Interim Report, January - March 2001

Profit for the period after net financial income/expense amounted to SEK 97.2 million * Profit for the period after net income and expense amounted to SEK 97.2 million (32.6). The profit includes items affecting comparability totalling SEK 18.7 million (0.0), including an additional purchase sum of SEK 20 million for the divested Liljeholmen properties. * For comparable property holdings, the net rents from property management rose by 11 per cent and the gross profit by 50 per cent compared with the preceding year. * The rental market in central Stockholm and central Gothenburg continued to be strong. Office rents of over SEK 6,000 per square metre were noted in Stockholm. Stockholm, May 11, 2001 HUFVUDSTADEN AB (publ) Ivo Stopner President Enclosure: Interim Report, January - March 2001. Questions will be answered by Ivo Stopner and Clas Hjorth, telephone +46 8 762 90 00 Interim Report, January - March 2001 * Profit for the period after net interest income and expense amounted to SEK 97.2 million (32.6). The profit includes items affecting comparability totalling SEK 18.7 million (0.0), including an additional purchase sum of SEK 20 million for the divested Liljeholmen properties. * For comparable property holdings, the net rents from property management rose by 11 per cent and the gross profit by 50 per cent compared with the preceding year. * The rental market in central Stockholm and central Gothenburg continued to be strong. Office rents of over SEK 6,000 per square metre were noted in Stockholm. CONSOLIDATED RESULTS Property management 1) Gross profit during the period totalled SEK 129.2 million (90.6). Excluding costs for special projects, the gross profit rose by 38.2 per cent. Net rents from property management during the period amounted to SEK 272.0 million (254.6), equivalent to an increase of 6.8 per cent. For comparable property holdings, the increase was 11.1 per cent and the increase in gross profit was 50.5 per cent. Of the net rents from property management, the Stockholm Business Area accounted for SEK 186.3 million (171.0), the NK Business Area for SEK 58.9 million (59.0) and the Gothenburg Business Area for SEK 26.8 million (24.6). The increase includes SEK -7.9 million net from acquisitions and divestments. Property management expenses during the period totalled SEK 142.8 million (164.0). Divided according to business area, the Stockholm Business Area accounted for SEK 92.6 million (108.5), the NK Business Area for SEK 36.5 million (43.5) and the Gothenburg Business Area for SEK 13.7 million (12.0). The decrease in expenses within the Stockholm Business Area is attributable mainly to sales and reduced maintenance costs. Of the total maintenance costs for the Stockholm Business Area, special projects accounted for SEK 14.2 million (16.2). SEK m Sth NK Gbg Total Net rents 186.3 58.9 26.8 272.0 Costs -92.6 -36.5 -13.7 -142.8 Gross profit 93.7 22.4 13.1 129.2 The turnover supplement for the NK properties, which totalled SEK 20.7 million in 2000, is reported in the fourth quarter. Apart from this, there are no seasonal variations. Other operations Other operations include parking operations at Parkaden in Stockholm, conference operations at the World Trade Center in Stockholm and hotel operations at Citypalatset in Stockholm. With effect from 2001, parking operations at the World Trade Center are included under property management. The gross profit for the period totalled SEK 6.0 million (4.8). Net sales amounted to SEK 30.8 million (21.6). Operating expenses amounted to SEK 24.8 million (16.8). Other Income Statement items Central administration totalled SEK -8.8 million (-7.4) and comprises mainly salary and office expenses for the Group management and Group staffs. Items affecting comparability for the period totalled SEK 18.7 million (0.0), the whole of which refers to the sale of the Liljeholmen properties in 2000. Net financial income and expense amounted to SEK -47.9 million (-58.9). The Group's tax expense (both paid and deferred) for the period totalled SEK 25.6 million (+1.0). SPECIAL PROJECTS Special projects refer to measures taken to improve and develop the properties. The costs that arise in conjunction with this are in the short term a charge on profit. In the long term, however, special projects increase the return on property holdings. The profit for the period was charged with costs amounting to SEK 18.4 million (16.2) for special projects. The costs for the year refer mainly to Orgelpipan 7, Klarabergsgatan 56-64 in Stockholm, which involves the conversion of over 10,000 square metres for Postgirot Bank AB, due for completion in December 2001, and Femmanhuset in Gothenburg, where communication balconies and escalators are being built to improve access to the upper sales floor. This project is due to be completed at mid- year 