Robust profits, property yield continues to rise

• As a result of the transaction with AP3, net sales reduced by 15 per cent to SEK 2,602 (3,060) m and gross profit decreased by 8 per cent to SEK 1,817 (1,982) m. • Profit before tax was SEK 351 (-1,185) m. Profit after tax was SEK 250 (-962) m, equivalent to SEK 1.80 (-7.00) per share. • As of 31 December 2009, the property portfolio comprised 585 (603) properties with a book value of SEK 21,861 (28,576) m. • In 2009, 18 (54) properties were acquired for SEK 1,307 (3,408) m; 32 (28) properties and half the ownership of 242 properties was also divested for a total of SEK 7,808 (1,313) m, generating a loss of SEK –135 (12) m. These divestments affected profit for calculating dividends by SEK 895 (268) m. • Profit for calculating dividends for 2009 was SEK 1,022 (840) m, equivalent to SEK 7.50 (6.20) per share. • The Board of Directors is proposing a dividend of SEK 3.75 (1.50) per share. • The forecast for the full year 2010 profit for calculating dividends is SEK 600 m, or SEK 4.40 per share. Fourth quarter (october-december) • As a result of the transaction with AP3, net sales reduced by 25 per cent to SEK 588 (784) m. • Profit before tax was SEK 41 (–1,462) m. Profit after tax was SEK -90 (-1,311) m, equivalent to SEK -0.70 (-9.60) per share. “Now that we have put 2009 behind us, I can conclude that it was a good year for Kungsleden, especially given the uncertain starting-point. We’ve never had such a strong balance sheet with a high equity/assets ratio, and a property portfolio of better quality. Our dividend yield is 7 per cent, which means that it is basically back at year-2005 levels. In like-for-like terms, the progress of our underlying operation was very positive. Rental revenues are up 5 per cent, our operating net is up 9 per cent and administration costs are down by 20 per cent. We were able to improve our earnings capacity gradually through the year, thanks to factors including the lettings markets where Kungsleden operates being stable. Both the commercial and public portfolios made solid progress, and we actually had reducing vacancies overall in the commercial holding. Nordic Modular posted its best profits ever, after the production adaptations completed early in the year. Kungsleden’s completed divestments support the valuation of the portfolio, as do the valuations conducted by external appraisers at year-end. Accordingly, I think that overall, our portfolio has shown itself to be just as resilient as we expected. In the fourth quarter, Kungsleden completed the purchase of five commercial properties from Northern Logistic Properties for SEK 525 m. We also completed the acquisition of five properties, operated by AWO, one of Germany’s largest public retirement home operators. Just before Christmas, we signed an agreement with Corem Property Group on the divestment of 22 commercial properties for SEK 460 m. A number of other deals were completed in the fourth quarter, and this marked a clear increase in activity levels compared to earlier in the year. Late in the year, we also observed the credit market starting to head in the right direction once again. Kungsleden arranged refinancing and drew down new credits. Accordingly, we are well equipped financially. In the fourth quarter, revised tax regulations for partnerships and limited partnerships had a SEK -139 m negative effect, implying that profit after tax for the quarter was also negative. Going into 2010, we may see a faint increase in vacancy levels, and somewhat lower earnings due to a negative consumer price index for the year’s rents. But with our very stable portfolio, I think these risks are fully manageable. The proposed dividend for 2009 is SEK 3.75 (1.50) per share. The Board’s estimate of profit for calculating dividend for 2010 is SEK 600 m.” Thomas Erséus Chief Executive