Published: 2003-08-28 07:30:11 CEST
Citycon Oyj
Quarterly report
CITYCON'S INTERIM REPORT, 1 JAN. ? 30 JU
Citycon Oyj Stock Exchange Release, 28 Aug. 2003 at 9.30am

CITYCON'S INTERIM
REPORT, 1 JAN. – 30 JUNE 2003
- Profit before extraordinary items and taxes
was EUR 9.9 
million (EUR 10.4 million). This figure includes EUR 0.1

million in losses on sales of fixed assets (capital gains 
EUR 0.4 million).

- Turnover was EUR 38.7 million (EUR 39.8 million). 
- Earnings per share
were EUR 0.07 (EUR 0.07).
- Demand for commercial premises and occupancy rates

continued to be strong. 

KEY INDICATORS
                        1-6 2003 
   1-6 2002     1-12 2002
Turnover, EUR million       38.7         39.8       
  79.0
Operating profit,
EUR million                 21.6         22.8       
  43.9
% of turnover               55.8         57.3          56.6
Profit
before extraordinary
Items and taxes, EUR million 9.9         10.4         
19.2
% of turnover               25.5         26.1          24.2
Number of
employees                                  
30 June, 2003                 36  
        33            33

Earnings per share, EUR     0.07         0.07      
   0.14
Equity per share, EUR       1.94         1.90          1.96
Return on
equity, %          5.0          5.3           4.8
Return on equity
excluding
minority interest, %         7.3          7.8           7.1
Return
on investment, %      6.0          6.2           6.0
Equity ratio, %          
  48,3         47,3          48,4
Equity ratio with loan 
not counted as part
of
shareholder's equity, %     39,1         38,1          39,1
Net rental
income of 
property portfolio, %        8.4          8.6          
8.6
Financial occupancy rate
of commercial property, %   97.1         98.0   
      97.8

TREND IN THE BUSINESS ENVIRONMENT 
Private consumer demand in
Finland remained at a higher 
level than in the rest of the euro area.
Although growth in 
retail sales has slowed since last year, growth was still

strong during the period under review: according to 
Statistics Finland, in
the January-June period department 
store trade was up by 5.1 per cent and
grocery trade was up 
by 3.7 per cent on the same period last year.
The
favourable trend in retail sales held up the strong 
demand for commercial
property, particularly in the 
Helsinki Metropolitan Area and Finland's other
major 
cities. Rental demand for retail premises in central 
locations
remained strong during the period under review. 
Vacancy rates for commercial
property in the Helsinki 
Metropolitan Area held steady at the same rate as in
the 
early months of the year.

The differences between commercial and
office premises in 
terms of demand continued to be substantial during the

period under review. Demand and rents for office premises 
have not
improved, and there is still a great deal of 
vacant office space in the
Helsinki Metropolitan Area.

CUSTOMERS AND THE TREND IN THE PORTFOLIO OF
LEASES
There were no significant changes in Citycon's customer 
structure and
its portfolio of leases during the period 
under review. At the end of the
period under review Citycon 
had 700 lessees, with whom 1,124 leases had been
signed. 
The average duration of the leases was 3.8 years. During 
the period
under review, the company signed a total of 84 
leases, 62 of which were for
premises in shopping centres 
and 22 were for supermarkets and shops.

Of
the leases signed for premises in Citycon's shopping 
centres, 41 were with
new customers and 21 were extensions 
signed with old lessees. The total area
covered by the 
leases signed was 7,076 square metres. The main new leases

negotiated were in Tampereen Koskikeskus (750 square 
metres) and Rovaniemen
Sampotalo (544 sq.m.). The financial 
occupancy rate of the shopping centres
at the end of the 
period under review continued to be strong at 97.1 per

cent. The leases have an average validity of 3.1 years.

Of the leases
signed for premises in Citycon's supermarkets 
and shops, 14 were with new
customers and 8 were extensions 
signed with old lessees. The total area
covered by the 

leases signed was 5,308 square metres. The financial

occupancy rate of the supermarket and shop premises 
continued to be good,
and at the end of the period under 
review it was 96.6 per cent. The leases
have an average 
validity of 4.6 years.

RENTAL INCOME
Of Citycon's rental
income, roughly 70 per cent comes from 
leases signed with the 10 biggest
customers. The various 
Kesko chains are the most important group of
customers. 
Other important lessees include international utility goods

chains and companies in banking and finance.

Citycon's net rental income
from leasing business during 
the period under review totalled EUR 27.1
million (EUR 28.0 
million). Shopping centres' share of net rental income was

49.6 per cent (49.3%) and that of supermarkets and shops 
was 50.4 per cent
(50.7%).

The net rental income of the company's entire property 
portfolio
was 8.4 per cent (8.6%), calculated according to 
the recommendations of the
Finnish Institute for Real 
Estate Economics. The net yield rate for shopping
centres 
held steady at the rate in the early months of the year and

totalled 7.9 per cent (8.1%). The net yield rate for 
supermarkets and shops
also held steady at 8.9 per cent 
(9.2%). The financial rental occupancy rate
of Citycon's 
business premises was 97.1 per cent (98.0%).

TURNOVER AND
OPERATING PROFIT
Citycon's turnover during the period under review was EUR

38.7 million (EUR 39.8 million). Gross rental income 
accounted for EUR 36.1
million (EUR 37,1 million) of 
turnover. The 13 shopping centres and the 15
largest 
supermarkets that Citycon owns generated more than 75 per 
cent of
the income from the company's operations.

The operating profit for the
period under review was EUR 
21.6 million (EUR 22.8 million) and net profit
for the 
period was EUR 7.1 million (EUR 7.4 million). The net 
profit for
the period under review includes EUR 0.1 million 
in losses on sales of fixed
assets (capital gains EUR 0.4 
million).

BALANCE SHEET AND FINANCE
At the
end of the period under review, the book value of 
Citycon's property
portfolio was EUR 644.2 million. The 
number of properties was 149, of which
13 were shopping 
centres and 136 were supermarket or shop premises. The

balance sheet total as at 30 June 2003 was EUR 742.7 
million (EUR 748.7
million), of which liquid cash assets 
were EUR 12.2 million (EUR 9.2
million). 

The Group's financing situation remained good during the 
period
under review. At the end of the period under review, 
Citycon had a total of
EUR 381.7 million (EUR 392.3 
million) of liabilities. Interest-bearing debt
stood at EUR 
440.3 million (EUR 446.6 million), of which equity loan was

EUR 68.5 million (EUR 68.5 million). Financing expenses 
were down to EUR
12.0 million (EUR 12.6 million). The 
average interest rate for debt was 5.4
per cent (5.5%). The 
average borrowing period was approximately 4.4 years
(5.5 
years) and the average interest-rate fixing period was 4.4 
years (4.3
years). The Group's equity ratio was 48.3 per 
cent (47.3%). With the equity
loan not included in 
shareholders' equity, the equity ratio was 39.1 per cent

(38.1%).

Of Citycon's debt portfolio, 84 per cent was floating rate

loans, of which 75 per cent has been converted to fixed 
rate by means of
interest rate swaps and 15 per cent has 
been hedged with interest rate caps.
The par value of the 
interest rate swaps at the end of the period under
review 
was EUR 277 million and that of the interest rate caps was 
EUR 54
million. The debt management margin, i.e., the 
previous twelve months' profit
before interest expenses, 
taxes and depreciation in proportion to net
financing 
expenses, was 2.1.

Citycon's gross investments of the period
under review 
totalled EUR 0.9 million (EUR 4.9 million). The investments

focused on general major renovations and conversions of 
buildings as well
as planning for development projects.

BUSINESS DEVELOPMENT PROJECTS

Citycon is focusing its property portfolio in Finland's 
biggest cities.
Through its development and improvement 
projects, the company aims to achieve
an increasingly 
strong position as a provider of the best business premises

and as a long-term partner for customers. Citycon has 
separated its
operations into three divisions on the basis 
of customer relationships:
Shopping Centres, Supermarkets 
and Shops, and the Retail Park
Division.