2001. INVESTMENTS Investments in properties and equipment during the period totalled SEK 51.8 million (17.9). The largest single item is the construction of a new building on the Skären block on Norrmalmstorg in Stockholm. PROPERTY PORTFOLIO The book value of Hufvudstaden's property portfolio as of March 31, 2001 was SEK 10,561.8 million and the rentable space was 430,917 square metres. The total floor space vacancy rate on the same date was 3.4 per cent (2.6 at the year-end) and the vacancy rate based on rental income was 2.9 per cent (1.9 at the year-end). The increase is due mainly to a number of reconstruction projects. THE RENTAL MARKET The rental market in Hufvudstaden's prioritized market areas, central Stockholm and central Gothenburg, continued to be strong. The demand for well-situated office and retail premises was good. New leases for offices in the most attractive locations in Stockholm, such as the Golden Triangle, carried annual rents on the SEK 6,300 per square metre level, excluding the property tax supplement. Within the same area, annual rents for retailing space were SEK 10,000-15,000 per square metre, excluding the property tax supplement. The demand in Gothenburg for modern office and retailing premises in prime locations has also been good, while the vacancy level for office premises continued to fall. New leases for office premises in the most attractive locations carried annual rents of around SEK 2,000 per square metre, excluding the property tax supplement. In the case of leases for prime retailing space, annual rents varied from SEK 5,000 to SEK 8,500 per square metre, excluding the property tax supplement. FINANCING STRUCTURE Hufvudstaden's borrowing as of March 31, 2001 amounted to SEK 4,447.8 million (4,248.1 at the year-end). The average fixed interest period was 15 months, the average capital tie-up period was 27 months and the average interest rate on borrowings was 4.9 per cent. Net liabilities amounted to SEK 4,367.2 million (4,022.5 at the year-end). Capital tie-up structure, March 31, 2001 Maturity date Volume, Share, SEK m % 2001 946.1 21 2002 1,005.5 23 2003 600.4 14 2004 905.8 20 2005 500.0 11 2006 490.0 11 Total 4,447.8 100 Fixed interest structure, March 31, 2001 Maturity date Volume, Share, Average APR, % SEK m % 2001 2,111.1 47 4.9 2002 830.5 19 4.8 2003 600.4 14 4.4 2004 905.8 20 5.3 Total 4,447.8 100 4.9 PARENT COMPANY The loss before tax for the period after net interest income and expense was SEK 180.9 million (8.7), of which SEK 212.1 refers to the write-down of shares as a result of a transfer of assets, which resulted in a corresponding increase in the write-up fund. Liquid funds at the period- end amounted to SEK 67.5 million (106.7 at the year-end). Investments in properties and equipment during the period amounted to SEK 46.1 million (11.3). DEPRECIATION To maintain the high quality and standard of the buildings over the course of time, Hufvudstaden carries out ongoing maintenance. The measures taken are in the main reported in the Income Statement. By reason of the above, new percentages have been applied to buildings with effect from January 1, 2001. New Previous Buildings: offices 1% 2% Buildings: department stores, multistorey car parks, 2% 3% hotels and restaurants With effect from January 1, 2001, the World Trade Center building is reported as an investment property. NEW ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation, RR20 Interim Reports. A number of new recommendations came into force on January 1, 2001. Hufvudstaden's accounting records are affected mainly by RR9, Income Taxes. The result of this is an expansion in the reporting of deferred prepaid tax and tax payable on which, inter alia, the tax deficit deduction is calculated. The corresponding tax income and tax expense are reported in the Income Statement. Previously, Hufvudstaden reported write-ups of properties net, with due observance of deferred tax. This is now reported gross to the amount of SEK 1,356.5 million. The new Swedish Financial Accounting Standards Council's recommendations have been applied in this interim report, whereupon all comparative figures have been recalculated according to the new principles. Recalculation has been done according to RR5, Reporting of a Change in Accounting Principles. The effect on equity brought forward can be seen in Notes 1 and 2. FORTHCOMING INFORMATION Interim Report, Jan-June 2001 August 21, 2001 Interim Report Jan-Sept 2001 October 24, 2001 Year-end Report 2001 February 7, 2002 Annual Report 2001 March, 2002 Information is also published on Hufvudstaden's website, www.hufvudstaden.se The 2000 figures include properties that have now been sold. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/11/20010511BIT00750/bit0002.doc Full Report http://www.bit.se/bitonline/2001/05/11/20010511BIT00750/bit0002.pdf Full Report