Financial Year Kari Inkinen CEO

Transcription

1 Financial Year 2005 Kari Inkinen CEO

2 Strategy Target: to increase business volume and profitability Possible development projects are approximately m² Development target 50 meur/year Profitability enhanced by more efficient property management and by improved maintenance quality New business areas: Russia, Baltic states and asset management Investments in Russia due to start in 2006 Maximum exposure % of balance sheet City-Center, Helsinki

3 Major events in 2005 Acquisition of logistics and office building in Ruosilantie 16, Helsinki Investment 28.4 meur Leasable area m² Economic occupancy rate 100 % Disposal of Karjalan Kauppakeskus in Lappeenranta Selling price 7.2 meur New CEO Kari Inkinen started 1 June 2005 New organisation 1 Sep 2005 Two new business units: Property Development and New Business Areas City-Center, Helsinki

4 Events after end of 2005 Partnership in real estate fund Sponda holds 20 % stake Sponda will manage the fund Acquisition of office building in Kalkkipellontie 6, Espoo Investment 11.2 meur Total leasable area m², building rights for m² Net yield for purchase price 6.6 %, fully leased 8.1 % Economic occupancy rate 83 % City-Center, Helsinki

5 2005 in brief Total revenue, Me Operating profit, e EBITDA, Me Profit for the year, Me Earnings / share, e Operating cash flow / share, e Market value of the portfolio, Me NAV / share, e Return on investment, % Return on shareholders equity, % Economic occupancy rate, % 1-12/ /

6 Dividend 1,2 1 0,97 0,90 0,8 0,6 0,4 0,2 0 0,50 0,50* 0,39 0,39 0,04 0,37 0,30 0,30 76,9 % 92,8 % 76,9 % 1250 % 135,1 % * EPS Dividend Pay-out ratio The EPS for 2004 and 2005 is calculated according to the IFRS. * Board proposal

7 Market review

8 Business conditions Finnish GDP growth just under 2.0 % in 2005, growth estimate for 2006 is 3.0 % Inflation 1.0 %, unemployment 8.4 % Growth in purchasing power estimated to be 2.0 % in 2006 Growth in private consumption estimated to be 2.5 % in 2006 Source: Statistics Finland, ETLA

9 GDP growth, Finland Euro area % Finland Euro Area * 2006* Source: Statistics Finland, Ministry of Finance, KTI

10 Prime office rents Q3, Europe LONDON PARIS MOSCOW DUBLIN STOCKHOLM MADRID AMSTERDAM HELSINKI BRUSSELS OSLO BERLIN COPENHAGEN BUDAPEST Source: KTI, Jones Lang LaSalle e/m²/year

11 Office vacancy rates Q3, Europe AMSTERDAM STOCKHOLM DUBLIN BUDAPEST BRUSSELS BERLIN WARSAW OSLO HELSINKI COPENHAGEN LONDON MADRID PARIS MOSCOW Source: KTI, Jones Lang LaSalle, Catella Property Group

12 Vacancy rate, HMA % 14 Helsinki metropolitan area Retail Office Warehouse&Industrial Source: Catella Property Group

13 Rental levels, HMA /m²/year 1600 Helsinki metropolitan area, prime rents Retail, Helsinki CBD Office, Helsinki CBD Warehouse, Ring Road III Retail: Average area 150 m 2, Office: Average area 500 m 2, Gross rent /m²/year excl. VAT, New agreements Source: Catella Property Group

14 Net take up, office premises m² Helsinki metropolitan area Initiated constructions Net take-up Completed building projects Net take-up forecast Source: Catella Property Group

15 Transactions 3,5 domestic international international portfolio 1000MEUR 3 2,5 2 1,5 1 0, / (preliminary) Stock trading of listed property companies not included Source: KTI

16 Operational review

17 Property Development City-Center project proceeding as planned Development due to start in the summer of 2006 depending on the ratification of the zoning plan First phase includes expansion of the technical space in levels -5 and -4 and restaurants in the first floor In 2006 amount to be invested is estimated to be meur of the total 110 meur Honkatalo in Hakkila, Vantaa m² new logistics space Construction to start 2006

18 Modernization of office buildings In 2005 Sponda has put a lot of emphasis in modernizing its office buildings Largest projects in Bulevardi 1, Korkeavuorenkatu 35 and 37, Havis Business Center and City-Center in Helsinki Miestentie in Espoo Total amount invested in 2005 in property maintenance and quality improvements 20.7 meur

19 Acquisitions and disposals ,2 28, ,6-16,8 25,5 56,2 Acquisitions ,3-21,9 79,5 13,2 Disposals ,9 45, , ,8 17, Meur

20 Cash yield for market value Business unit Geographical area 10,0 % 12,0 % 9,0 % 8,0 % 10,0 % 7,0 % 6,0 % 5,0 % 8,0 % 6,0 % 4,0 % 3,0 % 2,0 % 1,0 % 0,0 % Office & retail Logistics Total 4,0 % 2,0 % 0,0 % CBD HMA HMA Logistics Other Total 5.6% 9.1% 6.4% 5.3% 6.5% 8.9% 10.1% 6.4%

