Profit for the period rose to SEK 356.0 M

Profit for the period rose to SEK 356.0 M Profit for the period (after tax) rose to SEK 356.0 M (Q1, 1998: pro forma 99.7), corresponding to SEK 2.11 (0.59) per share. Capital gains amounted to SEK 317.5 M (78.8) Sheraton Göteborg Hotel & Towers in Gothenburg and Galleria Forum in Sundsvall sold. An office property by Hötorget, central Stockholm, acquired. Ivo Stopner assumes office as new Managing Director and Chief Executive Officer. Shopping malls in Uppsala, Västerås and Norrköping sold after close of period. Stockholm, May 6, 1999 Hufvudstaden AB (publ) Ivo Stopner Managing Director Encl. Interim Report, January - March 1999 Questions will be answered by Ivo Stopner, Managing Director, or Catharina Lagerstam, Chief Financial Officer, telephone +46 8 762 90 00. HUFVUDSTADEN Interim Report, January - March 1999 Profit for the period (after tax) rose to SEK 356.0 M (Q1, 1998, pro forma: 99.7), corresponding to SEK 2.11 (0.59) per share. Capital gains amounted to SEK 317.5 M (78.8) Sheraton Göteborg Hotel & Towers in Gothenburg and Galleria Forum in Sundsvall sold. An office property by Hötorget, central Stockholm, acquired. Ivo Stopner assumes office as new Managing Director and Chief Executive Officer. Shopping malls in Uppsala, Västerås and Norrköping sold after close of period. CONSOLIDATED RESULTS Real estate management Net sales during the first quarter of 1999 amounted to SEK 226.3 M (199.6) , of which the Retail Business Area accounted for SEK 100.0 M (96.4) and the Office Business Area for SEK 126.3 M (103.2). Acquired properties accounted for SEK 17.7 M and sold properties for SEK 3.0 M of the SEK 26.7 M sales increase. The Group's operating expenses amounted to SEK 125.6 M (108.9), of which the Retail Business Area accounted for SEK 70.2 M (67.0) and the Office Business Area for SEK 55.4 M (41.9). The cost increase in the Office Busi- ness Area was mainly a function of the net of properties acquired and sold. Other operations Net sales amounted to SEK 40.3 M (37.7) , of which Parkaden accounted for SEK 12.4 M (11.3) and Sheraton Göteborg Hotel & Towers for SEK 27.9 M (25.6). Operating expenses for other operations amounted to SEK 37.1 M (34.7), of which Parkaden accounted for SEK 9.2 M (8.5) and Sheraton Göteborg Ho- tel & Towers for SEK 27.9 M (25.7). Unless otherwise specified, figures pertaining to the income statement for 1998 have been computed on a pro forma basis. The result for the year-earlier period included a small amount for the operations of the subsidiary, Birger Jarl, which has since been discontin- ued. Noncomparable items amounting to SEK 317.5 M consisted primarily of capi- tal gains of SEK 307.0 M on sales of shares in Hufvudstadens Hotel AB, which owns and operates Sheraton Göteborg Hotel & Towers, and of SEK 10.5 M on sales of shares in Galleria Forum i Sundsvall AB. Profits from participations in associated companies amounted to SEK 6.2 M (6.3), which were attributable in their entirety to Vasaterminalen. The Group's tax expense (income tax and deferred tax) during the period amounted to SEK 5.3 M (5.5). The low tax expense was due to utilization of tax-loss carryforwards. Unutilized tax-loss carryforwards amount to ap- proximately SEK 30 M. ACQUISITIONS, DIVESTMENTS AND INVESTMENTS In January, Hufvudstaden acquired the Hästhuvudet 3 office property (2,200 square meters of rentable space), which is located adjacent to Hötorget, central Stockholm, for SEK 82.0 M. As a result of this acquisition, Hufvudstaden owns the entire property block, which provides attractive de- velopment potential. Hufvudstaden has reached an agreement regarding the sale of all of the shares in Hufvudstadens Hotel AB, which owns and operates Sheraton Göte- borg Hotel & Towers. The sales price of approximately SEK 340 M for the shares generated a capital gain of SEK 307.0 M for the Group. The takeover date is April 30, 1999. Hufvudstaden has sold the shares in Galleria Forum i Sundsvall AB, with a takeover date of April 1, 1999. The transaction corresponded to a sales price of SEK 64.5 M for the property, which generated a capital gain of SEK 10.5 M for the Hufvudstaden Group. Investments in properties (and equipment) during the period amounted to SEK 96.8 M, including the acquisition of Hästhuvudet 3. REAL ESTATE PORTFOLIO The book value of Hufvudstaden's real estate portfolio amounted to SEK 7,862.2 M on March 31, 1999. Rentable space totaled 589,370 square meters. The total vacancy rate amounted to 3.6% (year-end 1998: 3.3) and the va- cancy rate based on rental income was 2.9% (year-end 1998: 2.5). The higher vacancy rates are due to the acquisition of the Hästhuvudet 3 prop- erty, which is currently unoccupied and being refurbished. FINANCING STRUCTURE Hufvudstaden's borrowing at the end of the quarter amounted to SEK 4,994.0 M. The average period of fixed interest on March 31, 1999 was nearly 10 months and the average interest rate was 4.24%. Net debt amounted to SEK 4,864.5 M. Financing structure, March 31, 1999 Matu-Vol Per- Average rity ume cent- effec- Date , age of tive in- SEK total terest M volume rate, % 1999 3,4 68.1 3.51 03. 4 2000 443 8.9 6.33 .6 2001 816 16.4 5.80 .3 2002 330 6.6 5.03 .4 2003 0.3 0.0 5.55 - To- 4,9 100.0 4.24 tal 94. 0 The sold shopping mall in Sundsvall and Sheraton Göteborg Hotel & Towers are not included in the real estate portfolio. PARENT COMPANY The Parent Company reported net profit of SEK 127.0 M for the period. Liq- uid funds on March 31, 1999 amounted to SEK 91.3 M. Investments in proper- ties (and equipment) during the period amounted to SEK 88.8 M. The sale of the shares in Hufvudstadens Hotel AB resulted in a loss of SEK 30.8 M. Dividends from subsidiaries during the period amounted to SEK 130.0 M. OTHER INFORMATION Hufvudstaden's Annual General Meeting voted to amend the wording of the Articles of Association in accordance with amendments of the Companies Act. The Articles of Association are accessible via Hufvudstaden's web site: www.hufvudstaden.se. SIGNIFICANT EVENTS FOLLOWING CLOSE OF REPORTING PERIOD During April, Hufvudstaden sold the Group's three remaining shopping malls: Galleria St. Per in Uppsala, Galleria Punkt in Västerås and Galle- ria Domino in Norrköping. The agreed takeover date is July 1, 1999. The transaction corresponded to a sales price of approximately SEK 760 M for the three properties. The sale will result in an after-tax capital gain of about SEK 30 M for the Hufvudstaden Group. Following this sale, Hufvudstaden only owns properties in Stockholm and Gothenburg. CALENDAR Interim Report, six months ending June 30, 1999August 11, 1999 Interim Report, nine months ending September 30, 1999 October 26, 1999 Year-end report, 1999February 2000 Annual Report, 1999March 2000 Information is also presented on Hufvudstaden's web site: www.hufvudstaden.se Condensed consolidated income statement Pro Legal SEK M Jan-Mar forma (1) 1999 Jan-Mar Jan-Mar 1998 1998 Net sales Real estate management 226.3 199.6 134.3 Other operations 40.3 37.7 37.7 266.6 237.3 172.0 Operating expenses Maintenance, operation -68.9 -59.2 -26.9 and administration Ground rents -4.5 -2.6 -2.4 Property tax -16.8 -15.3 -11.0 Depreciation -35.4 -31.8 -14.7 Real estate management -125.6 -108.9 -55.0 Other operations -37.1 -34.7 -34.7 Gross profit 103.9 93.7 82.3 - of which, Real estate 100.7 90.7 79.3 management - of which, Other op- 3.2 3.0 3.0 erations Central administration -9.6 -12.9 -8.4 Noncomparable items 317.5 78.8 78.8 Operating profit 411.8 159.6 152.7 Result from participa- 6.2 6.3 6.3 tions in associated companies Financial income and -56.7 -60.7 -41.4 expense Profit before taxes 361.3 105.2 117.6 Taxes -5.3 -5.5 -4.1 Net profit for the pe- 356.0 99.7 113.5 riod (1) The condensed income statement below is presented for legal reasons. Key data March March December SEK M 31, 31, 31, 1998 1999 1998 Visible equity/assets 35.3 31.1 34.5 ratio, % Shareholders' equity 18.59 12.53 17.28 per share, SEK Book value of proper- 46.52 35.35 46.79 ties per share, SEK Earnings per share dur- 2.11 0.59 1.29 ing the period, SEK(1) Number of shares at pe- 169,017, 133,755, 169,017, riod-end 547 388 547 (1) Earnings per share for 1998 are based on pro forma figures Condensed consolidated balance sheet Legal Legal March 31, December 31, SEK M 1999 1998 Properties 7,862.2 7,908.7 Other fixed assets 403.9 410.2 Current assets (2) 644.5 142.1 Total assets 8,910.6 8,461.0 Restricted sharehold- 2,315.0 2,336.6 ers' equity Unrestricted sharehold- 826.9 584.4 ers' equity Minority interest 0.7 0.7 Interest-bearing li- 4,994.0 4,918.7 abilities Other liabilities (1) 774.0 620.6 Total shareholders' eq- 8,910.6 8,461.0 uity and liabilities (1) The dividend of SEK 135.2 M approved by the An- nual General Meeting has been expensed. (2) Including the proceeds from the sale of Galleria Forum and Sheraton Göteborg Hotel & Towers Statement of changes in financial position SEK M Jan-Mar 1999 Jan-Dec 1998 Cash flow before change 69.3 234.3 in working capital and investments Change in working capi- -297.1 243.0 tal Cash flow before in- -227.8 477.3 vestments Net investments 339.5 -3,220.7 Cash flow 111.7 -2,743.4 Financing -57.9 2,775.0 Change in liquid assets 53.8 31.6 Definitions: See 1998 Annual Report Stockholm, May 6, 1999 Ivo Stopner Managing Director EXAMINATION REPORT We have undertaken a general examination of this quarterly report, and thus complied with the recommendation of the Swedish Association of Authorized Public Accountants. A general examination is significally more limited than an audit. During our examination, nothing arose to indicate that the quarterly re- port does not satisfy the requirements of the Stock Exchange and Annual Accounts Acts. Stockholm, May 6, 1999 SET Revisionsbyrå AB KPMG Bohlins AB Klas Alm Bo Ribers Authorized Public Accountant Authorized Public Accountant Hufvudstaden AB (publ) NK100, S-111 77 Stockholm Visiting address: Regeringsgatan 38 Telephone: +46 8 762 90 00, Facsimile: +46 8 762 90 01 E-mail: info@hufvudstaden.se Web site: www.hufvudstaden.se Registered corporate number: 556012-8240 Registered office: Stockholm ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/1999/05/06/20000905BIT00640/bit0001.doc http://www.bit.se/bitonline/1999/05/06/20000905BIT00640/bit0002.pdf