The Retail Park Division, which was founded at the 
beginning of
the year, is responsible for the planning, 
development and marketing of new
retail centres. The Retail 
Park Division also participates in the planning of

extensions and developments of existing shopping centres, 
supermarkets and
shops.

During the period under review, the Retail Park Division 
continued
to investigate the commercial framework for new 
shopping centres in the
Helsinki Metropolitan Area and in 
the Tampere and Turku market zones. Citycon
deployed effort 
in the processes of land acquisition and zoning according

to plan during the period under review.

The Shopping Centres Division
continued the implementation 
of a project for an extension to the IsoKarhu
shopping 
centre, which was started in the first quarter of the year. 
The
project advanced to the construction stage and it is 
scheduled for completion
in August 2004. Demand for the new 
premises for lease has been brisk and 75
per cent of them 
have already been leased out. The extension will enhance

IsoKarhu's market position, boost the number of visitors to 
the shopping
centre and its annual sales. Also during the 
period under review, the
Shopping Centres Division 
continued to plan extensions to the shopping
centres 
Myyrmanni in Vantaa and Lippulaiva in Espoo, which were 
started in
2002.

The Supermarkets and Shops Division launched a development 
project
for the Citymarket in Pori in partnership with the 
lessee. Citycon has the
aim of developing the property 
jointly with the lessee to make it better
fitted to today's 
standards for retailing. Also during the period under

review, the division carried out major renovations on 
properties and other
conversion work required for the 
customers' business.
 
During the period
under review, in accordance with its 
selling programme, Citycon sold off four
properties in 
their entirety and reduced its holdings in two properties.

Citycon did not carry out any acquisitions of the property 
portfolio during
the period under review.

PERSONNEL 
At the end of the period under review,
the Citycon Group 
had a total of 36 (33) employees, of whom 29 (27) were

employed by the parent company.

ANNUAL GENERAL MEETING
The resolutions of
Citycon's annual general meeting of 
shareholders held on 20 March 2003 were
reported in the 
interim report of 8 May 2003. At the end of the period

under review, all the authorisations granted by the AGM 
were unused in
their full amounts.

CITYCON SHARES AND HOLDINGS
Citycon's share capital at
the end of the period under 
review was EUR 142,800,108.30 and the number of
shares was 
105,777,858. The par value of a share is EUR 1.35.

During the
period under review, the total for Citycon 
shares traded on the Helsinki
Exchanges was 4.6 million 
shares and EUR 4.9 million. The high price quoted
during 
the period was EUR 1.16 and the low was EUR 1.00. The 
weighted
average price for the period was EUR 1.07 and the 
last traded price on the
last trading day of the period (30 
June 2003) was EUR 1.08. The company's
market 
capitalisation at the end of the period under review was 
EUR 110.1
million, when company-held shares are deducted 
from the total.

At the end
of the period under review, the company had a 
total of 1,164 shareholders.
The ten biggest shareholders 
held a total of 81.9 per cent of the company's
shares and 
voting rights. The biggest shareholders were Nordea Bank 
Finland
Plc, Kesko Corporation together with its 
subsidiaries and associated
companies, Sampo Life Insurance 
Company Limited and Etra Invest Oy Ab; in
total, these held 
78.0 per cent of the company's shares and voting rights.

The number of nominee-registered and foreign-held shares 
was 3,700,629,
being 3.5 per cent of the shares and voting 
rights.

Citycon Oyj held
3,874,000 of its own shares at the end of 
the period under review. The total
purchase price of the 
shares was EUR 4,675,812.76, with the lowest price per

share being EUR 1.10 and the highest EUR 1.35. The company-
held shares
represent 3.7 per cent of all shares and voting 
rights. The book value of
company-held Citycon shares on 30 
June 2003 was EUR 4.2 million. The shares
have been valued 
at the closing price of the period under review, which is

lower than the original acquisition cost.