21 Lease contracts ,0 % 16,0 % 14,0 % 12,0 % 10,0 % 8,0 % Future cash flows 461 meur Average length of contracts 4.3 years 6,0 % 4,0 % 2,0 % 0,0 % Openended

22 Customers by sector customers 1070 lease agreements 0,20 % 7 % 12 % 26 % Retail Manufacturing/R&D Healthcare/Education Bank/Investment 11 % Public sector 9 % 5 % 6 % Building/Logistics/Transport IT/Media/Publishing Hotel/Restaurant 5 % 18 % Energy Other services

23 Economic occupancy rate Sponda % % % % % % Office & retail Logistics Total property portfolio

24 Vacancy rate Sponda 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0, Office & retail Logistics Total property portfolio

25 Results 2005

26 Profit & loss statement /2005 / / /2004 Total revenue 25,6 25,3 103,1 99,2 Maintenance cost -6,8-6,6-25,6-24,8 Net operating income 18,8 18,7 77,5 74,4 Profit/loss on sale of investment properties - -0,2-0,2 0,1 Valuation gain / loss 6,1-30,1-5,1-50,8 SGA expenses -1,5-1,7-7,0-5,6 Other operating expenses 0,1 0,7 0,3-1,1 Operating profit/loss 23,5-12,6 65,5 17,0 Financial income and expenses -6,7-6,9-26,3-26,6 Profit/loss before taxes 16,8-19,5 39,2-9,6 Taxes -3,7 4,9-9,6 12,8 Net income for the period 13,1-14,6 29,6 3,2

27 Rental revenue profit Profit from renting : Profit before tax 39,2-9,5 Revaluation deficit 5,1 50,8 Profit on sale of assets -0,3-1,4 Loss on sale of assets 0,6 1,3 Profit from renting 44,6 41,2 Change in profit from renting: Profit from leasing actitivities ,2 Net rental income growth 3,0 Marketing and administration -1,4 Interest costs 0,3 Other 1,5 44,6

28 Tax charge Tax charge (meur) Profit before tax 39,2-9,5 Expected tax (26%) -10,2 2,8 Losses not deducted (property companies) -0,1 Non-deductible expenses -0,4 Non-taxable income 0,9 3,7 Taxes from previous years -0,1 0,3 Tax loss carryforward 0,2 Change in tax rate (29% - 26%) 6,1 Tax charge for period -9,5 12,7

29 Changes in NAV Net Asset Value Net assets at start of the period 586,6 605,3 Net profit 29,6 3,2 Dividends paid -39,4-23,5 Share capital increase 1,6 1,6 Valuation of interest derivatives -4,2 Net assets at end of period 574,2 586,6 Change -2,1 % NAV/share 7,25 7,44

30 Change in like-for-like rental income Change in like-for-like rental income 2004/2005, Me Rental income Acquisitions ,9 % Disposals ,8 % Indexation 1.0 1,0 % Increase in rents/occupation 0.7 0,7 % Rental income ,7 %

31 Market value of properties ,0 1400,0 1200,0 1420,0 1182,9 1241,1 1221,5 1259,7 1000,0 800,0 Market value, meur 600,0 400,0 200,0 0,

32 Balance sheet ASSETS Me Me Long-term assets 1 271, ,6 Short-term assets 7,4 10,2 Assets total 1 278, ,8 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity total 574,3 586,6 Long-term liabilities Interest-bearing debt 549,2 525,0 Pension liability - 0,1 Provisions 1,1 1,4 Other debt 5,8 - Deferred tax liabilities 63,4 56,2 Long-term liabilities total 619,5 582,7 Short-term liabilities 84,9 76,5 Liabilities total 704,4 659,2 Shareholders equity and liabilities 1 278, ,8

33 Financing Equity ratio 45 % 47 % Average interest rate 4,2 % 4,3 % Hedging 76 % 76 % Average loan maturity 3,2 yrs 3,7 yrs Average interest-bearing period 2,1 yrs 2,6 yrs Interest cover 2,7 3,1

34 Loan maturity % 11 % 16 % 16 % Total amount of interestbearing debt 617 meur 16 % 25 %

35 Shareholders Number % of shares of shares and votes State Treasury Investment Fund Nordea Nordic Small Cap The State Pension Fund Etera Mutual Life Insurance Company Pension Trust of Yleisradio Support Fund for the Commercial and Technical Sc Icecapital European Property Livränteanstalten Hereditas Nordea European Equity Hedge Foundation of Economic Education Total Nominee-registered (foreign shareholders) (52,9 %) Altogether registered shareholders