JANUARY - JUNE 2006, JM GROUP. Significantly Increased Profitability and Continued Strong Sales

Transcription

1 Interim Report JANUARY - JUNE 2006, JM GROUP 2/2006 Significantly Increased Profitability and Continued Strong Sales Income increased by 27 percent to SEK 5,809m (4,592) and the number of sold residential units totaled 2,060 (2,124) Earnings before tax improved substantially to SEK 819m (364) and net earnings for the period after tax rose to SEK 675m (255). The operating margin increased to 14.5 percent (9.4) Property sales of SEK 805m (438) provided capital gains of SEK 121m (69) Return on equity for the past twelve months rose to 46 percent (17). Earnings per share for the first six months of the year climbed to SEK 6.80 (2.30) The Group's cash flow including property sales was SEK 704m (1,255) Income 5,809 4,592 2,911 2,538 11,104 9,887 Operating profit ,639 1,231 Earnings before tax ,606 1,151 Cash flow from operating activities 704 1, ,817 3,368 Operating margin (%) Return on equity (%) Equity/assets ratio (%) Earnings per share (SEK) Number of housing starts 1,860 1,861 1,088 1,080 4,475 4,476 Number of residential units sold 2,060 2,124 1,114 1,103 4,176 4,240 JM applies International Financial Reporting Standards (IFRS). 1 (16)

2 GROUP "Continued strong sales and large number of housing starts at higher prices raise profitability substantially with increased margins and returns. Our efficiency enhancements in the projects help us to achieve continued good cost control. High sales in ongoing production and continued strong demand for our newly built residential units mean continued favorable conditions for 2006." Johan Skoglund, President and CEO. Market, sales and housing starts Demand for newly built homes remains favorable throughout Sweden and in JM's international markets. Generally low interest rates contribute to this favorable trend. The number of sold residential units in the form of signed contracts totaled 2,060 (2,124) and the percentage of sold or reserved residential units in relation to ongoing production continues to be very high. The number of housing starts amounted to 1,860 (1,86, including 736 (847) in the Stockholm area and 709 (632) elsewhere in Sweden. Housing starts in international operations totaled 415 (382). Income, operating profit and operating margin Consolidated income during the first six months of the year increased by 27 percent to SEK 5,809m (4,592) and were attributable to the high level of housing starts at higher prices over the past few quarters and a higher percentage of particularly well-located projects. Operating profit climbed to SEK 841m (433) and operating margin rose to 14.5 percent (9.4). Operating profit and operating margin improved substantially due to strong demand, higher prices for residential units and efficiency enhancements completed to date. Efficiency enhancements have focused on restructuring planning procedures more consistently within the Group and establishing strategic procurement agreements with selected providers. The projects exercise good cost control, though a certain tendency for rising costs can be seen, especially in Norway. During the period JM sold properties for SEK 805 m (438) with a capital gain of SEK 121m (69). Rental income from JM s project properties totaled SEK 41m (105), with residential properties accounting for SEK 30m (55). Net operating income totaled SEK 17m (32). January-June April - June July - June Operating profit (SEK m) /06 JM Residential Stockholm JM Residential Sweden JM International JM Property Development JM Production Group-wide expenses Total ,639 Including property sales January-June April - June July - June Operating margin (%) /06 JM Residential Stockholm JM Residential Sweden JM International JM Production Building Rights JM's available building rights increased to 26,700 residential units (22,750) of which 16,300 (13,100) are recognized in the balance sheet. The Group increased its holdings of building rights in all markets, especially in the Swedish business excluding Stockholm. Capital tied up in building rights (development properties in the balance sheet) for residential units totaled SEK 3,370 m (2,546) at the end of the first six months of the year. After the end of the reporting period JM reached an agreement with Vasakronan for the acquisition of land for about 2,000 residential units in Solna and Sundbyberg, Stockholm. The acquisition includes about 650 residential units in a first phase, followed by about 1,350 more residential units through an option agreement. As part of the transaction, Vasakronan will acquire from JM two recently built office buildings in Frösunda, Solna, for a total of 20,000 sq.m. with possession in 2007 and 2009, respectively. 2 (16)

