STOCKHOLM, Sweden, Jan. 28, 2002 (PRIMEZONE) -- AB Custos:
-- The Board proposes redemption of every second share for
payment of SEK 200 per redeemed share.
-- A dividend amounting to SEK 14.50 (16.50) per share
is proposed
-- The total return on Custos' shares during 2001 was 0.8 percent.
CEO's comments: Two thousand one was another weak stock market year. Although Stockholmsborsen (formerly the OM Stockholm Stock Exchange) recovered part of its decline late in the year, Custos' comparative index, the SIX Portfolio Return Index, ended at -11.5 percent. Compared to Stockholmsborsen as a whole, Custos performed well with a total return of 0.8 percent.
Two large sources of satisfaction were SCA and Perbio, where Custos' holdings were distributed to its shareholders in the spring and autumn, respectively. The shares of both companies rose sharply during the year, while the performance of Pergo, Christian Salvesen and C. Tybring-Gjedde was a disappointment.
Looking at Custos' own shares, the discount on net asset value rose somewhat during the year -- from 7 percent to 10 percent. which is unsatisfactory even if this level is low in a historical perspective.
The fact that Custos is still traded at a discount, despite the fact that the company has distributed assets equivalent to more than SEK 11 billion since 1996, is to some extent a rejection of investment companies as a form of enterprise. However, Custos will continue to transfer assets to its owners. The Board proposes that a total of MSEK 1 554 be transferred to the shareholders during the spring via the dividend and share redemptions. Transfer of funds to the shareholders through redemption, dividend and synthetic repurchase is a good way to maximize the shareholders' value today. As long as the discount continues, new investments will always be weighed against the return that shareholders may instead receive via a distribution of capital or assets or through buy-backs of shares.
Because Custos' capital base has diminished, its future strategy will change to some extent. The management expenses of the Company have been lowered. Among other things, the number of employees has been decreased from fourteen to eight, and office space has been substantially reduced. Custos' new investments will mainly be of a financial nature, meaning that in most cases the Company will neither aim at becoming a main shareholder and nor request representation on the board of directors. In addition, Custos will place greater emphasis on the liquidity of the shares it acquires. However, Custos will continue to be closely involved in the companies that are now in its portfolio and work for value maximization.
In line with the new strategy, Custos carried out some minor adjustments in its portfolio during the fourth quarter. The Company reduced its exposure to SCA and implemented some small financial investments. These adjustments mean that Custos now has a more balanced investment portfolio.
Custos is in a good starting position for 2002. The Company has an investment portfolio with good value potential.
Total return
Total return on Custos shares, taking into account share price appreciation, dividend paid and redemption of shares was 0.8 percent.
Return in 2001
%
Total return on Custos shares (a) 0.8
Cost of shareholders' equity (b) 8.1
SIX Portfolio Return Index -11.5
SIX Return Index -14.8
Morgan Stanley World Index (c) -17.8
(a) Return taking into account share price appreciation and, where
appropriate, dividend paid and share redemption (reinvested).
(b) Measured as the average 12-month Swedish Treasury bill rate plus
a risk premium of 4 percent.
(c) MSCI Indices U.S.$ World Index.
In this Interim Report, total net asset value, net asset value per share etc. on December 31, 2001 are calculated on the assumption that the SCA shares that comprised payment in the previous redemption program that was completed during 2001 had been distributed to Custos' shareholders on December 31, 2000. An Extraordinary General Meeting on December 5, 2000 approved this redemption in principle.
However, the Consolidated and Parent Company Condensed Balance Sheets on December 31, 2000 include these SCA shares, because the approval and registration of Custos' redemption of ordinary shares with payment in the form of SCA shares was not completed until early in 2001.
For further information, see the Custos Annual Report for 2000. This Preliminary Report is published in Swedish and English. In the event of any difference between the English version and the Swedish original, the Swedish version shall govern.
The full text report with all financial tables is available at the following URLs:
www.waymaker.net/bitonline/2002/01/28/20020128BIT00500/bit0002.doc www.waymaker.net/bitonline/2002/01/28/20020128BIT00500/bit0002.pdf
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