TECHNOPOLIS PLC STOCK EXCHANGE RELEASE 16.7.2004 at 10.20 a.m.
TECHNOPOLIS GROUP INTERIM REPORT, JANUARY 1 - JUNE 30, 2004
Highlights of January-June 2004, compared with January-June 2003:
- Net sales EUR 14.2 million, a decline of 0.8 %
- Profit before extraordinary items EUR 4.7 million, up by 11.4 %
- Average occupancy ratio of premises 97.2 % (97,3 % in June 2003)
- Group’s equity-to-assets ratio 38.2 % (35,8 % in June 2003)
Technopolis’ net sales for the period totaled EUR 14.2 million (EUR
14.4 million in Jan-June/2003), a decline of 0.8 %. This resulted
mainly from a decline in the net sales of Medipolis GMP Ltd.
compared with the previous year. Operating profit for the period was
EUR 6.7 million (EUR 6.1 million), an increase of 9.2 %. Profit
before extraordinary items was EUR 4.7 million (EUR 4.2 million), up
by 11.4 %. The Group’s equity-to-assets ratio at the end of the
period was 38.2 % (35.8 %).
Of the net sales, rent income accounted for EUR 12.0 million (EUR
11.9 million), while service income accounted for EUR 2.2 million
(EUR 2.5 million). Rent income rose by 1.1 % from the corresponding
period in 2003. Depreciation according to plan was EUR 2.2 million
(EUR 2.2 million). The balance sheet total was EUR 179.4 million
(EUR 179.1 million), up by 0.2 %.
On June 30, 2004, the Group’s property for renting comprised 41 (40)
properties with a total rentable area of 192,000 floor square meters
(188,000 floor square meters on June 30, 2003). The Group’s average
occupancy ratio on June 30, 2004 was 97.2 % (97.3 %). In the Oulu
region, the occupancy ratio was very high, at 98.1 %. In Technopolis
Helsinki-Vantaa it was 94.5 %, while in Technopolis Innopoli in
Espoo it was 91.7 %.
The second stage of Technopolis Helsinki-Vantaa, at 6,300 gross
square meters, was completed at the end of April. The investment
including the parking facility amounts to approx. EUR 7.7 million.
In February, Technopolis decided to begin construction on the third
stage of Technopolis Helsinki-Vantaa. The size of the construction
project is 3,600 gross square meters. Over half of the premises to
be constructed have been leased or reserved. Construction began in
May and the project is due to be completed in January 2005.
In March, Technopolis announced it will acquire the total stock of
Kiinteistö Oy Oulun Teknologiatalot from the Local Government
Pensions Institution at a price of EUR 7.8 million. The transaction
was completed on July 1. As a result, Technopolis became the owner
of three properties with a total floor area of 10,026 square meters.
The properties are located in Linnanmaa, Oulu.
The architectural planning for the Technopolis project in Oulu city
center has commenced. The company aims to complete construction on
the first stage of the project in 2005.
In February, Technopolis announced plans for a new technology center
in cooperation with the City of Espoo beside Ring Road II in Espoo.
In March, the Espoo City Board made a favorable land reservation
decision. In June, Technopolis and the Board of Directors of the
joint municipal authority governing EVTEK signed a letter of intent
to design and build the facilities. The intent is to design the
3,000-square-meter facilities required by EVTEK’s Learning Industry
Unit together, after which they will be built by Technopolis and
leased by EVTEK.
The Group’s long-term liabilities at the end of the review period
amounted to EUR 86.8 million (EUR 88.0 million). The average
interest rate for loans on June 30, 2004 was 3.56 %. Due to the
related interest rate risk, a policy of diversification has been
followed. On June 30, 51 % of the loan portfolio was bound to either
the 3-12 month Euribor rate or to the Bank of Finland’s rate. 49 %
of the loans were fixed-interest loans of 13-60 months. The average
outstanding loan period was 7.2 years.
Technopolis supplements its finance with a EUR 30 million domestic
commercial paper program which allows the company to issue
commercial papers with a maturity of less than a year. On June 30,
2004, the issued commercial papers totaled EUR 9.0 million.
The Group’s equity-to-assets ratio on June 30 was 38.2 % (35.8 %).
Increases in share capital
During the review period, Technopolis’ share capital was increased
on two occasions. In May, 136,625 Technopolis shares were subscribed
with 2001 A/B options, and the resulting increase in share capital
of EUR 230,896.25 was entered in the Trade Register on May 31. The
new shares were traded alongside the old shares from June 1.
In June, Technopolis implemented a share offering through the "book
building" process, in which 1,650,000 new shares were offered for
subscription to a limited number of Finnish and international
institutional investors. Receipt of bids commenced on June 14 and
was prematurely suspended on June 16 due to excess demand of approx.