3 In addition Vasakronan will acquire from JM land zoned for office buildings in the same area with building rights for a total of about 20,000 sq.m. with possession in 2006 and 2007, respectively. Vasakronan and JM will develop the office building rights together. Project Properties Occupancy rate Book value SEK m annual rent, Residential units (tenancy rights) 100% Properties under development 64% Fully developed commercial properties 100% 38 1, Total 797 2,071 1,183 Financial Items Net financial items improved by SEK 47m compared with the same period the previous year. Costs for early redemption of loans during the first half of the year totaled SEK 16 m (19). All interest rate derivatives have been terminated. Financial income increased as a result of a high balance of cash and cash equivalents. Financial income Financial expenses Financial income and expenses During the first half of the year total interest-bearing loans decreased by SEK 385m to SEK 735m (1,402), of which the provision for pensions totaled SEK 492m (466). At the end of the first half of the year, the average interest rate for interest-bearing loans including the provision for pensions was 4.2 percent (4.5). The average term for fixed-rate loans excluding pension liabilities is 0.6 years (1.8). The Group's available liquidity was SEK 4,343m (3,137). Aside from cash and cash equivalents of SEK 1,543m (782) this includes unused overdraft facilities and credit lines totaling SEK 2,800m (2,355). Interest-bearing net receivable/debt totaled SEK 837m (-557) at the end of the first six months of the year after the redemption of shares and dividends for a total of SEK 1.2bn. Interest-bearing net receivable(+) / debt (-) at beginning of period 1, , Change in interest-bearing net receivable/ debt ,394 2,149 Interest-bearing net receivable(+) / debt (-) at end of period ,536 Cash Flow Cash flow from current operations amounted to SEK 704m (1,255). Cash flow from property development (project properties) made a net contribution of about SEK 350m (200). Dissolution of the Group's SEK 1.0bn tax allocation reserve in Sweden in 2005 resulted in a tax payment of SEK 0.3bn in February For the most part, investments in development properties made during the first half of the year of about SEK 1.1bn will be paid for in the future and therefore do not burden cash flow during the period. Personnel The number of employees at the end of the first six months of the year amounted to 2,228 (2,209). The number of wage earners was 1,141(1,158) and the number of salaried employees 1,087 (1,05. Redemption of Own Shares and Split During the second quarter JM carried out a redemption program of its own shares. According to the offer, every fifteenth share could be redeemed for a cash payment of SEK 625. A total of 1,603,939 shares were redeemed and a total of SEK 1,002m transferred to the shareholders at the end of the second quarter. After the redemption JM's share capital amounts to SEK 92.3m. 3 (16)

4 The 4:1 share split that JM's Annual General Meeting approved was carried out during the end of the second quarter. This means that one previous share was replaced by four new shares. The split meant that after redemption the number of outstanding shares increased from 23,072,441 to 92,289,764 shares. After the split a trading block of JM shares was changed from 100 to 200 shares. BUSINESS SEGMENTS JM RESIDENTIAL STOCKHOLM The JM Residential Stockholm business segment develops residential projects in Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Income 2,293 1,885 1,073 1,017 4,224 3,816 Operating profit Operating margin (%) Average operating capital 1,007 1,488 Return on operating capital (%) Operating cash flow ,568 1,416 Book value of development properties 1,155 1,443 1,337 Number of available building rights 9,500 9,500 9,200 Number of housing starts ,826 1,937 Number of residential units sold ,713 1,754 Number of employees Including property sales Demand continues to be strong. Housing prices continue to rise. During the past year, both interest in and demand for newly built homes increased. The supply of new homes in the Stockholm region has not increased at the same rate as demand. Competition for development land is strong due to high demand and the rising prices of residential units. The business segment's income increased by 22 percent to SEK 2,293m (1,885) and operating profit increased 77 percent to SEK 379m (214), including property sales for SEK 5m (34). The operating margin rose to 16.5 percent (11.4). The increased operating margin can be attributed to higher prices for the projects, implemented efficiency enhancements and good cost control. Cash flow improved because of increased operating profit and decreased investments in development properties. JM acquired building rights equivalent to about 130 residential units in Huddinge and Täby during the second quarter. Also during the second quarter JM started production of 301 housing units, including 49 singlefamily homes, with housing starts in Huddinge, Järfälla, Stockholm, Södertälje, Täby and the municipality of Värmdö. JM RESIDENTIAL SWEDEN The JM Residential Sweden business segment develops residential projects in growth areas in Sweden, excluding Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Contracting operations are also conducted to a limited extent. Income 1,820 1, ,371 3,012 Operating profit Operating margin (%) Average operating capital Return on operating capital (%) Operating cash flow Book value of development properties 1, Number of available building rights 10,400 7,900 8,400 Number of housing starts ,528 1,451 Number of residential units sold ,409 1,411 Number of employees Including property sales (16)

