m 2 m 2 Helsinki MPA Tampere Turku Oulu Lahti Jyväskylä Kuopio Vaasa Rovaniemi Joensuu Lappeenranta Seinäjoki Total Finland Source: Catella Property Group 41