OUTLOOK FOR THE FUTURE
Citycon
forecasts that demand, occupancy rates and rental 
levels for commercial
premises will remain good in the 
Helsinki area and Finland's other major
cities. The company 
estimates that the turnover and net profit for the whole

year will be on a par with the figures for 2002.

Helsinki, 28 August
2003
Citycon Oyj
Board of Directors

EUR 1000
                          
1-6 2003    1-6 2002   1-12 2002
CONSOLIDATED INCOME STATEMENT

Turnover    
                38,690      39,760      78,950
Other income                  
-140         705         735
Operating profit             21,596      22,790  
   43,895
Financing expenses (net)    -11,746     -12,404     -24,715
Profit
before extraordinary 
items and taxes               9 850      10,386     
19,180
Net profit for the period
under review                  7,140      
7,444      13,801

CONSOLIDATED BALANCE SHEET

Assets
Fixed
assets
Intangible assets             4,066       3,888       4,036
Tangible
assets             621,314     629,666     625,508
Financial assets           
 97,251      98,034      97,710
Company shares                4,184      
4,068       4,261
Fixed assets, total         726,814     735,654    
731,515
Current assets
Debtors                       3,695       3,910      
3,088
Cash in hand and at bank     12,150       9,181      11,730
Current
assets, total        15,845      13,091      14,818
Assets, total             
 742,659     748,746     746,333

Liabilities and 
shareholders' equity

Shareholders' equity        201,938     197,492     204,045
Equity loan     
            68,452      68,452      68,452
Minority interest            90,567
     90,454      90,521

Liabilities                 381,702     392,347    
383,315
Long-term                   371,719     355,632    
371,769
Short-term                    9,983      36,715     
11,545
Liabilities and 
shareholders' equity, total 742,659     748,746    
746,333

Gross investments in balance
sheet fixed assets              926   
   4,884       5,854
as % of turnover                2,4        12,3        
7,4
Planned depreciation and
value adjustments             3,212       3,499 
     7,620
Employees, average               33          31          33

CASH
FLOW STATEMENT

CASH FLOW FROM OPERATING ACTIVITIES   
                     
                1-6 2003    1-12 2002
Profit/loss before 
extraordinary items
                     9,850       19,180
Adjustments:
Planned depreciation    
                3,211        7,620
Other income and expenses not 
involving a
payment                        204          283
Financing income and expenses 
         11,746       24,715
Other adjustments                          100   
     -448
Cash flow before change in 
working capital                        
25,112       51,350

Change in working capital:
Increase(-)/decrease (+) in
short-term
non-interest-bearing receivables           397          
19
Increase(-)/decrease (+) in short-term 
interest-bearing debts            
        779         -13
Cash flow from operating activities 
before financing
items and taxes        26,288      51,356

Interest paid and payments for
other financing
expenses of business operations        -14,471    
-23,814
Dividends received from business 
operations                         
        17          18
Interest received from business 
operations           
                     208         228
Direct taxes paid                      
-2,245      -3,626
Cash flow before extraordinary items     9,797     
24,162
Cash flow from operating activities A)   9,797      24,162

CASH FLOW
FROM INVESTMENTS:

Investments in tangible 
and intangible assets           
         -740      -1,943
Proceeds from the sale of tangible 
and intangible
assets                      109           0
Investments in other placements   
         -4          -9
Repayments of outstanding loans              1        
  3
Shares in subsidiaries purchased             0      -5,850
Shares in
subsidiaries sold                225       1,215
Shares in associated
companies purchased  -156      -1,320
Shares in associated companies sold     
  479       5,192
Interest received from investments           3         
59
Cash flow from investments B)              -84      -2,654

CASH FLOW
FROM FINANCING:

Fund payments by minority                   25         
78
Withdrawals of short-term loans              5          17
Repayments of
short-term loans               0      -7,105
Withdrawals of long-term loans   
           0       3,924
Repayments of long-term loans             -154     
-4,311
Dividend paid and other 
distribution of profit                 
-9,171      -8,152
Cash flow from financing (C)            -9,295    
-15,548

Change in cash assets (A+B+C) 
increase (+)/decrease (-)           
      418       5,960

Cash assets at start of 
accounting period           
           11,730       5,770

Cash assets at end of 
accounting period     
                12,150       11,730

FINANCIAL INDICATORS       1-6 2003   
1-6 2002   1-12 2002

EPS, EUR                       0.07        0.07       
0.14
Equity per share, EUR          1.94        1.90        1.96
Return on
equity (ROE), %       5.0         5.3         4.8
ROE excluding minority

interest, %                     7.3         7.8         7.1
Return on
investment (ROI), %   6.0         6.2         6.0
Equity ratio, %             
  48,3        47,3        48,4
Equity ratio, % (equity 
loan not counted 
as
shareholders' equity)       39,1        38,1        39,1

CONSOLIDATED
CONTINGENT LIABILITIES
Shares pledged
(book value)                 97,031    
 97,389      96,506
Shares in subsidiaries                  453,037
Other
pledges given           1,350         598         633
Mortgages on land
and
buildings               337,196      11,951     323,440

Interest rate swaps
2002
(2-year fixed interest)
par value of underlying
instrument             
     50,000                  50,000
market value of underlying
instrument    
               1,737                   1,491

Interest rate swaps
2002
(7-year fixed interest)
par value of underlying
instrument             
     66,000                  66,000
market value of underlying
instrument    
               7,406                   5,111

Interest rate swaps
2002
(8-year fixed interest)
par value of underlying
instrument             
     83,000                  83,000
market value of underlying
instrument    
               8,652                   5,418

Interest rate swaps
2003
(4-year and 5-month fixed 
interest)
par value of underlying

instrument                   78,200
market value of underlying 
instrument 
                    259

Interest rate option 1998 
(5-year interest
cap)
par value of underlying
instrument                                      
    78,712
market value of underlying
instrument                             
                  0

Interest rate swaps 2002
(2-year fixed interest)
par
value of underlying
instrument                   53,800                 
53,800
market value of underlying
instrument                        0        
              1

Derivatives have been valued at the market price on the

date of closing the books. The calculations comply with the 
Finnish
Financial Supervision Authority's requirements for 
credit institutions on the
valuation of derivatives in 
financial statements. The derivatives have been
used to 
hedge the loans against increases in interest rates.
The company
uses derivatives exclusively to reduce or 
eliminate risks in the balance
sheet.

COMPANY SHARES            1-6 2003     1-6 2002   1-12
2002

Acquired between 25 November 1999 and 30 June 2003
Number of shares,
1000       3,874        3,874       3,874
Total par value              5,230  
     5,230       5,230
Share of shareholders'
equity, %                     
3.7          3.7         3.7
Share of voting rights, %      3.7          3.7  
      3.7
Consideration paid           4,676        4,676      
4,676

Company shares have been valued at the closing price on 30 
June
2003. 

Other income includes capital gains on fixed assets, which 
were
previously shown as part of turnover. The figures for 
the comparison year
have been adjusted accordingly. 

The taxes used are taxes commensurate with
the net profit 
for the period under review.

The figures are
unaudited.


FINANCIAL REPORTING 
Citycon Oyj will publish its next interim
report, for the 
period January-September, on Thursday 30 October 2003.


For further investors' information, see Citycon's website

www.citycon.fi.

PRESS CONFEENCE
The company is to hold a briefing for
press and analysts on 
Thursday 28 August 2003, starting at 1.30 p.m. at
Citycon 
Oyj's premises at Pohjoisesplanadi 35 AB, Helsinki. 

CEO Petri
Olkinuora will address the meeting about 
Citycon's activities and performance
for the period under 
review and about the company's future prospects. The

presentation material will be available for reading after 
the conference on
Citycon's website at www.citycon.fi.

Further information:
CEO Petri
Olkinuora 
Tel. +358 9 680 36 738 or +358 400 333 256

petri.olkinuora@citycon.fi

Distribution:
Helsinki Exchanges
Main
media
www.citycon.fi