5 Demand remains high and there is considerable interest in new projects. Housing prices are stable or cautiously rising in most locations within the business segment and rising in particularly attractive areas. The business segment's income increased by 25 percent to SEK 1,820m (1,46 and operating profit increased by 93 percent to SEK 243m (126). The operating margin was 13.4 percent (8.6). The increased operating margin can be attributed to higher prices for the projects, implemented efficiency enhancements and good cost control. The lower cash flow is due to increased investments in development properties. During the second quarter JM acquired building rights equivalent to almost 1,200 residential units in Malmö, Mölndal, Göteborg, Jönköping, Strängnäs, Västerås and Uppsala. In addition, JM sold about 50 building rights in Västerås. All in all, JM had housing starts during the second quarter for 388 residential units in apartment blocks, including 38 in Skåne, 62 in Halmstad, 137 in the Göteborg region, 34 in Vallentuna and 117 in Uppsala. JM also carried out housing starts for a total of 95 single-family homes during the second quarter, 86 of which were in the southern province of Skåne. JM INTERNATIONAL The JM International business segment develops and sells residential properties in Norway, Denmark and Belgium. The segment is in the process of establishing business operations in Finland. Income 1, ,470 2,069 Operating profit Operating margin (%) Average operating capital 1,093 1,118 Return on operating capital (%) Operating cash flow Book value of development properties 1, Book value of project properties Number of available building rights 6,800 5,350 5,600 Number of housing starts ,121 1,088 Number of residential units sold ,054 1,075 Number of employees Including property sales A long period of rising housing prices has attracted new players to JM's international markets, which in turn has forced up prices of new building rights. However, the present holding of building rights and efficiency enhancements in project implementation provide generally favorable conditions for JM's business. The business segment's income increased by 47 percent to SEK 1,254m (853) due to increased income in Denmark and Norway. Operating profit increased to SEK 117m (67), mainly attributable to favorable sales in current projects, as well as gains on property sales in JM Belgium during first quarter. The operating margin increased to 9.3 percent (7.9). Cash flow improved because of the increased operating profit and property sales during the period. The Finland operation is making progress and during the quarter the municipal executive board in Kervo municipality, located outside of Helsinki, decided to sell 14,000 sq.m. of land to JM. JM plans to develop a residential area for about 30 single-family homes. Norway The housing market in Norway is characterized by continued good demand and rising prices. The supply of newly built homes is large, at the same time that competition for residentially zoned land has intensified. Production costs are continuing to rise during During the first half of the year 342 residential units (310) were sold and housing starts totaled 224 (295). Second quarter housing starts totaled 182 residential units, including about 50 in Oslo and about 50 in Stavanger. Available building rights correspond to about 5,100 residential units (4,150). Denmark Activity in the housing market in Copenhagen remains high. Prices have leveled off after a sharp upswing in 2005 and earlier in The supply of newly built homes has increased and interest has risen during the year. During the first six months of the year 132 residential units (173) were 5 (16)

6 sold and housing starts totaled 191 (48). About 70 of the quarter's housing starts were in Havnestad Syd, in central Copenhagen's harbor area, and about 50 in the harbor area in Køge. During the second quarter JM acquired 350 building rights by Copenhagen's harbor and another 100 building rights centrally located in Copenhagen. Available building rights correspond to about 1,200 residential units (850). Belgium Belgium's housing market continues to be strong with an increased supply of new residential units. In the Brussels region prices have leveled off at a higher level and production costs have increased somewhat. During the first six months of the year 12 residential units (24) were sold and housing starts totaled 0 (39). No acquisitions were made during the second quarter. Available building rights correspond to about 500 residential units (350). JM PROPERTY DEVELOPMENT The JM Property Development business segment develops residential and commercial properties in Greater Stockholm. The business segment s portfolio entirely comprises properties for project development. Income Operating profit Average operating capital 1,282 1,704 Return on operating capital (%) Operating cash flow ,247 Book value of development properties Book value of project properties 765 1, Number of employees Including property sales The business segment's income totaled SEK 50m (130) and operating income climbed to SEK 95m (28). The improved profitability can be attributed to higher gains from property sales. During the first half of 2006 JM sold project properties for SEK 395m (198) with capital gains of SEK 97m (23). Gains on property sales do not include utilized rental guarantees of SEK 6m and an additional purchase sum of SEK 4m, as well as dissolution of previous provisions, in conjunction with property sales for SEK 9m. During the second quarter JM carried out a trade in which the remaining property portfolio in Vaxholm was sold with gains of SEK 42m. The deal resulted in a positive cash flow of SEK 230m, received at the time of possession in early July. During the second quarter as a component in its residential development project strategy, JM acquired three residential properties with 111 residential units at Gullmarsplan for SEK 113m. JM's building rights for commercial project development total about 84,000 sq.m. with a carrying amount of SEK 140m, including 22,000 sq.m. for building rights in Frösunda Park. The Frösunda Park office project building 1 in Solna with 10,000 sq.m. will be completed in December During the first half of the year two leases were signed for a total of about 3,500 sq.m. with occupancy during spring 2007, resulting in an occupancy rate for the project of about 36 percent. 6 (16)

