Interim Report, 1 January - 31 March 2001

Interim Report, 1 January - 31 March 2001 * Pre-tax profit amounted to SEK 38m (29m), of which profits from property sales made up SEK 19m (6m). * Management profit totalled SEK 18m (23m). Raised energy costs and interest expense meant that management profit was lower than in the previous year. * The letting ratio for the period was 97.5 (96.7) per cent. * Further property acquisitions and sales have strengthened Mandamus' profile as a housing company with a focus on growth areas. Residential properties now make up 84% of the property stock, and properties in growth areas 69%. * The whole-year forecast has been raised by SEK 20m to roughly SEK 160m before tax. Mandamus is a property company that seeks to own, develop and manage high-yield residential properties, mainly in growth areas in Southern and Central Sweden. OPERATIONS IN THE FIRST QUARTER OF 2001 Operations strongly oriented towards growth areas During the first quarter of the year, Mandamus continued to focus on growth areas and specialise in housing properties. With a completion date of 2 April, two residential property stocks in southern Greater Stockholm were purchased for a total of SEK 466m. Altogether, the acquisition comprised 1,355 housing units with a total rentable area of 104,400 m2. This further strengthens Mandamus' market position in the Greater Stockholm area. At 31 March, Mandamus was managing 6,045 dwelling units in Greater Stockholm, corresponding to 45 per cent of the company's total number of units. In addition, 17 properties in seven municipalities were sold for SEK 157m during the period under review. The properties sold comprised a total of some 38,500 m2, of which commercial premises accounted for 19,600 m2. At 31 March, 69 per cent of the property stock was located in Mandamus' defined growth areas, and residential properties made up 84 per cent. Rent and profit trends Rental income amounted to SEK 204m (204m), representing an unchanged level compared with the previous year. Contractual rent rises for 2001 relating to a high proportion of the stock of housing units will not affect rental income until the second quarter. The average economic letting ratio during the quarter was 97.5 (96.7) per cent. At 31 March, the economic letting ratio for residential property was 99.1 per cent, which shows very strong demand for housing in the growth areas. After deduction of property costs, net trading profit was SEK 90m (90m). Raised energy taxes and oil prices, combined with a colder first quarter than in the previous year, boosted energy costs by some 8 per cent, or SEK 3m, compared with the corresponding period in the previous year. Operating costs in the first quarter generally exceed those for the other quarters of the year, owing to high heating costs. The surplus ratio for the latest 12-month period was 51.3 per cent, which is 1.1 percentage points higher than in the corresponding period in 2000. Property depreciation totalled SEK 13m (12m) and central administrative expense just over SEK 4m (5m). Interest expense amounted to SEK 54m (51m), SEK 2m more than previously owing to a higher loan volume and SEK 2m more owing to higher average interest rates. Management profit, i.e. profit before items affecting comparability, such as disposal profit and interest contributions, amounted to SEK 18m, (23m). The decrease compared with the previous year is entirely due to higher energy costs and higher interest expense. Management profit for the past 12-month period (on a rolling 12-month basis) totalled SEK 134m, SEK 10m higher than in the corresponding period in the previous year. The table below shows management profit per quarter and rolling 12-month profit. Quarterly Q1 Q2 Q3 Q4 Whole outcome year Rental income, SEK m 2001 204 2000 204 204 211 209 828 1999 196 193 201 204 794 1998 127 127 125 168 547 Management profit, SEK m 2001 18 2000 23 37 53 26 139 1999 14 33 45 23 115 1998 8 20 19 11 58 Gross margin, % 2001 8.8 2000 11. 18. 25. 12. 16.8 3 1 1 4 1999 7.1 17. 22. 11. 14.5 1 4 3 1998 6.3 15. 15. 6.5 10.6 7 2 Profit from property disposals implemented during the first quarter amounted to SEK 19m (6m), representing an average profit of some 14 per cent on the book value of the properties sold. Interest contributions continued to decrease, and totalled just under SEK 1m (2m) during the period. Pre-tax profit, which includes such items affecting comparability as profits from property sales and interest contributions, amounted to SEK 38m (31m). Profit after estimated tax amounted to SEK 27m (23m), corresponding to earnings per share of SEK 1.35 (1.12). Restructured and concentrated property stock At 31 March 2001, the group had properties with a book value of SEK 5,754m (5,427m), representing a rise of just over 6 per cent. During the first quarter of 2001, two residential property stocks comprising 37 properties were purchased for SEK 466m. In the same period, 17 properties with a book value of SEK 138m were sold. There was a further reduction in the number of properties owned during the quarter, through property adjustments whereby a number of properties were joined together. Investments in the existing property stock during the quarter amounted to SEK 7m (12m). Since Mandamus' admission to the stock exchange three years ago, the property stock has almost doubled. This has taken place while the stock has also been restructured and concentrated in growth areas. At the time of quotation, 35 per cent of the property stock in terms of book value was located in growth areas; this proportion has now risen to 69 per cent. Moreover, 387 properties have been sold since quotation, and the properties that have been owned since that date currently make up only 23 per cent of the property stock in terms of book value. Change in property Book Numbe Renta holdings value r ble , SEK area, m 1,000 m2 At 15 June 1998 2,957 547 919 Properties sold - -387 -524 1,660 Remaining stock 1,297 160 395 Properties 4,332 171 846 acquired Investments/proper 268 -12 - ty regulation Depreciation/write- -146 - - downs Changes in 3 - - exchange rates At 31 March 2001 5,754 319 1,241 Financial position At 31 March 2001, the company had interest-bearing liabilities of SEK 3,853m (3,742m). Of these liabilities, SEK 9m (20m) were in foreign currencies. The loan portfolio has an average fixed-interest term of 2.0 (1.9) years, and average interest was 5.81 per cent (5.55). Net debt at 31 March 2001 amounted to SEK 3,757m (3,714m). At 31 March the group had SEK 416m (280m) in confirmed unutilised credit pledges. At 31 March, non-interest-bearing liabilities amounted to SEK 660m (218m). This figure does not include the purchase price of SEK 466m paid for the property stock that was acquired with completion on 2 April. From this date, interest-bearing liabilities will rise by SEK 466m and non-interest-bearing liabilities will be reduced by a corresponding amount. The purchase price was financed by two long-term loans for a total of SEK 370m and also by utilisation of existing credit limits. The average rate of interest on the total loan portfolio will be 0.06 percentage point lower than the average interest rate at 31 March 2001. Loan structure, Loans Averag % of fixed-interest , e loans terms until SEK m intere (year) st, % 2001 1,183 5.41 31 2002 781 5.87 20 2003 1,086 6.10 28 2004 281 5.82 7 2005 272 6.06 7 2006 175 5.87 5 2007- 75 6.06 2 Total 3,853 5.81 100 The visible equity ratio was 21.8 (26.0) per cent at 31 March. Since year-end 2000, the equity ratio has fallen by 1.2 percentage point, mainly as a result of net property acquisitions for the period. If the annual general meeting resolves on a dividend of just under SEK 80m, or SEK 4 per share, in accordance with the Board's proposal, the equity ratio will instantaneously be reduced to 20.5 per cent. Profit for the remainder of the year, according to the current forecast, will improve to around 22 per cent at year-end. Forecast In the light of profits for the first quarter and current contracts for the sale of properties in the month of April, pre-tax profit for the year is expected to reach around SEK 160m. This profit forecast represents a rise of around SEK 20m in relation to the forecast made previously, owing to disposal profit from additional property sales during the period. This profit forecast may be adjusted as a result of disposal profits from further property sales during the year. Stockholm, 26 April 2001 Anders Johansson Managing Director This interim report has not been examined by the company's auditors. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/26/20010426BIT01560/bit0002.doc The full report http://www.bit.se/bitonline/2001/04/26/20010426BIT01560/bit0002.pdf The full report

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