Sponda's net profit for the first six months of the year totalled EUR 16.7 (86.5) million. Total revenue, derived from rental income, was EUR 50.0 (50.0) million. The operating profit was EUR 31.7 (97.0) million. Six-month earnings per share (EPS) were EUR 0.21 (1.07). Financial income and expenses amounted to EUR -11.4 (-5.5) million.
Net operating income totalled EUR 38.1 (37.5) million. The book value of Sponda's property portfolio was EUR 1.0 billion. Shareholders' equity per share stood at EUR 6.16 (31 December 2002: EUR 6.81). The operating profit in the comparable period, 1-6/2002, 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 538.7 million (31 December 2002: EUR 456,7 million) and the equity ratio was 46.7 % (31 December 2002: 52.9 %). The average maturity of Sponda's credit lines was 2.5 years and the average interest rate was 4.3 %. Sponda had EUR 110 million in unused credit facilities.
Sponda's loan portfolio 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 2.3 years.
Business conditions
The vacancy rate for office premises in the Helsinki Metropolitan Area (HMA) has remained at slightly below 6 %. Demand for commercial and logistical premises continued to be stable and their vacancy rate has stayed low.
Leasing activities
Net operating income from Sponda's properties totalled EUR 38.1 million (37.5), of which 50.7 % was derived from Helsinki CBD, 20.7 % from Helsinki Metropolitan Area, 18.1 % from Logistics Properties and 10.5 % from the rest of Finland. The economic occupancy rate of Sponda's entire property portfolio at the end of June was 88.9 % (31 March 2003: 89.7 %).
On 30 June 2003 the economic occupancy rate of Sponda's properties was as follows: in Helsinki CBD 91.4 % (31 March 2003: 92.9 %); in Helsinki Metropolitan area 83.3 % (82.7 %); in Logistics Properties 87.1 % (88.1 %); and in the rest of Finland 93.6 % (93.3 %).
Property sales and purchases
In April 2003 Sponda sold the 4000 m2 property at Kelloportinkatu 2 in Tampere for EUR 8 million, recording a profit of EUR 2.4 million.
Sponda also sold other holdings in properties at the start of the reporting period for EUR 2.4 million, recording a profit on these transactions of EUR 0.3 million.
Sponda did not purchase any properties during the first six months of the year.
Property development
Sponda's strategy is to develop properties and the working environments they provide. Sponda focuses on large entities.
Work on modernizing the City-Center complex in Helsinki city centre, converting it into a commercial and office site covering some 53,000 m2, continues. The first commercial premises, with an area of roughly 1,100 m2, will be opened in September 2003.
Marketing of the approx. 20,000 m2 multipurpose office building in Leppävaara under the name Upseerin Avec started in June 2003. Upseerin Avec clients are offered a wide range of services from a reception to a canteen and fitness centre.
Personnel
The Sponda Group had 52 (51) employees on average between January and June 2003, which included 51 (49) employed by the parent company Sponda Plc. Personnel numbered 52 (50) on 30 June, including 51 (49) in the parent company.
Group structure
Sponda Group comprises the parent company and its wholly owned subsidiaries. With the exception of Tamsoil Oy, these are mutual property companies.
Share performance
Sponda's share price rose at the end of the reporting period to the same level in the first quarter and the closing price at the end of June was EUR 5.20. The average price between January and June was EUR 5.26, 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 406 million.
Purchase of own shares
The Annual General Meeting in April 2003 authorized the Board of Directors to purchase at most 3,500,000 of the company's own shares within one year of the meeting. This authorization was not exercised during the reporting period.
The meeting also authorized the Board of Directors for one year from the AGM to surrender the company's shares purchased by the company. The Board may surrender at most 3,500,000 shares purchased by the company. Neither has this authorization been exercised.
Board of Directors and CEO
The Board of Directors comprises the following: Heikki Bergholm, Maija-Liisa Friman, Jarmo Laiho, Harri Pynnä, Anssi Soila, and Jarmo Väisänen. 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.
Prospects
Economic growth is forecast to remain slow during 2003. Demand for leased business premises is expected to decline, but Sponda's result from leasing operations in 2003 should still stay at 2002 levels.
7 August 2003
Sponda Plc
Board of Directors
Further information: Kari Kolu, President and CEO, Sponda Plc, tel. +358-9-6803 8202, CFO Sari Aitokallio, tel. +358-9-6805 8206
The full report with tables can be downloaded from the following link:
