(Información remitida por la empresa firmante)
HELSINKI, Nov. 1, 2023 /PRNewswire/ — Citycon Oyj Interim Report 1 November 2023 at 21:00 hrs
CITYCON RESULTS SUMMARY:
FINANCIAL & KEY PERFORMANCE INDICATORS
Like–for-Like (‘LFL’) Net Rental Income
Excludes acquisitions, dispositions, development, and closed assets (Torvbyen)
Q1–Q3/2023, increased 6.9 % (comparable FX) vs. Q1-Q3/2022
Q3/2023, increased 7.0 % (comparable FX) vs. Q3/2022
Q2/2022 was positively impacted by several one-time benefits resulting in difficult year-to-date 2023 comparisons. Excl. these one-time items:
Q1–Q3/2023, increased 7.6 % (comparable FX) vs. Q1-Q3/2022
Standing Net Rental Income
Excl. four assets disposed in Norway in 2022
Q1–Q3/2023, increased 5.3 % (comparable FX) vs. Q1-Q3/2022
Q3/2023, increased 4.9 % (comparable FX) vs. Q3/2022
In addition to the Q2/2022 one-time items mentioned above, Q1-Q3/2023 was further impacted by the closing of Torvbyen in Norway. Excl. the adverse impact of these two combined items:
Q1–Q3/2023, increased 7.6 % (comparable FX) vs. Q1-Q3/2022
FX–rate impact to total NRI was EUR -8.8 million in Q1-Q3/2023
KPI’s
Q1–Q3/2023 LFL tenant sales +4.1 %
+9.3 % vs. Q1-Q3/2019 (pre-pandemic)
Q1–Q3/2023 LFL footfall +1.9 %
Q3/2023 retail occupancy 95.6 %
+10 bps vs. Q2/2023
+70 bps increase from Q3/2022
Q3/2023 collections were 98 %
Q2/2023 improved to 98 % from 97 %
Q1–Q3/2023 average rent per sqm increased EUR 1.4 to EUR 23.8 (comparable FX)
Q1–Q3/2023 positive leasing spread of 0.9%
Q3/2023 9.4 % LFL occupancy cost ratio
BALANCE SHEET
Liability Management
Replacement and extension of EUR 650 million credit facility in April 2023, incl. EUR 250 million term loan
Q1–Q3/2023 total notional bond and hybrid repurchases of EUR 236 million for EUR 212 million cash
Updated its EUR 400 million Commercial Paper programme into green format, and issued its first Green Commercial Paper
othe first ever Green Commercial Paper issued in the Finnish market
Advanced negotiations ongoing for approx. EUR 90 million secured loan
Fair Value
Q1–Q3/2023 net fair value change was essentially flat at EUR -5.7 million.
Q1–Q3/2023 fair value of investment properties decreased by EUR 49.7 million (-1.2%) mostly due to changes in FX rates.
oExcl. changes in FX rates, fair value of investment properties increased by EUR 52.1 million (+1.3%).
KEY FIGURES:
1) Standing portfolio key figures include only income and expenses from investment properties that were on group balance sheet on 30 September 2023. The portfolio is the same in the reporting period and in the comparison period, hence the numbers are comparable. Lippulaiva (opened on the 31st of March 2022) is included in the standing portfolio.
2) Citycon presents alternative performance measures according to the European Securities and Markets Authority (ESMA) guidelines. More information is presented in Basis of Preparation and Accounting Policies in the notes to the accounts.
3) The key figure includes hybrid bond coupons and amortized fees.
4) Change from previous year (comparable exchange rates). Change-% is calculated from exact figures.
1) The numbers include the sale of four investments properties during the previous year.
2) Change from previous year (comparable exchange rates). Change-% is calculated from exact figures.
3) Citycon presents alternative performance measures according to the European Securities and Markets Authority (ESMA) guidelines. More information is presented in Basis of Preparation and Accounting Policies in the notes to the accounts.
4) The key figure includes hybrid bond coupons, amortized fees and gains and expenses on hybrid bond repayments.
5) The key figure includes hybrid bond coupons and amortized fees.
6) The effect of currency rates to EPRA NRV/share was EUR -0.35.
CEO F. SCOTT BALL:
We continue to see strong performance in our business fundamentals as like-for-like tenant sales were 4.1% above Q1-Q3/2022 and 9.3% above Q1-Q3/2019 pre-pandemic levels. We also are seeing more customers in our centres as like-for-like footfall increased 1.9% compared to the previous year. Retail occupancy is now at 95.6%, up 70 bps versus the same quarter last year. At the same time, average rent per square meter, with comparable FX rates, increased by 1.4 EUR/s.qm. (5.9% to 23.8 EUR per sq.m.) in Q1-Q3/2023. We continue to benefit from a low occupancy cost ratio of 9.4%, which together with increasing tenant sales and improving footfall, positions Citycon for continued compounding rent growth and service charge increases. Sales increases keeping pace with inflation were evident in our continued high collection rates of 98% in Q3/2023, with Q2/2023 collection improving to 98%. These metrics supported our underlying asset values where a net fair value gains are relatively flat year-to-date, reflecting the impact of compounding rent growth due to indexation linked leases (93% of our leases), offsetting pressure on increasing yields due to a higher interest rate environment.
The net effect of these strong KPI’s is that like-for-like net rental income grew 7.0% in the third quarter, in comparable FX. As previously noted, in the first three quarters of this year there has been adverse volatility of currencies (which is outside of our control), specifically the NOK and SEK are nearly twenty-year lows. However, these currencies began to strengthen in Q3, which, if that trend continues, should provide tailwinds to our operations. Each quarter we translate these currencies back to the euro for reporting purposes and more details on the impact of currency through Q1-Q3/2023 are included within the report.
There are several factors that continue to drive these results: our terrific assets, our strong local teams, the strength of our markets throughout the Nordics and continued strength of consumers, as evidenced by the high level of foot traffic in our assets, and the corresponding sales reported by our tenants. This is due, in part, to our business model, which focuses on necessity-based retail and essential services, addressing the every-day-needs of our communities. This type of retail promotes daily traffic to our properties, which is enhanced by locations in central urban areas adjacent to public rail/bus transportation hubs. Another driver of the consumer strength phenomenon is the average wage growth (5.5%) that has occurred in our markets due to inflation. As is typical in an inflationary environment, price increases work through the entire chain: wages, cost of goods/services, higher sales, and ultimately, for Citycon, higher rents.
As noted in the last quarter, we refinanced and expanded our credit facility in April from EUR 500 million to EUR 650 million, consisting of a EUR 400 million revolver and EUR 250 million term loan. Following this refinancing, our team has continued their disciplined capital allocation by using the proceeds to execute EUR 236 million bond repurchases for our bonds maturing in the near future, taking advantage of discounts and dislocation in secondary trading. Furthermore, we are currently in advanced negotiations for approx. EUR 90 million mortgage loan secured by one of our Swedish assets, providing evidence that the secured loan market is functioning well. This loan is expected to close in Q4/2023. Through these actions, we continue to mitigate the earnings impact of higher current market interest rates, while also improving our overall balance sheet. We are also seeing some «green shoots» in the bond market, which should give us further flexibility moving into 2024.
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