Interim Report 1 January - 30 September, 2000

Interim Report 1 January - 30 September, 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 127.0 million (112,6) ¤ The property management profit increased 17% to SEK 67.0 million (57.1) ¤ The profit per share is SEK 6.88 (5.95), an increase of 16% Hans Wallenstam, Managing Director, comments: "The property and rental markets in our regions continue to be very strong. We are now showing stable profit growth in our day-to-day business activities and we will achieve our objective of a SEK 100 million profit from property management before depreciation. My assessment is that we will continue to generate profit growth and that our markets will develop favourably for us." Interim Report 1 January - 30 September, 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 127.0 million (112.6), which is equivalent to a profit per share of SEK 6.88 (5.95). The current value of Wallenstam's share of the insurance company SPP's surplus amounts to SEK 2.9 million and this has been included in the profit for the period. Property management The Group's rental income during the period increased to SEK 561 million (549). This increase is primarily due to the acquisition of properties and reletting in newly acquired properties. The profit margin rose to 63.0% (61.5). The rental level on 30 September was 97%, which is 2% higher than at the beginning of the year. Interest subsidies during the period amounted to SEK 2.6 million (7.5) at the same time as interest expenses dropped to SEK 225 million (229). The profit on property management after net financial items, but before depreciation on properties, was SEK 92.2 million (78.7), 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 17% to SEK 67.0 million (57.1). Property business During the period, Wallenstam sold six properties for a total of SEK 146 million (530). In 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 61.2 million (56.9).The total selling price was higher than the value of the properties, according to Wallenstam's internal valuation principles, at the end of last year. Four of the properties were sold to tenant-owners' associations, a project in Gothenburg and three 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 September, a fourth property in Stockholm was sold to a tenant-owners' association and four residential properties in Gothenburg were sold to a private property owner. Investments During the period, Wallenstam paid a total of SEK 50 million (107) for two office properties in Gothenburg. A total of SEK 218 million (190) was invested in building and construction during the period. The majority of these investments were related to refurbishment of properties in Gothenburg and Stockholm. On 1 December, Wallenstam will take over two large groups of residential properties (approx. 75,000 m2) in Gothenburg acquired for SEK 501 million. Property portfolio On 30 September, Wallenstam's total floor space amounted to 1,075,607 m2. The book value of the properties is SEK 6,136 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 September, based on the valuation carried out at the end of last year and adjusted for this year's acquisitions, construction and sales, was SEK 7,597 million (7,441). The property value per share was SEK 431 (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 5,219 million (SEK 5,121). The average interest rate was 5.84% (5.82%). On 30 September, equity totalled SEK 900 million, which is equivalent to SEK 51.07 (47.78) per share. The reported equity ratio was 14.2% (14.4) and the adjusted equity ratio, based on the valuation carried out on 31- 12-1999, was 30.3% (30.8). Both equity and the equity ratio were affected by the redemption of shares for SEK 89 million, the payment of a dividend of SEK 22 million and the repurchase of Wallenstam shares for SEK 20 million. The Group's available liquid funds, including unutilised bank draft facilities, amounted to SEK 81 million (167). Net worth per share was SEK 134 (126). The share Wallenstam's Series B shares have been quoted on the Stockholm Stock Exchange since 1984. There are about 4,600 shareholders. The share price on 30 September was SEK 56.50 (47.50). The net asset value of SEK 134 per share is valued at 42%. 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 repurchase a maximum of 10% of the outstanding shares. During the third quarter, Wallenstam repurchased 372,020 of its own shares, which is equivalent to about 2 per cent of the outstanding shares. Environment The preliminary study of the environmental impact of our business operations carried out last winter has resulted in a draft environmental policy. This environmental policy will form the basis of continuing intensive work on environmental questions. Parent Company The Parent Company's rental income for the period amounted to SEK 9.6 million (9.6) and the profit after tax was SEK 4.1 million (14.1). The future Wallenstam anticipates a property management profit of at least SEK 100 million before depreciation, which is the Group's profit objective for 2000. Gothenburg, 14 November, 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: +46-31 200 000 or +46-705 17 11 42), 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/2000/11/14/20001114BIT00330/bit0001.doc The full report http://www.bit.se/bitonline/2000/11/14/20001114BIT00330/bit0002.pdf The full report