7 JM PRODUCTION The JM Production business segment carries out construction work for external and internal customers in the Greater Stockholm area. Income ,426 1,197 Operating profit Operating margin (%) Operating cash flow Number of employees Demand for contracting operations in the Stockholm market continues to be strong. Orders are good in the business segment and production is in an intensive phase with many current projects, both large and small. The business segment's income totaled SEK 709m (480) and operating income climbed to SEK 30m (24). The operating margin was 4.2 percent (5.0). The business segment received several major construction jobs during the first half of the year, the largest of which include a new construction project at Arlanda Airport for the Swedish Civil Aviation Administration, excavation work in Bromma for KF Fastigheter and excavation work at Sophiahemmet for Stiftelsen Sophiahemmet Ideell Förening. Large projects currently underway include the renovation of Hotell Anglais for AFA Sjukförsäkringsaktiebolag, renovation of the Bremen commercial property at Gärdet for Vasakronan and new construction of offices in Frösunda for JM Property Development. The divestiture of JM Production's painting business during Q reduced the number of employees by approximately (16)

8 CONSOLIDATED INCOME STATEMENT IN BRIEF Income 5,809 4,592 2,911 2,538 11,104 9,887 Costs for production and management -4,765-3,923-2,320-2,148-9,169-8,327 Gross profit 1, ,935 1,560 Selling and administrative expenses Gains on the sale of properties Operating profit ,639 1,231 Financial income and expenses Earnings before tax ,606 1,151 Taxes Net profit for the period , Attributable to: Equity holders of the parent , Earnings per share (before and after dilution, (SEK) attributable to equity holders of the parent 2) Number of shares at close of period 2) 92,289,764 98,705,520 92,289,764 98,705,520 92,289,764 98,705,520 Average number of shares before and after dilution 2) 98,670, ,186,732 98,635, ,112,660 98,687, ,390,724 2) The low tax expense is due to acquisition of loss carry-forward during the first quarter and dissolution of deferred tax liabilities in conjunction with the sale of properties during the second quarter. Comparative figures have been restated due to the share split. CONSOLIDATED BALANCE SHEET IN BRIEF SEK m ASSETS Fixed assets Project properties 797 2,071 1,183 Development properties 3,513 2,734 2,925 Participations in tenant-owner co-operatives, etc Current receivables 1,625 1,497 1,241 Cash and cash equivalents 1, ,634 Total current assets 7,505 7,209 8,021 Total assets 7,646 7,400 8,155 EQUITY & LIABILITIES Shareholder's equity 2,735 2,590 3,311 Non-current interest bearing liabilities Other non-current liabilities Non-current provisions 858 1, Total non-current liabilities 1,580 1,903 1,476 Current interest bearing liabilities Other current liabilities 3,107 2,714 3,283 Current provisions Total current liabilities 3,331 2,907 3,368 Total equity and liabilities 7,646 7,400 8,155 Pledged assets Contingent liabilities 6,113 5,444 5,053 Of which receivables from property sales (16)

