Interim Report 1 January - 30 June, 2000

Interim Report 1 January - 30 June, 2000 (Comparative figures in brackets refer to the corresponding period last year with the exception of the sections dealing with assets and financing where the figures in brackets refer to 31-12-1999.) * The profit after tax rose to SEK 87.4 million (80.1) * The property management profit increased 35% to SEK 31.2 million (23.1) * The profit per share increased to SEK 4.86 (4.23) Hans Wallenstam, Managing Director, comments: "The figures in the 6-month report are well in line with our objective of achieving a property management result of SEK 100 million for 2000. Demand for our commercial floor space in Gothenburg increased during the period, which will enable us to raise rents and, gratifyingly, to begin planning new office projects in the Gothenburg region. During the year, we have sold a number of centrally located residential properties to tenant- owners' associations at very good profits. Additional sales to tenant-owners' associations will be made in the months immediately ahead. The future thus continues to be bright and this makes our work on a new business concept for the years ahead very exciting." Interim Report 1 January - 30 June, 2000 Operations Wallenstam is a property company with properties in Gothenburg, Stockholm and Helsingborg. Its property portfolio consists mainly of residential properties, but with a large proportion of commercial properties in Gothenburg. The properties are in central locations or in attractive suburbs. Since 1996, Wallenstam's objective has been to increase its profit from property management, before depreciation, to SEK 100 million by the year 2000. Wallenstam's assessment is that the necessary conditions exist for this target to be reached. Profit The profit after tax rose sharply to SEK 87.4 million (80.1), which is equivalent to a profit per share of SEK 4.86 (4.23). The current value of Wallenstam's share of the insurance company SPP's surplus amounts to SEK 2.9 million. This income was recorded in its entirety during the second quarter. Property management The Group's rental income during the period increased to SEK 373 million (371). This increase is primarily due to reletting in newly acquired properties. The profit margin rose to 59.9% (57.8). The rental level on 30 June was 96%, which is 1% higher than at the beginning of the year. Interest subsidies during the period amounted to SEK 1.8 million (5.6) at the same time as interest expenses dropped to SEK 152 million (157). The profit on property management after net financial items, but before depreciation on properties, was SEK 47.9 million (37.7), which can be compared with the profit objective of SEK 100 million for the full year. The profit on property management after net financial items rose 35% to SEK 31.2 million (23.1). Property business During the first half of the year, Wallenstam sold five properties for a total of SEK 131 million (530). In the second half of 1999, Wallenstam sold all its properties in Malmö for SEK 527 million, which is the reason for the drop in sales. The profit posted by the property operation amounted to SEK 57.0 million (57.9). Three of the properties were sold to tenant-owners' associations, a project in Gothenburg and two properties in Stockholm. The profit this year is mainly due to Wallenstam having taken advantage of the large demand for tenant-owner apartments. Wallenstam intends to continue to follow its current strategy with further sales to tenant-owners' associations during the year. After 30 June, a third property in Stockholm was sold to a tenant-owners' association. The total selling price was 66% higher than the value of the properties, according to Wallenstam's internal valuation principles, at the end of last year. Investments During the period, Wallenstam paid a total of SEK 50 million (70) for two office properties in Gothenburg. A total of SEK 117 million (149) was invested in building and construction during the period. The majority of these investments were related to refurbishment of properties in Gothenburg and Stockholm. Property portfolio On 30 June, Wallenstam's total floor space amounted to 1,076,675 m2. The book value of the properties is SEK 6,057 million (5,962). No valuation of the properties is made during the business year; instead, Wallenstam carries out an internal valuation of its properties at the end of each year. The market value on 30 June, based on the valuation carried out at the end of last year and adjusted for this year's acquisitions, construction and sales, was SEK 7,509 million (7,441). The property value per share was SEK 417 (393). The demand for Wallenstam's residential accommodation and commercial premises remains high. In Gothenburg, there is further scope for rent increases on commercial premises and the Company's assessment is that the potential for reducing the vacancy rate is very good. Financial position At the end of the period, Wallenstam's total volume of loans amounted to SEK 5,207 million (SEK 5,121). The average interest rate fell to 5.71% (5.82%). On 30 June, equity totalled SEK 880 million, which is equivalent to SEK 48.92 (47.78) per share. The reported equity ratio was 14.0% (14.4) and the adjusted equity ratio, based on the valuation carried out on 31-12-1999, was 30.1% (30.8). Both equity and the equity ratio dropped as a result of the redemption of shares for SEK 89 million and payment of a dividend of SEK 22 million. The Group's available liquid funds, including unutilised bank draft facilities, amounted to SEK 162 million (167). Net worth per share was SEK 130 (126). The share Wallenstam's Series B shares have been quoted on the OTC list at the Stockholm Stock Exchange since 1984. There are about 4,600 shareholders. The share price on 30 June was SEK 42.30. Accordingly, the reported equity is valued at 86% and the net asset value of SEK 130 per share is valued at 33%. After the completion of the share redemption program on 12 May, the number of shares amounts to 17,990,563. Wallenstam's Board of Directors has been given a mandate by the Annual General Meeting, up until the next annual general meeting, to redeem a maximum of 10% of the outstanding shares. At the Annual General Meeting, Erik Åsbrik was elected to the board of directors. Environment The preliminary study of the environmental impact of our business operations has resulted in a draft environmental policy. This environmental policy will form the basis of continuing intensive work on environmental questions. The future Wallenstam anticipates a property management profit of SEK 100 million before depreciation, which is the Group's profit objective for 2000. Wallenstam is currently working on further developing and refining its business concept, together with its strategy and objectives for the next 5-year period. This business concept will be presented in the autumn. Gothenburg, 22 August, 2000 Hans Wallenstam Managing Director This Interim Report has not been examined by Wallenstam's accountants. For further information, please contact Thomas Dahl, Director of Marketing and Information (phone: +46 (+46-31 200 000), or Lennart Ekelund, Chief Financial Officer (phone: +46-31 200 000 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/22/20000822BIT00630/bit0001.doc The full report http://www.bit.se/bitonline/2000/08/22/20000822BIT00630/bit0002.pdf The full report