1.7 times. The Board of Directors resolved, in accordance with the
authorization of the Annual General Meeting, to increase the share
capital by EUR 2,788,500 and 1,650,000 shares, provided that the
institutional investors subscribed for the shares in accordance with
their bids during the subscription period, June 17-28, at a price of
EUR 3.80 per share. The number of shares offered to investors in the
share offering corresponded to 9.0 % of the company’s share capital
and votes after the share offering. The share subscriptions were
approved and the increase in share capital was entered in the Trade
Register on July 1. The new shares were traded alongside the old
shares from July 2.
After the above-mentioned two share capital increases, Technopolis’
share capital is EUR 31,127,139.94, divided into 18,418,426 shares
each with a counter book value of EUR 1.69.
The Group employed an average of 96 (98) people. 24 (21) persons
were employed in jobs related to premises activities, 22 (32)
persons in business services and 50 (45) persons in project
The Technopolis Group includes Innopoli Ltd. (97.5 % owned by
Technopolis) and Innopoli Ltd.’s fully-owned subsidiary Technopolis
Ventures Ltd. (former name Otaniemi Science Park Ltd.), as well as
Medipolis Ltd. (55.7 % owned by Technopolis) and Medipolis Ltd.’s
fully-owned subsidiary Medipolis GMP Ltd. Also part of the Group are
the parent company’s fully-owned subsidiary Technopolis Hitech Ltd.,
and the affiliated companies Oulutech Ltd. (30 % owned), Ii
Micropolis Ltd. (25.7 % owned) and Technocenter Kempele Oy (48.5 %
owned), as well as other smaller subsidiaries and affiliates.
In January, Medipolis GMP Ltd. warned its 13 employees of possible
lay-offs, and adjusted its operations in February by laying off some
employees. The net sales of the company, which provides clean room
services for the biotechnology field, decreased by EUR 0.49 million
from the previous review period. This in turn decreased the
Technopolis Group’s profit by EUR 0.03 million during the review
period. Medipolis GMP will continue to adjust its operations to
In January, Technopolis Ventures Ltd., the City of Espoo and other
shareholders established a joint venture called Otaniemen kehitys
Oy. Technopolis Ventures Ltd. has a 25 % holding in the company and
the City of Espoo 40 %. Other key members of the Otaniemi scientific
community are participating in the project as small owners.
EUR 8.8 million of the EUR 11.7 million badwill (negative
consolidation difference) arising from the Innopoli arrangements has
been allocated to buildings, with the remainder being allocated to
earlier agreements made by the Innopoli Group. The badwill allocated
to buildings will be recognized in the accounts over the remaining
40-year depreciation period of the buildings. The remaining EUR 2.0
million badwill, allocated to the agreements, will be recognized in
Implementation of IAS and IFRS
The Technopolis Group will publish the company’s first financial
statements complying fully with the new International Accounting
Standards (IAS) and the International Financial Reporting Standards
(IFRS) for the financial year ending in 2005. The first interim
report to comply with the said standards will be the report for
January 1 - March 31, 2006. Preparations for the implementation of
the standards began in 2003 and will continue through 2004.
Decisions of the Annual General Meeting
The Annual General Meeting held on March 30, 2004 confirmed the
consolidated and parent company income statements and balance sheets
for the 2003 financial year, released those responsible for accounts
from further liability and decided on the distribution of a dividend
of EUR 0.25 per share for the year ended December 31, 2003. The
Annual General Meeting also authorized the Board of Directors to
decide on a rights offering and issue of convertible bonds.
Technopolis Group estimates that, in 2004, the demand for high tech
operating environments will be satisfactory and that the occupancy
ratio of the Group’s rental facilities and the demand for the
Group’s services will remain good. The Group expects its net sales
to increase by 0-3 % and its net profit by 8-12 % in 2004, compared
to 2003. Earnings per share are estimated to total EUR 0.37-0.38.
The company’s business is protected against business cycle
fluctuations by the Group’s fixed-term lease portfolio which totaled
EUR 63.2 million on June 30, 2004. Of the lease agreements, 5 % are
valid until further notice or will expire in 2004, 34 % will expire
in 2005-2007, 26 % will expire in 2008-2010, 28 % will expire in
2011-2013, and 8 % will expire in 2014 or later.
The company’s financial performance is dependent on trends in the
general operating environment, in customer business and in the
financial markets. Factors in these areas may affect the company’s
result through changes in occupancy ratios, the use of services,
financing costs and office rent levels.
The figures in this interim report are unaudited.
Oulu, July 16, 2004
Board of Directors
President and CEO
For further information, please contact:
Pertti Huuskonen, tel. +358 400 680 816 or +358 8 551 3213
A PDF version of this interim report can be found at
www.technopolis.fi. Requests for a printed version can be made to
Teija Koskela, tel. +358 8 551 3200.
Technopolis Plc has an information bulletin service, which can be
ordered on the Internet. Those ordering the service will receive the
company’s information bulletins by email.
CONSOLIDATED INCOME STATEMENT 1.1.2004- 1.1.2003- 1.1.2003-
30.6.2004 30.6.2003 31.12.2003
EUR mill. EUR mill. EUR mill.