9 CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY IN BRIEF January-June Full year SEK m Opening balance, January 1 3,311 3,465 3,465 Effect of changed accounting principles Adjusted opening balance 3,311 3,434 3,434 Fair value reserve (cash flow hedges) Translation differences Net sum of all entries charged or credited directly to equity Net profit for the period Total income and expenses for the period Dividend to equity holders of the parent Redemption of shares -1, Closing balance at end of period 2,735 2,590 3,311 IFRS adjustments, financial instruments CONSOLIDATED CASH FLOW STATEMENT (SUMMARY) Cash flow from operating activities before change in working capital Investments in development properties, etc ,517-1,188 Payment on acc. for development properties etc ,427 1,770 Investments in project properties Sale of project properties ,914 1,603 Change in current liabilities/receivables Cash flow from operating activities 704 1, ,817 3,368 Cash flow from investing activities Loans raised Amortization of loans Redemption of shares -1, , , Dividend Cash flow from financing activities -1,778-1,720-1,301-1,756-2,083-2,025 Cash flow for the period -1, , ,349 Cash and cash equivalents at end of period 1, , ,543 2,634 Dissolution of the Group's tax allocation reserves in the final accounts of 2005 for SEK 1bn resulted in a tax payment of SEK 0.3bn. KEY RATIOS % / Operating margin Pre-tax return on capital employed Return on equity Debt/equity ratio (x) Equity/assets ratio Accounting Principles This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, which complies with the requirements stipulated in the Swedish Financial Accounting Standards Council's recommendation RR 31 Interim Financial Reporting for Groups. The consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS). Since the Parent Company is an enterprise within the EU, only EU-approved IFRS will be applied. The accounting principles applied in this interim report are described in the 2005 Annual Report, pages (16)

10 INCOME BY COUNTRY Sweden 4,555 3,739 2,200 2,018 8,634 7,818 Norway ,487 1,315 Denmark Belgium Total 5,809 4,592 2,911 2,538 11,104 9,887 INCOME BY BUSINESS SEGMENT JM Residential Stockholm 2,293 1,885 1,073 1,017 4,224 3,816 JM Residential Sweden 1,820 1, ,371 3,012 JM International 1, ,470 2,069 JM Property Development JM Production ,426 1,197 Eliminations Total 5,809 4,592 2,911 2,538 11,104 9,887 OPERATING PROFIT BY BUSINESS SEGMENT JM Residential Stockholm JM Residential Sweden JM International JM Property Development JM Production Group-wide expenses Total ,639 1,231 OPERATING MARGIN BY BUSINESS SEGMENT % / JM Residential Stockholm JM Residential Sweden JM International JM Production AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT July - June Full year SEK m 2005/ JM Residential Stockholm 1,007 1,488 JM Residential Sweden JM International 1,093 1,118 JM Property Development 1,282 1,704 RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT July - June Full year % 2005/ JM Residential Stockholm JM Residential Sweden JM International JM Property Development (16)

11 OPERATING CASH FLOW BY BUSINESS SEGMENT JM Residential Stockholm ,568 1,416 JM Residential Sweden JM International JM Property Development ,247 JM Production DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT Book value, SEK m JM Residential Stockholm 1,155 1,443 1,337 JM Residential Sweden 1, JM International 1, JM Property Development JM Production Total 3,513 2,734 2,925 AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT Number Total number of residential building rights JM Residential Stockholm 9,500 9,500 9,200 JM Residential Sweden 10,400 7,900 8,400 JM International 6,800 5,350 5,600 Total 26,700 22,750 23,200 recognized in the balance sheet (development properties) JM Residential Stockholm 6,200 6,800 6,600 JM Residential Sweden 6,000 4,300 5,000 JM International 4,100 2,000 3,400 Total 16,300 13,100 15,000 HOUSING STARTS BY BUSINESS SEGMENT Number / JM Residential Stockholm ,826 1,937 JM Residential Sweden ,528 1,451 JM International ,121 1,088 Total 1,860 1,861 1,088 1,080 4,475 4,476 RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT Number / JM Residential Stockholm ,713 1,754 JM Residential Sweden ,409 1,411 JM International ,054 1,075 Total 2,060 2,124 1,114 1,103 4,176 4, (16)

12 Parent Company The Parent Company's profit before appropriations and tax was SEK 379m (24. Investments in properties totaled SEK 432m (234). Stockholm, August 23, 2006 Johan Skoglund President Audit Report This auditors report of the review of an interim report is prepared in accordance with IAS 34 and the Annual Accounts Act. Introduction We have conducted a review of this summary of interim financial information (interim report) for JM AB as of June 30, 2006 and the six-month period preceding that date. The Board of Directors and the President are responsible for preparing and presenting this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by FAR. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing in Sweden RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim report is not prepared, in all material respects, in accordance with IAS 34 and the Annual Accounts Act. Stockholm, August 23, 2006 Ernst & Young AB Ingemar Rindstig Authorized public accountant Lars Träff Authorized public accountant 12 (16)

