CITYCON OYJ Interim Report 13 May 2025 at 21:20 hrs
Citycon announces the following:
- Interim report for Q1/2025 published
- Citycon considers launch of a EUR 100 million tender offer for the outstanding notes of Citycon Treasury B.V. due 2027
- Citycon considers repurchasing its own shares
Strong operational performance in Q1/2025
- Like-for-like net rental income increased by EUR 1.4 million or 3.5%.
- Total net rental income decreased by EUR 0.9 million or 1.8% compared to the previous year, mainly due to divestments executed during 2024 that impacted EUR -5.2 million to total net rental income. The negative impact of divestments was partly offset by consolidation of Kista, which increased net rental income by EUR 2.2 million.
- In comparable FX rates, total net rental income decreased by 1.3%.
- Average rent per sq.m. increased by 1.5% with comparable FX to EUR 25.3 per sq.m (vs. Q1/2024).
- Retail occupancy rate 94.8% vs. 94.9% in Q1/2024.
- Like-for-like footfall increased 2.4%.
- Like-for-like tenant sales increased 1.2%.
- Fair value change of investment properties in Q1/2025 was positive EUR 0.7 million.
The strengthening of the balance sheet remains a key priority
Q1/2025
- In January Citycon redeemed the remaining amounts (approximately EUR 4 million) of its NOK bonds maturing in September 2025.
- In February Citycon prepaid EUR 150 million of its outstanding Term Loan maturing in April 2027.
- In March Citycon executed EUR 100 million tender of its bond maturing in September 2026 (remaining amount after the bond tender is approximately EUR 250 million).
- LTV decreased -40 basis points during Q1/2025 to 46.9% (Q4/2024: 47.3%).
Events post Q1/2025
- In April Citycon placed a 6.25-year EUR 450 million green bond with an orderbook more than six times oversubscribed with funds being used to repay debt.
- In April Citycon executed an additional EUR 100 million tender of its bond maturing in September 2026 (remaining amount after the bond tender is approximately EUR 150 million).
- In April Citycon prepaid the remaining EUR 100 million of its outstanding Term Loan maturing in April 2027.
- On 14 May 2025 Citycon is going to prepay its EUR 186 million secured loan maturing in May 2029.
KEY FIGURES
Citycon Group | Q1/2025 | Q1/2024 | % | FX Adjusted Q1/2024 | FX Adjusted % 1) | |
Net rental income | MEUR | 50.1 | 51.0 | -1.8 % | 50.7 | -1.3 % |
Like-for-like net rental income development | % | 3.5 % | 6.5 % | - | - | - |
Direct operating profit 2) | MEUR | 42.7 | 39.7 | 7.7 % | 39.4 | 8.5 % |
IFRS Earnings per share (basic) 3) | EUR | -0.03 | 0.33 | - | 0.34 | - |
Fair value of investment properties | MEUR | 3,715.7 | 4,082.4 | -9.0 % | - | - |
Loan to Value (LTV) 2) | % | 46.9 | 48.3 | -2.9 % | - | - |
EPRA based key figures 2) | Q1/2025 | Q1/2024 | % | FX Adjusted Q1/2024 | FX Adjusted % 1) | |
EPRA Earnings 4) | MEUR | 19.4 | 22.4 | -13.4 % | 22.2 | -12.5 % |
EPRA Earnings excl. hybrid bond interests 5) | MEUR | 28.0 | 28.8 | -2.6 % | 28.5 | -1.8 % |
EPRA Earnings per share (basic) 4) | EUR | 0.105 | 0.127 | -16.8 % | 0.125 | -15.9 % |
EPRA Earnings per share excl. hybrid bond interests (basic) 5) | EUR | 0.152 | 0.163 | -6.5 % | 0.161 | -5.7 % |
EPRA NRV per share 6) | EUR | 8.13 | 8.96 | -9.2 % | - | - |
1) Change from previous year (comparable exchange rates). Change-% is calculated from exact figures. | ||||||
2) Citycon presents alternative performance measures according to the European Securities and Markets Authority (ESMA) guidelines. Citycon follows updated EPRA Best Practices Recommendations (BPR) in its reporting starting from the beginning of 2025. More information is presented in section EPRA performance measures. | ||||||
3) The key figure includes hybrid bond interests, amortized fees and gains/losses and expenses on hybrid bond repayments. | ||||||
4) From the beginning of 2025 the key figure includes hybrid bond interests and excludes reorganisation and one-time costs. The information for the comparison periods has been restated to correspond to the new reporting recommendations. | ||||||
5) A new key figure introduced at the beginning of 2025. The key figure excludes hybrid bond interests, and reorganisation and one-time costs. | ||||||
6) The development of currency rates improved EPRA NRV/share by EUR 0.16. | ||||||
CEO OLEG ZASLAVSKY:
First, I want to say that I am thrilled to step in as the CEO of Citycon. Over the last couple of months, I have had the chance to spend time with our people and visit our assets. I am truly impressed both by the quality of the real estate and commitment of our staff.
Operational highlights
Our operational performance in January-March 2025 was robust:
- Like-for-like net rental income increased by 3.5% supported by indexation, lower operating expenses and improved recovery rate.
- Like-for-like footfall increased 2.4% compared with Q1/2024.
- Like-for-like tenant sales increased 1.2% compared with Q1/2024.
- There was a -50 basis point decline in the retail occupancy rate over the prior quarter due to normal seasonal variation.
- FX adjusted direct operating profit growth was 8.5% compared with Q1/2024.
Debt management
During Q1/2025 we continued to repay debt with proceeds from the bond issued in December 2024 and divestments closed in Q4/2024. In February we prepaid EUR 150 million of the RCF Term Loan maturing in April 2027 and in March we completed a EUR 100 million bond tender of the September 2026 bond, which is our nearest maturity debt.
In March, S&P Global Rating downgraded Citycon Oyj's issuer credit rating from BBB- (negative) to BB+ (stable) while maintaining the issue rating on Citycon's unsecured notes (bonds) at the investment grade rating of BBB-.
Post Q1/2025, we issued a new EUR 450 million bond in April which was more than six times oversubscribed, demonstrating our strong access to the capital market. Proceeds from the new bond will be fully used for repaying outstanding debt. In April we prepaid the remaining EUR 100 million of the RCF Term Loan and completed an additional EUR 100 million bond tender of the September 2026 bond. The remaining amount of the September 2026 bond is now approx. EUR 150 million.
Divestments
Our liquidity position is good and as the transaction markets are gradually improving, we are currently not under pressure to accelerate divestments. We will continue to divest non-core assets; however, we will prioritize making the right deals over fast deals - even if this results in a slower pace of divestments than previously anticipated. We are committed to value creation, not just transaction volume.
Guidance 2025
Operational performance for year 2025 is in line with our expectations and we do not anticipate any significant change in the operations during the year. However, due to the successful new bond issuance in April, our financial expenses for year 2025 are higher than originally forecasted. As a result of the increased financial expenses, we specify our guidance for 2025 by tightening the upper end of the guidance. The specified guidance is EPRA Earnings per share of EUR 0.41-0.50 and EPRA Earnings per share excluding hybrid bond interests of EUR 0.60-0.69.
Looking ahead
Citycon's strategy will continue to rely on necessity-based assets in strong, growing, urban locations across the Nordic region. Our focus remains on managing our debt, improving operational performance and strengthening our balance sheet through strategic divestments and prudent financial management.
I would like to conclude by thanking our people for the hard work completed during this and the past quarters. Together we will continue to create value for all our stakeholders.
OUTLOOK (Specified 13 May 2025)
Current outlook | Previous outlook | ||
EPRA Earnings per share (basic) | EUR | 0.41-0.50 | 0.41-0.53 |
EPRA Earnings per share excluding hybrid bond interests (basic) | EUR | 0.60-0.69 | 0.60-0.72 |
The outlook assumes that there are no major changes in macroeconomic factors and no major disruptions from the war in Ukraine. These estimates are based on the existing property portfolio as well as on the prevailing level of inflation, the EUR-SEK and EUR-NOK exchange rates, and current interest rates.
EPRA Earnings per share (basic) and EPRA Earnings per share excluding hybrid bond interests (basic) for 2025 are based on updated EPRA Best Practices Recommendations (BPR) Guidelines published on the 1st of October 2024 and are not fully comparable with previously reported EPRA EPS key figures.
AUDIOCAST
Citycon's investor, analyst and press conference call and live audiocast will be held on Wednesday, 14 May 2025 at 10:00 a.m. EET. The audiocast can be participated by calling in and following live on the following website:https://citycon.events.inderes.com/q1-2025
Questions for the management can be presented by phone. To ask questions, join the teleconference by registering on the following link: https://events.inderes.com/citycon/q1-2025/dial-in
After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to enter the queue.
The audiocast will be recorded and it will be available afterwards on Citycon's website.
Citycon considers launch of a tender offer for the outstanding notes of Citycon Treasury B.V. due 2027
Citycon Oyj ("Citycon") is considering the launch of a tender offer for the outstanding EUR 242,471,000 2.375 per cent Guaranteed Notes due 2027 of Citycon Treasury B.V. guaranteed by Citycon (ISIN: XS1822791619) issued on 3 September 2018 (the "Securities"). Securities are intended to be purchased up to EUR 100 million in aggregate principal amount.
If Citycon decides to proceed with the tender offer, the pricing and terms of the offer will be published in connection with the launch. The tender offer is subject to market conditions.
Citycon considers repurchasing its own shares
On 13 May 2025 Citycon published a stock exchange release where it announced that it considers repurchasing its own shares.
CITYCON OYJ
For further information, please contact:
Eero Sihvonen
Chief Financial Officer
Contact requests through:
Anni Torkko
Investor Relations Manager
Tel. +358 45 358 0570
anni.torkko@citycon.com
Citycon is a leading owner, manager and developer of mixed-use real estate featuring modern, necessity-based retail with residential, office and municipal service spaces that enhance the communities in which they operate. Citycon is committed to sustainable property management in the Nordic region with assets that total approximately EUR 3.8 billion. Our centres are located in urban hubs in the heart of vibrant communities with direct connections to public transport and anchored by grocery, healthcare and other services that cater to the everyday needs of customers.
Citycon's shares are listed on Nasdaq Helsinki Ltd.
www.citycon.com