Net sales 14.25 14.37 28.48
Other operating income 1) 2.56 2.51 5.62
Depreciation and write-downs -2.22 -2.19 -4.39
Decrease in consolidation difference 0.97 1.02 0.90
Operating expenses -8.88 -9.58 -19.03
Operating profit 6.69 6.12 11.58
Financial income and expenses -2.00 -1.92 -3.51
Profit before extraordinary items 4.69 4.21 8.07
Profit before appropriations and taxes 4.69 4.21 8.07
Net profit for the period 3.71 3.17 5.94
CONSOLIDATED BALANCE SHEET
Intangible assets 0.73 0.63 0.62
Tangible assets 173.90 171.67 172.74
Holdings in Group companies
and affiliated companies 0.91 0.81 0.83
Other shareholdings 0.21 0.34 0.21
Total short-term receivables 2.56 3.08 3.21
Cash and bank 1.13 2.54 1.62
Total assets 179.44 179.07 179.23
Share capital 31.13 27.98 28.11
Other shareholders’ equity 31.54 25.65 28.49
Minority interests 4.62 5.20 4.56
Consolidation difference 1.02 5.14 1.84
Long-term liabilities 86.77 87.98 81.85
Short-term liabilities 24.37 27.11 34.37
Total liabilities 179.44 179.07 179.23
STATEMENT OF CASH FLOWS
Net cash provided by operating activities
Operating profit 6.69 6.12 11.58
Depreciation and decrease in
consolidation difference 1.25 1.11 3.49
Other adjustments to operating profit -0.03
Change in working capital 1.70 0.27 -1.38
Interest received 0.02 0.01 0.03
Interest paid and fees -1.98 -2.02 -3.99
Income from other investments
of non-current assets -0.11 0.01 0.01
Taxes paid -0.62 -0.62 -1.60
Net cash provided by operating
activities 6.93 4.88 8.15
Net cash used in investing activities
Investments in other securities -0.03 0.09
Investments in tangible and
intangible items -3.48 -5.89 -12.73
Acquisition of subsidiaries -0.03 -0.03
Net cash used in investing activities -3.50 -5.92 -12.67
Net cash provided by financing activities
Increase in long-term loans 10.00 2.15 2.15
Decrease in long-term loans -5.39 -5.69 -11.03
Dividends paid -4.16 -3.65 -3.65
Paid share issue 6.54
Change in short-term loans -10.90 8.00 15.90
Cash flows from financing activities -3.91 0.81 3.37
Change in cash assets -0.48 -0.22 -1.15
Cash assets at beginning of period 1.62 2.77 2.77
Cash assets at end of period 1.13 2.54 1.62
Change in net sales, % -0.8 30.0 25.8
Operating profit/net sales, % 46.9 42.6 40.7
Equity-to-assets ratio, % 2) 38.2 35.8 35.2
Personnel in Group companies 96 98 95
Earnings/share, EUR 2) 0.22 0.19 0.36
Equity/share 2) 3.82 3.55 3.51
Average issue-adjusted number
of shares 16,680,981 16,548,588 16,569,106
Book value of real estate portfolio
EUR 1,000 3)4) 165,298 161,670 159,429
Net investments in real estate
portfolio, EUR 1,000 3)4) 7,897 38,813 38,536
Net investments in real estate port-
folio incl. unfinished buildings and
surrounding land areas, EUR 1,000 4) 4,027 35,725 39,891
Net yield % of book value of real
estate 5) 10.4 9.8 10.2
Floor area occupancy ratio, % 97.2 97.3 96.9
Pledges and guarantees on own debt
Mortgages 127.2 132.2 132.3
Lease liabilities 0.5 0.5 0.5
Pledged rent income 0.8 0.8 0.8
Interest rate swaps in 2001 (fixed interest rate 5 years)
nominal value of underlying 4.0 4.0 4.0
Interest rate swaps in 2002 (fixed interest rate 5 years)
nominal value of underlying 4.0 4.0 4.0
Interest rate swaps in 2002 (fixed interest rate 3 years)
nominal value of underlying 4.0 4.0 4.0
Interest rate swaps in 2003 (fixed interest rate 3 years)
nominal value of underlying 1.3 1.5 1.5
Liability for return of VAT, which is realized if properties are
sold or their intended use is changed in the situations referred to
in section 33 of the VAT Act. 17.1 20.7 21.1
Rent payment liabilities 0.6 0.7 0.6
Collateral given on behalf of affiliated companies
Guarantee 0.5 0.5 0.5
1) Other operating income comprises operating subsidies received for
project services, for which the same amount of project service
expenses have been recorded as operating expenses.
2) The figure includes the effects of the negative consolidation
difference arising from the Innopoli arrangements.
3) Does not include unfinished buildings and the land areas
4) Includes the buildings of the Innopoli Group and property
5) Review period and comparison period figures have been converted
to annual figures by multiplying them by two.
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