Interim Report 1 January - 31 March 2002

Interim Report 1 January - 31 March 2002 · Profit after financial items amounted to SEK 324m (454) · Property sales of SEK 902m (1,350) generated capital gains of SEK 174m (304), of which for the first quarter of 2002 the entire amount is included in profit from project development · Profit from project development rose to SEK 358m (159). The project development margin for the last 12 months amounted to 13.5% · Over the past 12 months, return on equity amounted to 27% and earnings per share amounted to SEK 34 SEKm January - March April - March Full year 2002 2001 2001/02 2001 Net sales 2,331 1,90 9,067 8,642 6 Operating profit 394 534 1,824 1,964 Profit after financial items 324 454 1,499 1,629 Project development margin (%) 16.1 9.1 13.5 11.8 Earnings per share (SEK) 7.70 9.80 34.00 36.30 Return on equity (%) 27.3 30.1 Group Summary The year started well for the JM Group. Net sales and gross profit developed as anticipated in JM's still favourable housing market. Demand and prices for JM's housing remained at a flat but still satisfactory level in all prioritised markets. Major sales of newly developed properties have been carried out with good results. Renegotiated leases in JM's portfolio were signed at higher rental levels than in the previous rental period. Over the past 12-month period, return on consolidated equity amounted to 27%. Over the last five calendar years average return on equity has been 19%. The Group's return target over a business cycle is 15%. Earnings per share over the past 12 months amounted to SEK 34. " Demand and prices for JM's housing remain stable. We anticipate continued favourable conditions for JM's project development activities in 2002." Carl Eric Stålberg, President and CEO SIGNIFICANT EVENTS DURING THE QUARTER Project development Project development of residential and commercial properties is JM's core business. Undeveloped and developed land is acquired and transformed through construction, conversion or extension into attractive living and working environments. The satisfactory trend for project development continued with profit growth of 125% to SEK 358m (159). The margin in these operations amounted to 16.1% (9.1) for the period. This margin can fluctuate over the quarters and the sale of the newly developed properties in Frösunda, Stockholm, with a capital gain of SEK 170m had a major impact in the first quarter of 2002. The target is to maintain a margin of over 12%. The portfolio of building rights corresponds to 27,000 residential units which is the same level as at year-end 2001. The number of housing starts during the period was 600 (900). Demand for JM's housing is good and the number of reservations remains high. Sold residential units in the form of signed contracts totalled 555 (547) during the quarter. Both housing starts and sales volume can vary over time depending on the dates for project starts and the size of individual projects. The somewhat uncertain business climate in Sweden has led JM to raise its requirements for the proportion of reservations before building starts which has temporarily reduced the number of starts. The number of sold and started residential units is expected to increase significantly in 2002, mainly in the second half of the year. The target of 4,500 housing starts by 2003 remains unchanged. Commercial project development continues to be conducted with considerable caution. Management properties JM's portfolio of fully developed management properties is being reduced according to plan. The remaining portfolio will be subject to a high rate of turnover. The operating surplus from property management amounted to SEK 77m (120) during the period. The lower operating surplus was due to property sales of approximately SEK 4 billion in the previous year, which were carried out in line with the Group's strategy to sell fully developed properties down to a remaining level of SEK 2 billion in book value. During the period, properties were sold for SEK 902m (1,350) with a capital gain of SEK 174m (304), of which the entire amount is included in profit from project development. Investments in existing management properties amounted to SEK 96m (144). The rental market for commercial premises was characterised by a downturn in 2001. In the first quarter of 2002, however, there were some signs of increased interest in JM's premises which are now entirely concentrated to the Stockholm area, primarily the inner city and Danderyd. JM's fully developed property portfolio comprises 177,000 sq.m. (357,000). Vacancies in JM's portfolio of fully developed management properties correspond to 9% (2) of annual rents and 8% (2) of space. At year-end 2001, vacancies amounted to 7% of annual rents and 6% of space. The higher vacancies are mainly explained by the continued sale of properties with very low vacancies but also by longer lead times from termination to reletting. Major property sales during the period were the sale of two newly developed office properties in Frösunda, Stockholm. Hilton 4 was sold to International-Immobilien Institut for SEK 280m and Hilton 1, which among other things houses JM's head office, was sold to Deutsche Grundbesitz Investment GmbH for SEK 555m. These sales provided a combined capital gain of SEK 170m. SEKm (book value) 31 March 2002 31 Dec 2001 Fully developed properties 2,970 3,666 Properties under development 379 405 Properties for further development 647 646 Total 3,996 4,717 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/04/18/20020418BIT01270/wkr0001.doc The full report http://www.waymaker.net/bitonline/2002/04/18/20020418BIT01270/wkr0002.pdf The full report