{"segments": [{"speakerId": "S1", "sentences": [{"start": 1, "end": 6, "text": "Good morning everyone, and welcome to Citycon's third quarter results Audiocast."}, {"start": 6, "end": 11, "text": "My name is Annie Dorko, and I’m working as the Investor Relations Manager here at Citycon."}, {"start": 12, "end": 17, "text": "Last night, we published our third quarter 2024 interim report."}, {"start": 17, "end": 23, "text": "And in this audiocast, we will present the financial and operational key highlights from the results."}, {"start": 24, "end": 33, "text": "The third quarter interim report is available on our website in the investors section; I am also here on the audio call."}, {"start": 34, "end": 37, "text": "Our interim CEO, Mr."}, {"start": 37, "end": 39, "text": "Our interim CEO, Mr. Scott Bahl, and CFO, Mr."}, {"start": 39, "end": 46, "text": "Sakari Järvelä will start the presentations by going through the key highlights from our financial results."}, {"start": 46, "end": 55, "text": "Following that, Scott will present a summary of our operational highlights and go through the financial guidance for full year 2024."}, {"start": 56, "end": 66, "text": "After the presentations by Sakari and Scott, there will be a separate Q&A session and we will open the line for questions from the audience."}, {"start": 66, "end": 68, "text": "With that, I pass on to Zachary.<br /><br />"}, {"start": 68, "end": 69, "text": "Please go ahead."}]}, {"speakerId": "S2", "sentences": [{"start": 71, "end": 74, "text": "Thanks, Annie, and great to have you here with us."}, {"start": 75, "end": 83, "text": "We start this time with our financial results and are happy to report another operationally and financially solid quarter."}, {"start": 83, "end": 91, "text": "Our full net rental income growth was 13.7% in the third quarter, and 11.2% year-to-date."}, {"start": 92, "end": 106, "text": "Apart from strong operational performance driven by rent indexation, the result was affected by the consolidation of Kista Galleria earlier in the year and a couple of larger development projects coming online and starting to produce income."}, {"start": 106, "end": 113, "text": "These are namely the renovation of Myyrmanni Center in Helsinki and the completion of the Lippo Liwa residential towers."}, {"start": 113, "end": 121, "text": "On a like-for-like basis, the net rental income grew 5.2% in the first three quarters of the year."}, {"start": 121, "end": 130, "text": "As also discussed in detail in the Q1 and Q2 results presentations, we have been incurring one-time restructuring costs during the year."}, {"start": 130, "end": 135, "text": "The total for the first three quarters was €7.2 million."}, {"start": 135, "end": 136, "text": "In the third quarter."}, {"start": 136, "end": 148, "text": "We also recognized a positive one-time contribution in our net financial expense coming from a beneficial hedging transaction, which improves the earnings for the quarter."}, {"start": 148, "end": 153, "text": "For EPRA earnings, we report a 12.1% increase for the quarter and 7.8% year to date."}, {"start": 153, "end": 155, "text": "Year to date."}, {"start": 155, "end": 164, "text": "However, it is important to note that many of the one-time items I mentioned above do affect the direct comparability to last year."}, {"start": 167, "end": 175, "text": "On slide four, we show a more detailed breakdown of changes in the net rental income from last year to this year."}, {"start": 175, "end": 181, "text": "Here you can see Kista Galleria contributing 4 million of net rental income in the third quarter and 8.2 million year to date."}, {"start": 181, "end": 182, "text": "Year to date."}, {"start": 183, "end": 195, "text": "If we further look at the first three quarters, our like-for-like properties and redevelopment projects together added a total of €8.7 million of rental income compared to last year."}, {"start": 195, "end": 200, "text": "This is essentially the organic growth coming from our existing asset base."}, {"start": 200, "end": 219, "text": "Divestments had a minor negative impact, but this is expected to increase going forward as we keep executing our current divestment pipeline. Taking the effects together, the total increase in NRI before changes in effects was €16.2 million year to date."}, {"start": 220, "end": 229, "text": "Swedish and Norwegian currencies weakened somewhat during the third quarter and also throughout the year, resulting in a minor negative impact on NRI."}, {"start": 231, "end": 238, "text": "Similarly, here on page five, we show the development of EPRA earnings over the first three quarters of the year."}, {"start": 238, "end": 245, "text": "Looking at the lower graph, we show that the 16.2 million positive NRI increase discussed on the previous page."}, {"start": 245, "end": 259, "text": "Over the first three quarters, the total G&A costs were €3.1 million higher compared to last year, but notably, this includes the already mentioned €7.2 million reorganisation and one-time items.<br /><br />"}, {"start": 259, "end": 272, "text": "So, from a run rate perspective, at the end of the quarter, we are running our G&A clearly lower compared to last year, working toward reaching our target, which is a run rate of 10% of NRI by the end of the year."}, {"start": 273, "end": 280, "text": "In terms of net financial expenses, for the first three quarters, we reported a 12.9 million increase compared to last year."}, {"start": 280, "end": 291, "text": "This is partly due to higher interest rates on the refinanced debt, but the majority of the increase is actually due to the consolidation of Kista Galleria into our balance sheet."}, {"start": 291, "end": 301, "text": "The effect comes from both, including the refinance term loan from the JV and the cessation of receiving interest income from the shareholder loans granted to the JV."}, {"start": 302, "end": 314, "text": "Notably, for Q3, the increase in financial expenses was only €3.3 million, as shown in the upper graph, benefiting from a currency hedge put in place earlier in the year."}, {"start": 315, "end": 326, "text": "The valuations of our investment properties benefited from the high cash flow growth, as we recorded a further €14.7 million fair value gain in the third quarter."}, {"start": 326, "end": 335, "text": "The valuation yields were stable, so the fair value increase follows from higher market rents as rent indexation continued."}, {"start": 335, "end": 346, "text": "The total year-to-date change in fair values was €84 million, including the positive €46 million impact from Kista Galleria booked in the first quarter."}, {"start": 349, "end": 354, "text": "We did not undertake any major financing transactions during the third quarter of the year."}, {"start": 354, "end": 359, "text": "There are no significant changes in our maturity structure compared to Q2."}, {"start": 359, "end": 366, "text": "A weighted average maturity stood at 2.9 years at quarter end, and our weighted average interest rate at 3.3%."}, {"start": 367, "end": 382, "text": "We have a very strong liquidity position, with €508 million in total liquid liquidity available, following a slightly elevated cash position after receiving the sales proceeds from the Trekanten divestment on the last day of the quarter."}, {"start": 383, "end": 395, "text": "The share of secured loans from our total debt remains relatively low at 26%, so we still have further remaining capacity to access the secured loan market if desired."}, {"start": 396, "end": 403, "text": "And very importantly, we are retaining our Triple B minus investment grade rating from Standard and Poor's."}, {"start": 403, "end": 414, "text": "As we have consistently communicated, keeping our investment grade rating is a key target for us, and Scott will talk more about what we are doing to safeguard the current rating.<br /><br />"}, {"start": 415, "end": 425, "text": "Our core credit metrics improved somewhat this quarter, with IFRS LTV standing at 47.5%, slightly down from the previous quarter."}, {"start": 426, "end": 436, "text": "Net debt to EBITDA declined by almost one full turn from 11.2 to 10.4, as proceeds from the Trekanten sale reduced our net debt."}, {"start": 436, "end": 444, "text": "The interest cover ratio declined slightly in the quarter, and the average interest rate remained practically flat from the second quarter."}, {"start": 445, "end": 448, "text": "This completes my review of the third quarter financial results.<br /><br />"}, {"start": 448, "end": 450, "text": "So I will now hand over to Scott."}]}, {"speakerId": "S3", "sentences": [{"start": 453, "end": 454, "text": "Thank you, Sakari."}, {"start": 454, "end": 455, "text": "Good morning, everyone."}, {"start": 455, "end": 457, "text": "It's nice to be with you."}, {"start": 457, "end": 479, "text": "Um, as Sakari mentioned, operational performance accelerated in Q3, continuing the trend throughout the year, resulting in a 13.7% total NRI increase against Q3 2023 and an 11.2% year-to-date total NRI increase with comparable FX rates compared to the previous year."}, {"start": 480, "end": 495, "text": "The strong operational result is due in part to an increase in average rent per square meter, which rose 4.1% to €24.7 per square meter versus €23.7 per square meter last year."}, {"start": 496, "end": 504, "text": "These results also include the acquisition of 100% of Qwest and the divestments of two assets during the year.<br /><br />"}, {"start": 505, "end": 513, "text": "Further, retail occupancy grew slightly to 95.1% versus 94.9% last year."}, {"start": 515, "end": 523, "text": "Leasing activity in our properties remains strong, with 109,000 m² of new leases signed this year."}, {"start": 523, "end": 530, "text": "New major tenants opened during the year, including two supermarkets and a 7,300 square meter Prisma grocery."}, {"start": 530, "end": 536, "text": "Excuse me, square meter, Prisma grocery at Myyrmanni and a Selver grocery at Rocca al Mare, and a Gym!"}, {"start": 536, "end": 538, "text": "Fitness and Rocca al Mare."}, {"start": 538, "end": 543, "text": "The first Nike concept store in the Helsinki suburban area opened at Iso Omena."}, {"start": 544, "end": 555, "text": "On the back of our operational performance, we saw a 14.7 million fair value gain in Q3 and an 84 million fair value gain year to date."}, {"start": 557, "end": 568, "text": "Our year to date EPRA EPS and adjusted EPRA EPS results were 47.6 cents and 38.6 cents, respectively, compared to the previous year."}, {"start": 569, "end": 576, "text": "One-time items impacting these figures include the executed divestments at Kongssenteret and Trekanten."}, {"start": 577, "end": 580, "text": "Also, the €48 million."}, {"start": 580, "end": 592, "text": "Million euro share issue, the delayed consolidation of Qwest by one month, and the delay of the Barkarby handover as we are about to divest of this residential property."}, {"start": 593, "end": 599, "text": "In addition, we had €7.2 million of reorganisation costs, including severance."}, {"start": 601, "end": 608, "text": "Currencies also impacted the results, but were offset by €2.7 million of gain on our hedging of the NOK."}, {"start": 611, "end": 623, "text": "Our commitment to maintaining an investment-grade credit rating and strengthening the balance sheet remain key priorities for Citycon as we continue to make progress, growing our funds from operations and deleveraging the company."}, {"start": 625, "end": 637, "text": "Our divestment criteria include selling retail assets that are not in the capital cities, as well as non-retail development and properties where we have maximized the asset value."}, {"start": 637, "end": 638, "text": "The asset value."}, {"start": 640, "end": 650, "text": "During the third quarter, the company completed the second divestment of the year at Trekanten in Norway, resulting in year-to-date divestments totaling €145 million."}, {"start": 651, "end": 657, "text": "Additionally, in October, Citycon announced that it had signed an agreement to divest Barkarby in Sweden."}, {"start": 658, "end": 666, "text": "Our remaining divestment pipeline contains €400 million under LOI or advanced negotiations."}, {"start": 667, "end": 681, "text": "As a result, we are confident that we will exceed the previously announced divestment target of €380 million by year end and are on track to achieve the €950 million as of year end 2025."}, {"start": 682, "end": 688, "text": "And as a reminder, divestment proceeds will be used to pay down debt and improve our overall debt metrics."}, {"start": 690, "end": 703, "text": "Moving into Q4 2024, we will accelerate the operational actions that we committed to at the beginning of the year, which includes reducing expenses to offset the increase in finance costs."}, {"start": 704, "end": 711, "text": "We have completed the consolidation of corporate functions to Iso Omena and the outsourcing of our accounting."}, {"start": 711, "end": 723, "text": "In addition, we are planning to decentralize day-to-day decision-making to the country level in order to improve results and to provide full personnel accountability to the teams."}, {"start": 724, "end": 732, "text": "We believe pushing decision-making closer to our consumer will generate the results we believe our properties are capable of."}, {"start": 733, "end": 742, "text": "While our operating performance is consistent with the best performers of our peer group, we believe we have the opportunity to further accelerate this performance."}, {"start": 743, "end": 756, "text": "Specifically, our occupancy cost ratios, or OCRs, continue to remain stubbornly low at 9.4%, providing at least 200 basis points of headroom."}, {"start": 756, "end": 758, "text": "Based upon a study that we commissioned from Savills."}, {"start": 760, "end": 769, "text": "We believe the aforementioned moves will enable us to capture additional rents and make significant headway in increasing these OCRs."}, {"start": 770, "end": 775, "text": "These actions will also reduce our corporate overhead and contribute to meeting our targeted run rate."}, {"start": 775, "end": 780, "text": "G&A of approximately €20 million moving into 2025."}, {"start": 782, "end": 789, "text": "Lastly, capital expenses have been reduced from €96 million to approximately €40 million this year."}, {"start": 789, "end": 796, "text": "This reduction in capital spending will continue into next year, with planned spending to be approximately €20 million."}, {"start": 799, "end": 811, "text": "As a result of these outcomes and our conviction in the strength of the business, we are raising the bottom end of our guidance range for EPRA earnings and adjusted EPRA earnings."}, {"start": 812, "end": 823, "text": "So as a result, our new ranges are EPRA EPS between $0.61 and $0.63, and adjusted EPRA EPS between $0.47 and $0.49."}, {"start": 825, "end": 830, "text": "Having spent the last month scrutinizing these numbers with our team."}, {"start": 830, "end": 841, "text": "I believe this approach is conservative, yet it allows for potential variations over the remainder of the year, including the timing of divestments and potential currency fluctuations."}, {"start": 843, "end": 850, "text": "In closing, Citycon owns irreplaceable fortress-like assets."}, {"start": 850, "end": 865, "text": "Our real estate is located within the largest capital cities, and combined with bulletproof merchandising of necessity goods and municipal services, they continue to generate strong performance with room for outsized rent growth."}, {"start": 865, "end": 875, "text": "Given how advanced our investment pipeline is, it will allow us to substantially improve our debt metrics as we pay down debt with the proceeds from these sales."}, {"start": 876, "end": 886, "text": "Moving forward, we will further solidify our balance sheet while generating more production out of our remaining meaningful assets, ultimately positioning us for sustainable growth."}, {"start": 888, "end": 889, "text": "Thank you."}]}, {"speakerId": "S4", "sentences": [{"start": 896, "end": 903, "text": "If you wish to ask a question, please dial Pound Key five on your telephone keypad to enter the queue."}, {"start": 903, "end": 910, "text": "If you wish to withdraw your question, please dial Pound Key six on your telephone keypad."}, {"start": 918, "end": 921, "text": "The next question comes from Rob Virdi from Green Street."}, {"start": 922, "end": 923, "text": "Please go ahead."}]}, {"speakerId": "S5", "sentences": [{"start": 927, "end": 928, "text": "Good morning, chaps."}, {"start": 928, "end": 930, "text": "Thank you, Scott, for that."}, {"start": 930, "end": 934, "text": "And thank you for giving us a bit of detail on your approach to the disposals."}, {"start": 934, "end": 937, "text": "Could you flesh it out a little bit more for me, please?"}, {"start": 938, "end": 940, "text": "What kind of return hurdles are you looking at for these divestments?"}, {"start": 940, "end": 942, "text": "For those divestments."}, {"start": 942, "end": 946, "text": "Um, and also which geographies."}, {"start": 946, "end": 956, "text": "Um, if you could just talk a little bit about where you see liquidity, and I'm thinking here specifically about Finland and the recent election developments."}, {"start": 956, "end": 960, "text": "Do you think liquidity is better now than it was?"}, {"start": 960, "end": 977, "text": "Uh, that's number one and number two, just if you can talk a little bit about how you see, um, the dividend and whether there is scope at all to maybe reduce that a little bit just to ensure the balance sheet is, is a little stronger, effectively."}, {"start": 977, "end": 978, "text": "Thank you."}]}, {"speakerId": "S6", "sentences": [{"start": 978, "end": 979, "text": "Yeah."}]}, {"speakerId": "S3", "sentences": [{"start": 980, "end": 982, "text": "Uh, thanks, Rob, for the questions."}, {"start": 982, "end": 983, "text": "Appreciate it."}, {"start": 984, "end": 989, "text": "Um, I think if I miss one, catch me."}, {"start": 989, "end": 998, "text": "But, as it relates to geographies in terms of dispositions and what we're seeing in terms of liquidity in the marketplace."}, {"start": 999, "end": 1008, "text": "Interestingly, I would say that earlier this year, we would have considered Norway as the most liquid."}, {"start": 1008, "end": 1017, "text": "However, we are seeing traction in the other countries, and specifically in Sweden, I would say."}, {"start": 1017, "end": 1031, "text": "I think that, as I noted, we are truly focused on possible divestments of those assets that are not located in the capital cities."}, {"start": 1032, "end": 1051, "text": "Uh, it's, you know, we think that given the quality of the assets that we have in the capital cities, and that's where the majority of the value of this company is located, focusing our time and attention on those is much more important than on the outlying areas."}, {"start": 1051, "end": 1072, "text": "So I think you will see, as we move through this pipeline between now and the end of the year, you're going to see assets that fit that criteria, not just in terms of geography but also in terms of use."}, {"start": 1072, "end": 1088, "text": "So, as you know, we have built some residential properties. I think that given what we are seeing in terms of liquidity, we might sell some of the residential properties that we have built and developed."}, {"start": 1089, "end": 1093, "text": "Um, I'm trying to think of the last part."}, {"start": 1093, "end": 1095, "text": "Oh, I think you also asked about hurdle rates."}, {"start": 1095, "end": 1105, "text": "You know, I think we're roughly around 8%, which is kind of where we look as we're considering these dispositions."}, {"start": 1105, "end": 1113, "text": "But more importantly, I think the real question is, where do we want to spend our time and attention?"}, {"start": 1113, "end": 1123, "text": "And we really are focused on these capital city markets and our largest and best assets."}, {"start": 1123, "end": 1150, "text": "And we think, as I mentioned, given the opportunity for outsized rent growth, given the low OCR, we can really push that primarily through the idea that we push decision-making back down to the country level and really drive performance that way."}, {"start": 1151, "end": 1156, "text": "Um, I think there was, oh, you also had a question, I believe, on the dividend."}, {"start": 1157, "end": 1167, "text": "I think it's something that the board examines every quarter and there's nothing off the table."}, {"start": 1167, "end": 1173, "text": "This quarter, you saw that we are continuing with the dividend that was announced."}, {"start": 1173, "end": 1175, "text": "But we will continue to monitor that."}, {"start": 1175, "end": 1185, "text": "And again, first and foremost, our priority is really maintaining that investment grade rating and doing what we need to do to keep that in place."}]}, {"speakerId": "S5", "sentences": [{"start": 1189, "end": 1190, "text": "Nothing is off the table."}, {"start": 1190, "end": 1191, "text": "I love it."}, {"start": 1191, "end": 1191, "text": "Thank you."}, {"start": 1191, "end": 1192, "text": "Scott."}, {"start": 1192, "end": 1192, "text": "Yep."}]}, {"speakerId": "S4", "sentences": [{"start": 1198, "end": 1203, "text": "The next question comes from Michael Chookagian from BNP Paribas."}, {"start": 1204, "end": 1205, "text": "Please go ahead."}]}, {"speakerId": "S7", "sentences": [{"start": 1206, "end": 1206, "text": "Hi guys."}, {"start": 1206, "end": 1207, "text": "Thanks for the call."}, {"start": 1207, "end": 1209, "text": "I have a few questions."}, {"start": 1209, "end": 1218, "text": "So my first question would be about the $42 or $41.9 million loss you announced this quarter from the sale of assets on the P&L."}, {"start": 1218, "end": 1223, "text": "Is that related to the $112 million disposal that you conducted?"}, {"start": 1223, "end": 1226, "text": "Because that would imply a 27% haircut."}, {"start": 1226, "end": 1232, "text": "And is that sale basically in line with the book value, as you stated?"}, {"start": 1232, "end": 1235, "text": "Granted, you did mention some caveats regarding the building rights."}, {"start": 1235, "end": 1240, "text": "The next one is, I believe, in your main market, Finland."}, {"start": 1240, "end": 1248, "text": "The Kamppi Shopping Centre has been put on the market, and the sellers are looking at a six and a half to 7% net initial yield."}, {"start": 1248, "end": 1264, "text": "Um, are you concerned that given the biggest shopping mall in the country exhibits a net initial yield of around five percent, the valuations of your assets might not be properly reflected in that region?"}, {"start": 1264, "end": 1270, "text": "The next question I have is about the residential asset acquisition you've completed?"}, {"start": 1270, "end": 1271, "text": "I know it's a forward agreement."}, {"start": 1271, "end": 1273, "text": "I believe it was a 70-million-dollar purchase."}, {"start": 1273, "end": 1278, "text": "And you've said you're going to be purchasing and selling at the same time for 60 million."}, {"start": 1278, "end": 1283, "text": "Can you explain how much of that 10 million net loss is going to be in cash?"}, {"start": 1283, "end": 1286, "text": "Basically, how much has already been prepaid?"}, {"start": 1286, "end": 1292, "text": "And I'm just kind of curious to know, what is your cash outflow from that acquisition and subsequent disposal?"}, {"start": 1292, "end": 1297, "text": "Um, my last other question was about the fair value gain reported year-to-date?"}, {"start": 1297, "end": 1305, "text": "How much of it was from the write-up of the Kista Galleria purchase you made from your minority and minority partner?"}, {"start": 1305, "end": 1310, "text": "And then I know you had a board member, a new addition, and it just got me looking more into your board."}, {"start": 1310, "end": 1315, "text": "I think six of your board members have been flagged as independent."}, {"start": 1315, "end": 1318, "text": "But one of them is Mr."}, {"start": 1318, "end": 1318, "text": "."}, {"start": 1318, "end": 1318, "text": "Mrs."}, {"start": 1318, "end": 1319, "text": "Popova."}, {"start": 1319, "end": 1325, "text": "I see that she worked at GCT Europe for nine years, and she's flagged as independent of both the shareholder and the company."}, {"start": 1325, "end": 1331, "text": "I'm just wondering why that is and if she actually owns any interest in GCT, the main shareholder?"}, {"start": 1331, "end": 1334, "text": "Um, because I guess that would be helpful."}, {"start": 1334, "end": 1334, "text": "Thank you."}, {"start": 1334, "end": 1335, "text": "Those are my questions.<br /><br />"}]}, {"speakerId": "S2", "sentences": [{"start": 1336, "end": 1338, "text": "Okay, okay."}, {"start": 1338, "end": 1338, "text": "Thank you."}, {"start": 1338, "end": 1339, "text": "Michael, there were a lot of questions there."}, {"start": 1340, "end": 1348, "text": "We'll tackle them in turn, but I'll start with the 41.9 million loss that we booked on equity."}, {"start": 1348, "end": 1351, "text": "I think there are a couple of important points here."}, {"start": 1351, "end": 1357, "text": "It arises from the Trekanten sale and, of course, it has many components."}, {"start": 1357, "end": 1365, "text": "Part of it is, as we announced at the time of the sale, we said it is in line."}, {"start": 1365, "end": 1371, "text": "The gross sales price is close to the book value, excluding building rights."}, {"start": 1371, "end": 1377, "text": "So obviously, there was a large development project that we were planning."}, {"start": 1378, "end": 1386, "text": "But, you know, we didn't really have the investment hurdle rates right now to justify that, which was one of the key reasons why we decided to sell on that building REIT value."}, {"start": 1386, "end": 1389, "text": "Then, of course, I did not realize that was part of it."}, {"start": 1389, "end": 1390, "text": "So that building."}]}, {"speakerId": "S7", "sentences": [{"start": 1390, "end": 1395, "text": "The rate is 27% of the actual asset value on the books."}]}, {"speakerId": "S8", "sentences": [{"start": 1395, "end": 1396, "text": "It's just one part."}, {"start": 1396, "end": 1397, "text": "Let him finish, please."}, {"start": 1397, "end": 1397, "text": "Yeah."}, {"start": 1397, "end": 1399, "text": "That's just one part."}]}, {"speakerId": "S2", "sentences": [{"start": 1399, "end": 1407, "text": "And also, I mean, we carry goodwill from the purchase of the sector from Norway, i.e."}, {"start": 1407, "end": 1411, "text": "Basically, our full Norwegian business from 2015."}, {"start": 1411, "end": 1411, "text": "15."}, {"start": 1411, "end": 1415, "text": "And a portion of that goodwill was obviously allocated to Trekanten."}, {"start": 1415, "end": 1420, "text": "So that goodwill got written down as we sold the asset."}, {"start": 1420, "end": 1440, "text": "And then finally, there were some adjustments made to the gross purchase price due to discounts, mainly from the deferred CapEx, as the building required some modernization expenses."}, {"start": 1440, "end": 1446, "text": "Should we not undertake the development program that we had been planning?"}, {"start": 1446, "end": 1449, "text": "There were some deductions made from the purchase price."}, {"start": 1449, "end": 1452, "text": "So it's a combination of mainly those items."}, {"start": 1454, "end": 1458, "text": "And then you asked about comp, and I think Scott will take that question."}]}, {"speakerId": "S3", "sentences": [{"start": 1458, "end": 1470, "text": "Yeah, I would just say on compensation, listen, you know, it's no great secret that retail in downtown and city center Helsinki has struggled."}, {"start": 1470, "end": 1485, "text": "I would also say that it's a fashion-oriented asset, which is very different from the types of assets we own, which are more grocery-anchored as well as municipal services-oriented."}, {"start": 1486, "end": 1488, "text": "And then lastly, geography."}, {"start": 1488, "end": 1496, "text": "Our properties are located in the best demographics, if you will, of suburban Helsinki."}, {"start": 1496, "end": 1508, "text": "So I'm not concerned that whatever price they're targeting for that specific asset in downtown Helsinki is going to get reflected in our values."}]}, {"speakerId": "S2", "sentences": [{"start": 1510, "end": 1511, "text": "And then the next."}, {"start": 1511, "end": 1515, "text": "You asked about the Barkarby sale there."}, {"start": 1515, "end": 1521, "text": "We had made a prepayment of close to €7 million already two years ago."}, {"start": 1521, "end": 1527, "text": "The actual liquidity impact at the point of sale now is very, very small."}, {"start": 1528, "end": 1536, "text": "It's basically some tenant investments that we had ongoing for the asset before taking it over, but it's not a meaningful effect."}, {"start": 1536, "end": 1539, "text": "Now it's basically just a sale and purchase."}, {"start": 1540, "end": 1543, "text": "And then you asked about the fair value gain on that."}, {"start": 1543, "end": 1546, "text": "That was €46 million recognized in Q1."}]}, {"speakerId": "S8", "sentences": [{"start": 1547, "end": 1549, "text": "And then, I think on."}]}, {"speakerId": "S7", "sentences": [{"start": 1549, "end": 1550, "text": "The board."}, {"start": 1550, "end": 1555, "text": "Um, so one of your, you know, you're adding your former CFO to the board."}, {"start": 1555, "end": 1575, "text": "And I was just wondering, why is it that one of your board members, whom you flag as an independent shareholder of the company and of the shareholders, is someone who worked for GCT Europe for nine years? Could you provide more details to explain why she is actually truly independent, given the ties to the main shareholder and strong ties?"}]}, {"speakerId": "S3", "sentences": [{"start": 1575, "end": 1581, "text": "Yeah, I mean, she worked for GCT many years ago and is well past whatever the cutoff date is."}, {"start": 1581, "end": 1589, "text": "I don't know how many years ago that was, but it's well in excess of whatever the cutoff is for qualifying as independent."}]}, {"speakerId": "S8", "sentences": [{"start": 1590, "end": 1591, "text": "Okay."}, {"start": 1591, "end": 1592, "text": "Thank you."}, {"start": 1592, "end": 1592, "text": "Yep."}]}, {"speakerId": "S4", "sentences": [{"start": 1600, "end": 1607, "text": "As a reminder, if you wish to ask a question, please dial Pound Key five on your telephone keypad."}, {"start": 1615, "end": 1619, "text": "The next question comes from Shubham Agarwal from BlackRock."}, {"start": 1620, "end": 1621, "text": "Please go ahead."}]}, {"speakerId": "S9", "sentences": [{"start": 1624, "end": 1624, "text": "Hey."}, {"start": 1624, "end": 1624, "text": "Hi."}, {"start": 1624, "end": 1625, "text": "Thanks for the presentation."}, {"start": 1625, "end": 1627, "text": "I just have one question."}, {"start": 1627, "end": 1634, "text": "If you can just give us a view and additional comment on perpetual bonds in your capital structure, that would be great."}, {"start": 1634, "end": 1634, "text": "Thanks."}]}, {"speakerId": "S10", "sentences": [{"start": 1635, "end": 1636, "text": "Sorry."}, {"start": 1636, "end": 1636, "text": "Could you repeat which bonds?"}]}, {"speakerId": "S2", "sentences": [{"start": 1636, "end": 1637, "text": "Could you repeat which bonds?"}]}, {"speakerId": "S9", "sentences": [{"start": 1639, "end": 1640, "text": "Perpetual bonds."}, {"start": 1642, "end": 1643, "text": "Okay."}]}, {"speakerId": "S8", "sentences": [{"start": 1643, "end": 1645, "text": "Right, right."}, {"start": 1645, "end": 1646, "text": "Um, I mean."}]}, {"speakerId": "S2", "sentences": [{"start": 1646, "end": 1650, "text": "There's not really that much we can say right now."}, {"start": 1650, "end": 1661, "text": "I mean, in all honesty, since we did the exchange during Q2 on the first of the hybrid bonds, we haven't really thought about them that much."}, {"start": 1661, "end": 1664, "text": "I mean, they're a perpetual or permanent part of our capital structure."}, {"start": 1664, "end": 1672, "text": "We have the next one coming to a reset in the early part of 2026."}, {"start": 1672, "end": 1673, "text": "It's still quite far away."}, {"start": 1673, "end": 1676, "text": "So it's not something that we primarily worry about right now."}, {"start": 1676, "end": 1682, "text": "But I mean, they are an integral part of our capital stack and will remain so."}]}, {"speakerId": "S3", "sentences": [{"start": 1682, "end": 1682, "text": "Yeah."}, {"start": 1682, "end": 1696, "text": "I think I would just add that, you know, we executed on the hybrid and the exchange as one way to kind of deal with this. You know, we're not alone in terms of how we dealt with this."}, {"start": 1696, "end": 1701, "text": "So there is a path, if that’s a path we decide to choose as we move forward."}]}, {"speakerId": "S9", "sentences": [{"start": 1704, "end": 1705, "text": "Yes."}, {"start": 1705, "end": 1705, "text": "Got it."}, {"start": 1705, "end": 1705, "text": "Okay."}, {"start": 1705, "end": 1706, "text": "Thank you."}]}, {"speakerId": "S4", "sentences": [{"start": 1714, "end": 1718, "text": "The next question comes from Neeraj Kumar from Barclays."}, {"start": 1718, "end": 1719, "text": "Please go ahead."}, {"start": 1733, "end": 1735, "text": "Neeraj Kumar from Barclays."}, {"start": 1735, "end": 1737, "text": "Your line is now unmuted."}, {"start": 1738, "end": 1739, "text": "Please go ahead."}]}, {"speakerId": "S11", "sentences": [{"start": 1748, "end": 1748, "text": "Hello."}, {"start": 1748, "end": 1749, "text": "Am I audible?"}]}, {"speakerId": "UU", "sentences": [{"start": 1751, "end": 1752, "text": "Can you repeat?"}, {"start": 1753, "end": 1753, "text": "Sorry."}, {"start": 1754, "end": 1755, "text": "Hello?"}]}, {"speakerId": "S8", "sentences": [{"start": 1755, "end": 1755, "text": "Yeah."}, {"start": 1755, "end": 1756, "text": "You're audible."}]}, {"speakerId": "S11", "sentences": [{"start": 1757, "end": 1757, "text": "Oh, sorry."}, {"start": 1757, "end": 1758, "text": "Yeah."}, {"start": 1758, "end": 1760, "text": "I was saying with regards to your hybrid capture."}, {"start": 1761, "end": 1766, "text": "So as you go through this disposal program, you're very comfortable with your ability to execute."}, {"start": 1766, "end": 1772, "text": "Your hybrids are most likely going to be beyond 15% of your total assets, which is the threshold set by S&P."}, {"start": 1772, "end": 1776, "text": "So how do you think about that permanent part of your cash stack?"}, {"start": 1776, "end": 1780, "text": "It's been a long time since S&P published their last report on you guys."}, {"start": 1780, "end": 1782, "text": "And a lot of things have happened since then."}, {"start": 1782, "end": 1787, "text": "So could you please give us a bit more color on how the talks are going on that side of things?"}]}, {"speakerId": "S8", "sentences": [{"start": 1787, "end": 1788, "text": "Yeah, sure."}]}, {"speakerId": "S2", "sentences": [{"start": 1788, "end": 1789, "text": "Thanks."}, {"start": 1789, "end": 1790, "text": "Thanks for the question."}, {"start": 1790, "end": 1808, "text": "I mean, when it comes to the hybrid stack, of course, we will review our options within the S&P criteria. As you know, they allow a 10% reduction per year and 25% in the lifetime."}, {"start": 1808, "end": 1813, "text": "So, if we were to see the capital or the hybrid stack becoming inefficient in any way."}, {"start": 1813, "end": 1822, "text": "So, if part of it begins losing equity credit, I mean, we could potentially reduce within that range."}, {"start": 1822, "end": 1824, "text": "But it's not set that we would."}, {"start": 1824, "end": 1825, "text": "I think that's something we would consider."}, {"start": 1825, "end": 1828, "text": "And we'll evaluate when the divestments happen."}, {"start": 1829, "end": 1831, "text": "And the second question, sorry, what was it?"}]}, {"speakerId": "S11", "sentences": [{"start": 1833, "end": 1837, "text": "Just a bit more color on how your talks with S&P are going, because a lot has happened since they last published."}, {"start": 1837, "end": 1841, "text": "So any color on when is the next review or anything of that sort."}]}, {"speakerId": "S8", "sentences": [{"start": 1841, "end": 1842, "text": "Right."}, {"start": 1842, "end": 1842, "text": "I mean."}]}, {"speakerId": "S2", "sentences": [{"start": 1842, "end": 1844, "text": "We are in frequent dialogue."}, {"start": 1844, "end": 1848, "text": "We expect to talk to them, obviously, after these results."}, {"start": 1848, "end": 1855, "text": "We don't really know when they intend to publish, but last year they published a note in December."}, {"start": 1855, "end": 1860, "text": "So it's possible that they do the same this year, but we don't really know when they intend to say something.<br /><br />"}]}, {"speakerId": "S3", "sentences": [{"start": 1861, "end": 1861, "text": "Yeah."}, {"start": 1861, "end": 1866, "text": "I would just say, you know, we spoke with them a few weeks ago."}, {"start": 1866, "end": 1877, "text": "And in that conversation, I think, you know, we shared a bit of information about our divestment pipeline and what was coming down the pike in the near term."}, {"start": 1877, "end": 1895, "text": "And I can't speak for them, but the feedback we got was that it provided some level of comfort for them, there is progress being made here, and that they will continue to see traction as it relates to our efforts there."}]}, {"speakerId": "S11", "sentences": [{"start": 1896, "end": 1898, "text": "Thank you very much and good luck with the disposal."}]}, {"speakerId": "S3", "sentences": [{"start": 1899, "end": 1899, "text": "Thank you very much."}, {"start": 1899, "end": 1900, "text": "Appreciate it."}]}, {"speakerId": "S4", "sentences": [{"start": 1905, "end": 1912, "text": "There are no more questions at this time, so I hand the conference back to the speakers for any closing comments."}]}, {"speakerId": "S3", "sentences": [{"start": 1913, "end": 1914, "text": "Thank you, everybody."}, {"start": 1914, "end": 1918, "text": "We really appreciate you taking the time to follow us."}, {"start": 1918, "end": 1924, "text": "As always, we are available for any questions you might have after the call."}, {"start": 1924, "end": 1940, "text": "Once again, I would just like to reiterate our strong conviction in the current state of the business, which is why we felt comfortable raising the lower end of our guidance. We look forward to discussing this further with you in the future."}, {"start": 1940, "end": 1941, "text": "Thank you."}]}], "speakers": [{"speakerId": "S1", "name": "Annie Dorko"}, {"speakerId": "S2", "name": "Sakari Järvelä"}, {"speakerId": "S3", "name": "Scott"}, {"speakerId": "S4", "name": "Operator"}, {"speakerId": "S5", "name": "Rob Virdi"}, {"speakerId": "S6", "name": "Unknown 1"}, {"speakerId": "S7", "name": "Michael Chookagian"}, {"speakerId": "S8", "name": "Unknown 2"}, {"speakerId": "S9", "name": "Shubham Agarwal"}, {"speakerId": "S10", "name": "Unknown 3"}, {"speakerId": "S11", "name": "Neeraj Kumar"}, {"speakerId": "UU", "name": "Unknown 4"}], "id": "672c7dbcd06125d14b121a66", "createdAt": "2024-11-07T08:43:40.766Z", "updatedAt": "2024-11-07T08:43:40.766Z", "langCode": "en", "transcriptType": "ENHANCED", "amberscriptJobId": null, "speechmaticsJobId": "l1qsobd810", "eventId": "6579714ed8eec1001298786a"}