Sponda's net profit for the first nine months of the year totalled EUR 22.3 (93.4) million. Total revenue, derived from rental income, was EUR 74.7 (75.1) million. The operating profit was EUR 45.9 (112.2) million. Nine-month earnings per share (EPS) were EUR 0.28 (1.15) euroa. Financial income and expenses amounted to EUR -17.4 (-11.3) million.
Net operating income totalled EUR 57.0 (56.6) million. The gross margin of the property portfolio after depreciation was EUR 46.2 (44.6) million and its book value was EUR 1.0 billion. Shareholders' equity per share stood at EUR 6.23 (31 December 2002: EUR 6.81).
The operating profit in the comparable period, 1-9/2002, included a capital gain of EUR 67 million on the sale of the Itäkeskus Shopping Mall, and financial items included a one-time dividend payment to Sponda of EUR 7.9 million.
Financing
Interest-bearing net debt amounted to EUR 535.7 million (31 December 2002: EUR 456.7) and the equity ratio was 47 % (31 December 2002: 53 %). The average maturity of Sponda's credit lines was 2.2 years and the average interest rate was 4.4 %. Sponda had EUR 133 million in unused credit facilities.
Sponda's loan portolio was increased during the reporting period with the signing of five-year interest derivative contracts covering loan capital of EUR 100 million. The average interest-bearing period is 2.1 years.
Business conditions
The vacancy rate for office premises in the entire Helsinki Metropolitan Area (HMA) was 6.8 %. Commercial premises continued to be in tight supply and their vacancy rate was 1.4 %. The availability of logistical premises has increased slightly but their vacancy rate was 1.8 %.
Leasing activities
Net operating income from Sponda's properties totalled EUR 57.0 (56.6) million, of which 52 % was derived from Helsinki CBD, 21 % from Helsinki Metropolitan Area, 17 % from Logistics Properties and 10 % from the rest of Finland. The economic occupancy rate of Sponda's entire property portfolio at the end of September was 88 % (30 June 2003: 89 %).
On 30 September 2003 the economic occupancy rate of Sponda's properties was as follows: in Helsinki CBD 89 % (30 June 2003: 91 %); in Helsinki Metropolitan area 85 % (30 June 2003: 83 %); in Logistics Properties 87 % (30 June 2003: 87 %); and in the rest of Finland 94 % (30 June 2003: 94 %). By type of premises the economic occupancy rate was 87 % for office space, 98 % for commercial space, 87 % for logistical space and 94 % in the rest of Finland.
Property sales and purchases
Sponda sold holdings totalling EUR 10.4 million during the first nine months of the year, recording a total profit of EUR 2.7 million on these transactions.
Sponda did not purchase any properties during the period.
Property development
Sponda's strategy is to develop properties and the working environments they provide. Sponda focuses on large entities.
Work on modernizing Sponda's City-Center complex has started at the tunnel level where a shopping arcade of ten new commercial premises and covering approximately 1,100 square metres of retail space was opened for business in October. The entire City-Center commercial and office project is scheduled for completion in 2007-2008. Renewal of the City-Center and the conversion of Keskuskatu street into a pedestrian-only precinct will require the construction of a separate service tunnel. The aim is to put the rezoning plan before the city council next spring.
Renovation of the approx. 20,000 square metre multipurpose office building called Upseerin Avec in Leppävaara is complete and marketing of new leases has started well. 8 leases, covering approx. 5 000 square metres, have been signed since the start of the year.
Personnel
The Sponda Group had 53 (51) employees on average between January and September 2003, which included 52 (49) employed by the parent company Sponda Plc. Personnel numbered 53 (52) on 30 September, including 52 (51) in the parent company.
Group structure
Sponda Group comprises the parent company and its wholly owned mutual property companies.
Share performance
Sponda's share price rose during the third quarter to total EUR 5.35 at the close of the period. The average price between January and September was EUR 5.28, the lowest price being EUR 4.20 and the highest price EUR 6.00. Sponda's market capitalization at the close of the period was EUR 418 million.
Board of Directors and CEO
The Board of Directors comprises the following: Heikki Bergholm, President, Suominen Yhtymä Oyj; Maija-Liisa Friman, President, Vattenfall Oy; Jarmo Laiho, Head of Group Finance and Senior Vice President, Nordea AB (publ); Harri Pynnä, Legal Counsel, Fortum Oyj; Anssi Soila, MSc (Eng., Econ.); and Jarmo Väisänen, Ministry of Finance. The chairman of the Board is Anssi Soila and the deputy chairman is Jarmo Väisänen. President and CEO of the company is Kari Kolu.
Auditors
Sponda Plc's auditors are Sixten Nyman APA and KPMG Wideri Oy Ab. The deputy auditor is Ari Viitala APA.
Subsequent events
On 1 October 2003 Sponda Plc sold its Kiinteistö Oy Lönnrotinkatu 29 (Vanha Poli) property for EUR 6.4 million to La Tour Securities Oy, part of the Palace group. Sponda will enter a profit of approximately EUR 3 million on this sale in its fourth-quarter accounts.
Prospects
Demand for leased office premises is expected to weaken further during the remainder of the year whereas demand for commercial and logistical premises will not change. Sponda's result of leasing operations is forecast to remain at the level in 2002.
Financial bulletins during 2004
Sponda will publish its 2003 financial statements bulletin on Wednesday 4 February 2004. The Annual General Meeting will be held on Wednesday 7 April 2004. The interim reports in 2004 will be published on Thursdays 6 May 2004, 5 August 2004 and 28 October 2004.
30 October 2003
Sponda Plc
Board of Directors
Further information: Kari Kolu, President and CEO, Sponda Plc, tel. +358-9-6805 8202,
Sari Aitokallio, CFO, Sponda Plc, tel. +358-9-6805 8206
The full report including tables can be downloaded from the enclosed link.
