Interim report January - March 1999

Interim report January - March 1999 Operating results Net operating income for the period increased with 23 percent and amounted to SEK 179 million (146). The net gain on property sales during the period amounted to SEK 91 million. SEK 69 million relates to a sale in Japan, of which SEK 64 million is deducted in tax. Income after net financial items rose substantially, primarily due to property sales, to SEK 149 million (16). Earnings per share after tax amounted to SEK 0.92 (0.18). Cash flow per share from operating activities amounted to SEK 1.21 (0.45). Highlights following the conclusion of the first quarter The Annual General Meeting approved a cash dividend of SEK 2.50 per share (1.00) in accordance with the Board of Directors' new dividend policy. At least 75 percent of the company's after-tax income will be distributed to shareholders. Diligentia's forecast for the financial year 1999 calls for income of SEK 250 million, excluding capital gains, an improvement of 25 percent compared with 1998. Capital gains totalling SEK 50 million were generated through the sale of three properties in Stockholm at a sales price of SEK 188 million. Operating results Rental income for the period totalled SEK 314 million (310). In Sweden, rental income rose by 7 percent, from SEK 286 million to SEK 307 million. For international properties, rental income amounted to SEK 7 million (23). The decrease is due to divestments in the international property portfolio. Expenses for operations, management, maintenance and tenancy modifications totalled SEK 135 million (164), of which the Swedish properties accounted for SEK 129 million (149) and the international properties for SEK 6 million (15). The Group's administrative expenses amounted to SEK 18 million (25). Net operating income for the Group amounted to SEK 179 million (146) during the period. In the Swedish portfolio, net operating income rose by 30 percent compared with the corresponding period of 1998, from SEK 137 million to SEK 178 million. The net gain on property sales during the period was SEK 91 million (5). SEK 69 million relates to the sale of a property in Japan, the tax charge on which is SEK 64 million. Operating income for the period amounted to SEK 231 million (107) and income after net financial items was SEK 149 million (16). Income for the period after tax and minority interest amounted to SEK 58 million (11). Income statement for the period January-March 1999 compared with the corresponding period of 1998 divided between Swedish and international properties SEK million SwedenSweden Int'l Int'l Total Total 1999 1998 1999 1998 1999 1998 Rental income 307 286 7 23 314 310 Operations and maintenance-129 -149 -6 -15 -135 -164 Net operating income178 137 1 9 179 146 Depreciation -21 -19 0 0 -21 -19 Capital gains on property sales 25 5 66 0 91 5 Administrative expenses-17 -24 -1 -1 -18 -25 Net financial income and expenses-70 -66 -12 -25 -82 -91 Income after net financial items 95 33 54 -17 149 16 Income, expressed as the yield on the property portfolio compared with the first quarter of 1998, improved from 6.8 percent to 7.1 percent for the Swedish managed properties and declined from 4.4 percent to 4.1 percent for the international properties. During the period Diligentia signed new leases and renegotiated existing agreements in Sweden with annual rent of SEK 38 million and lettable area of 39,000 square meters. Financing and liquidity Interest-bearing financing in the Diligentia Group for the majority of the Swedish properties consists of a consortium mortgage loan. Financing also includes mortgage loans and check overdraft facilities. Diligentia's remaining international properties in large part are fully financed directly or indirectly in each foreign currency. Interest-bearing liabilities in the Group amounted to SEK 6,717 million (7,418). The Group's average borrowing rate was 5.0 percent on March 31, 1999. The Swedish loan portfolio of SEK 5,290 million (5,023) had an average interest rate of 5.4 percent and the international portfolio of SEK 1,427 million (2,395) had an average rate of 3.6 percent. The Group's liquid assets as of March 31, 1999 amounted to SEK 127 million (266). Unutilized loan facilities, including the consortium mortgage loan limit, amounted to