Interim Report, 1 january-30 June 2001

Interim Report, 1 January - 30 June 2001 · Pre-tax profit amounted to SEK 93m (91m), of which profits from property sales made up SEK 33m (27m). · Management profit totalled SEK 58m (60m), of which SEK 40m (37m) related to the second quarter (Q2) - a record figure for this quarter. · Mandamus is stepping up its expansion rate by joining in a consortium acquisition of 4,236 flats in southern Greater Stockholm. · At 30 June, 69% of Mandamus' own property stock was located in growth areas, and residential properties made up 85% of the stock. · The whole-year pre-tax profit forecast has been raised by SEK 10m to roughly SEK 170m. · OPERATIONS IN THE FIRST SIX MONTHS OF 2001 Participation in consortium for property acquisitions speeds up expansion rate In co-operation with LRF and Länsförsäkringar, Mandamus has formed a company for ownership and development of two residential property stocks in the municipality of Haninge in southern Greater Stockholm. Altogether, the acquisition comprises 4,236 flats that are expected to bring in annual rents totalling some SEK 250m. Mandamus has invested a total of SEK 95m in the consortium, corresponding to a one-third ownership stake, of which shareholder loans make up SEK 85m and shares SEK 10m. Mandamus has also been entrusted with the task of managing the newly acquired properties on behalf of the consortium, and has appointed the MDs of the companies that own the property stocks. The aggregate investment for the whole acquisition amounts to SEK 1,380m, financed by means of loans corresponding to 80% of the purchase price and a 20% down- payment. In the consortium's view, the investment should be capable of yielding an annual return on risk capital of at least 20%. Rent and profit trends Rental income amounted to SEK 425m (408m), representing a rise of just over 4% compared with the previous year. This rise in rental income was due primarily to additional rents from newly acquired properties over the past 12-month period. The average economic letting ratio during the period was 97.7%, one percentage point higher than in the corresponding period in the previous year and 0.7 higher than at year-end 2000. Current vacancies relate mainly to commercial premises. After deduction of property costs, net trading profit was SEK 207m (197m). Depreciation on properties amounted to SEK 26m (24m) and central administrative expense to SEK 8m (10m). Interest expense totalled SEK 119m (104m) -- up SEK 15m, owing mainly to a higher loan volume for the purpose of financing Mandamus' property acquisitions. Financial income amounted to SEK 4m (1m), and its increase was due to additional financial income from Mandamus' participation in the Haninge consortium. Management profit, i.e. profit before items affecting comparability, such as disposal profit and interest contributions, totalled SEK 58m (60m). The decrease compared with the previous year is due to higher interest expense. Management profit for the past 12-month period (on a rolling 12-month basis) totalled SEK 137m, SEK 9m higher than in the corresponding period in the previous year. The figure for management profit for Q2 2001, at SEK 40m (37m), was a record for this quarter. [REMOVED GRAPHICS] Q1 Q2 Q3 Q4 Whole year Quarterly outcome Rental income, SEK m 2001 204 221 2000 204 204 211 209 828 1999 196 193 201 204 794 1998 127 127 125 168 547 Management profit, SEK m 2001 18 40 2000 23 37 53 26 139 1999 14 33 45 23 115 1998 8 20 19 11 58 Gross margin, % 2001 8.8 18.1 2000 11.3 18.1 25.1 12.4 16.8 1999 7.1 17.1 22.4 11.3 14.5 1998 6.3 15.7 15.2 6.5 10.6 The surplus ratio continued to improve, to 51.5% (50.2%) for the latest 12-month period. The gross margin for the corresponding period amounted to 16.2% (15.7%). Profit from property disposals implemented during Q1 and Q2 totalled SEK 33m (27m), representing an average profit of some 17% on the book value of the properties sold. Interest contributions decreased as expected, and amounted to just under SEK 2m (4m) during the period. Pre-tax profit, which includes such items affecting comparability as profits from property sales and interest contributions, totalled SEK 93m (91m). Profit after estimated tax amounted to SEK 67m (66m), corresponding to earnings per share of SEK 3.36 (3.20). Restructured and concentrated property stock At 30 June 2001 the group owned properties with a book value of SEK 5,709m (5,571m), representing a rise of just over 5% since year-end. This increase was due mainly to the acquisition of two property stocks for a total of SEK 466m in the municipality of Huddinge in southern Greater Stockholm. During the first half of 2001, 38 properties were purchased for SEK 477m. In the same period, 24 properties with a book value of SEK 197m were sold. There was a further reduction in the number of properties owned during the period, through property adjustments whereby a number of properties were joined together. At 30 June, the number of properties owned was 311. Investments in the existing property stock during the period amounted to SEK 23m (29m). Since Mandamus' admission to the stock exchange three years ago, the property stock has almost doubled. This has taken place while the stock has also been restructured and concentrated in growth areas. At the time of quotation, 32% of the property stock in terms of book value was located in growth areas; this proportion has now - at 30 June 2001 - risen to 69%. The proportion of flats acquired in growth areas, i.e. including the management assignment in Haninge, has simultaneously risen to 79%. The share of residential properties has also continued to rise, to 85% at 30 June - 25 percentage points higher than at the date of the company's stock-exchange admission. Change in property holdings Book value, Number Rentable area, SEK m 1,000 m2 At 15 June 1998 2,957 547 919 Properties sold -1,719 -394 -543 Remaining stock 1,238 153 376 Properties acquired 4,343 172 848 Investments/property regulation 284 -14 - Depreciation/write-downs -159 - - Changes in exchange rates 3 - - At 31 March 2001 5,709 311 1,224 Financial position At 30 June 2001, the group had interest-bearing liabilities of SEK 4,292m (3,861m). Of these liabilities, SEK 9m (14m) were in foreign currencies. The average fixed-interest term at 30 June was 2.2 (1.9) years. During the first half-year, loans were successively rescheduled for longer terms and the average fixed-interest term became 0.1 year longer. Nonetheless, Mandamus succeeded in reducing its average interest rate by two points during the first two quarters, to 5.75%. Net debt at 30 June 2001 amounted to SEK 4,180m (3,827m). Since year-end, net debt has risen by SEK 280m owing to new loans taken out to finance property acquisitions and investments in a property consortium during the period. At 30 June the group had SEK 345m (361m) in confirmed unutilised credit pledges. Loan structure, fixed-interest terms Loans, Average % of loans until (year) SEK m interest, % 2001 979 5.35 23 2002 862 5.78 20 2003 1,088 6.10 25 2004 456 5.80 11 2005 346 6.00 8 2006 487 5.44 11 2007- 74 6.06 2 Total 4,292 5.75 100 The visible equity ratio was 21.4% (20.7%) at 30 June, while the adjusted equity ratio was 26.6% (24.4%). Profit for the period after tax, SEK 67m, did not fully compensate for the dividend of SEK 80m paid during the period, and group equity has therefore been reduced by SEK 13m, to SEK 1,262m, since year-end. Parent company The parent company's rental income for the period totalled SEK 422m (274m) and its pre-tax profit SEK 89m (115m). During the last quarter of 2000 seven subsidiaries merged with the parent company, affecting the comparison with the previous year. Investments for the period amounted to SEK 500m (344m), of which SEK 477m related to property acquisitions. The parent company's net debt at 30 June was SEK 4,183m (2,459m). Dividend policy Under the dividend policy adopted by the Board, around 75% of profit after tax during the year concerned (excluding profits from property sales) is earmarked for dividend. The Board does not intend to change this policy. Forecast In the light of profits for the first half-year, pre-tax profit for the year is expected to reach around SEK 170m. This profit forecast represents earnings per share of SEK 6.15 (8.02), and is SEK 10m higher than the forecast made previously, owing mainly to profits from property sales. The figure may be adjusted further as a result of profits from additional property sales during the year. Stockholm, 7 August 2001 Anders Johansson Managing Director This interim report has been subjected to an overview examination by the company's auditors. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/07/20010807BIT00190/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/08/07/20010807BIT00190/bit0001.pdf The full report