slightly more than SEK 800 million as of March 31. Cash flow from operating activities was SEK 76 million (28) for the period. Property portfolio Of the property portfolio's total book value of SEK 11,305 million (10,974), SEK 10,455 million (8,914) related to Sweden and SEK 850 million (2,060) to international properties. The total number of properties in the Group was 303 (366), of which 285 (307) were in Sweden and 18 (59) abroad. Depreciation on the Swedish properties amounted to SEK 21 million during the first quarter. Because the international properties are reported as current assets, there is no depreciation. Any revaluations and write-downs in international properties are made at year-end. Changes in the portfolio During the period Diligentia sold 7 properties (12) for a total sales value of SEK 479 million (144). International property sales accounted for SEK 341 million. The net capital gain on property sales during the period was SEK 91 million (5). SEK 69 million relates to the sale of a property in Japan, on which the tax charge amounts to SEK 64 million. Net operating income from the properties sold during the period amounted to SEK 1 million. Diligentia remaining international property portfolio amounts to approximately SEK 850 million (2,100). See appendix: Property portfolio March 31, 1999. Capital expenditures Diligentia allocates capital expenditures for its property portfolio on a continuous basis. During the period capital expenditures totalled SEK 38 million (94). Parent Company Diligentia AB is the Group's Parent Company, in which the Group's shareholders' equity is concentrated. Borrowing in the Group is done in large part through the Parent Company. The Parent Company carries on customary Group-wide activities, the expenses for which amounted to SEK 13 million (20) during the period. Forecast for 1999 Diligentia's forecast for full-year income after net financial items, excluding capital gains, is SEK 250 million for 1999, an improvement of 25 percent compared with the 1998 result. Annual General Meeting of Diligentia AB Diligentia's Annual General Meeting on Tuesday, April 13 approved a dividend of SEK 2.50 per share for the financial year 1998. In total, SEK 157 million was distributed to the shareholders. The Annual General Meeting re-elected the following members of the Board of Directors: Leif Almstedt, Mats Cederholm, Björn Edgren, Bernt Johansson, Sven Nyman, Anders Rydin and Lars Trane. At the Board meeting following the Annual General Meeting, Anders Rydin was elected Chairman until the next Annual General Meeting. In addition, the following Auditors were re-elected: Göran Jacobsson, Öhrlings Pricewaterhouse Coopers AB, and Thomas Thiel, KPMG AB, as well as Deputy Auditors Ulf Westerberg, Öhrlings Pricewaterhouse Coopers AB, and Magnus Jacobsson, KPMG AB. The Annual General Meeting also approved the amendment to Diligentia's Articles of Association in accordance with the Board of Directors' proposal. Financial reports Interim report January-June August 18 Interim report January-September November 4 The information in the interim report has not been reviewed by the company's auditors. Diligentia is one of Sweden's largest real estate companies. The book value of the Group's Swedish property portfolio amounted to SEK 10,455 million on March 31, 1999. The book value of the international properties amounted to SEK 850 million. Diligentia's overall strategy is to concentrate its operations on select market sectors in Stockholm, Gothenburg and the Öresund region. Diligentia is listed on the A-list of the Stockholm Stock Exchange. Stockholm, April 29, 1999 Mats Cederholm Managing Director and Chief Executive Officer For further information, please contact: Mats Cederholm, telephone: +46-8-5875 8110 or +46-70-426 8110 e-mail: mats.cederholm@diligentia.se Göran O. Westerberg, Head of Group Communications and Investor Relations, telephone: +46-8-5875 8120 or +46-70-426 8120 e- mail: goran.westerberg@diligentia.se Internet address: www.diligentia.se e- mail: diligentia@diligentia.se ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/04/29/19990429BIT00460/bit0001.doc The full report http://www.bit.se/bitonline/1999/04/29/19990429BIT00460/bit0002.pdf The full report http://www.bit.se/bitonline/1999/04/29/19990429BIT00460/bit0003.xls Tables