13 GROUP FIVE-YEAR OVERVIEW SEK m Income 9,887 8,532 7,787 8,872 8,642 Operating profit 1, ,964 Earnings before tax 1, ,629 Balance sheet total 8,155 8,252 9,145 10,628 12,888 Cash flow from operating activities 3,368 2,161 1,504 2,161 1,111 Interest-bearing net receivable(+) / debt (-) 1, ,611-3,665-5,220 Operating margin (%) 2) Return on equity (%) Equity/assets ratio (%) Earnings per share (SEK) 3) Dividend per share (SEK) 3) Number of available building rights 23,200 21,900 23,400 25,500 27,000 Number of housing starts 4,476 3,943 2,714 2,711 2,900 Number of residential units sold 4,240 4,315 3,189 2,511 2,255 2) 3) 2003 financial year and earlier are not restated according to IFRS. This means that the new principles for goodwill and for using the percentage of completion method as a basis for calculations did not affect the years between 2001 and financial year and earlier operating margin corresponds to project development margin. Profit and earnings per share have been restated as a result of the share split. 13 (16)

14 GROUP QUARTERLY OVERVIEW, SEK M INCOME STATEMENT Q 4 Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Income Costs for production and management Gross profit Selling and administrative expenses Gains on the sale of properties Operating profit Financial income and expenses Earnings before tax Taxes 2,911 2,898-2,320-2, ,876 2,419 2,538 2,054-2,352-2,052-2,148-1, Net earnings for the period BALANCE SHEET Assets Fixed assets Project properties Development properties Participations in tenant-owner co-operatives, etc. Current receivables Cash and cash equivalents Total current assets Total assets Equity & liabilities Shareholder's equity Non-current interest bearing liabilities Other non-current liabilities Non-current provisions Total non-current liabilities Current interest bearing liabilities Other current liabilities Current provisions Total current liabilities Total shareholders' equity and liabilities CASH FLOW STATEMENT Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Total cash flow for the period Cash and cash equivalents at end of period INTEREST-BEARING NET RECEIVABLES/ LIABILITIES Interest-bearing net receivable(+) / debt (-) at beginning of period Change in interest-bearing net receivable/debt Interest-bearing net receivable(+) / debt (-) at end of period KEY RATIOS Operating margin (%) Debt/equity ratio (x) Equity/assets ratio (%) Earnings per share (SEK) Number of available building rights Number of housing starts Number of residential units sold ,513 2, ,625 1,533 1,543 2,208 7,505 7,369 7,646 7,511 2,735 3, ,580 1, ,107 2, ,331 2,861 7,646 7,511 Q 2 Q , ,543 2,208 Q 2 Q 1 1,587 1, ,587 Q 2 Q ,700 23,200 1, , ,183 2,038 2,071 2,041 2,925 2,629 2,734 2, ,241 1,725 1,497 1,512 2,634 1, ,797 8,021 7,458 7,209 8,410 8,155 7,622 7,400 8,601 3,311 2,876 2,590 3, , ,002 1,101 1,056 1,476 1,796 1,903 2, ,283 2,745 2,714 2, ,368 2,950 2,907 2,813 8,155 7,622 7,400 8,601 Q 4 Q 3 Q 2 Q 1 1, , , , ,634 1, ,797 Q 4 Q 3 Q 2 Q , , Q 4 Q 3 Q 2 Q ,200 23,200 22,750 22,300 1, , , ,103 1, (16)

15 BUSINESS SEGMENTS QUARTERLY OVERVIEW, SEK M JM Residential Stockholm Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Income Operating profit Operating margin (%) Average operating capital Return on operating capital (%) 2) Operating cash flow Book value of development properties Number of available building rights Number of housing starts Number of residential units sold 1,073 1, ,007 1, ,155 1,110 9,500 8, , , ,488 1,733 1,935 2, ,337 1,309 1,443 1,590 9,200 9,700 9,500 9, Including property sales JM RESIDENTIAL SWEDEN Income Operating profit Operating margin (%) Average operating capital Return on operating capital (%) 2) Operating cash flow Book value of development properties Number of available building rights Number of housing starts Number of residential units sold Q 2 Q , ,400 8, Q 4 Q 3 Q 2 Q ,400 8,400 7,900 7, Including property sales JM INTERNATIONAL Income Operating profit Operating margin (%) Average operating capital Return on operating capital (%) 2) Operating cash flow Book value of development properties Book value of project properties Number of available building rights Number of housing starts Number of residential units sold Q 2 Q ,093 1, , ,800 6, Q 4 Q 3 Q 2 Q ,118 1,085 1,055 1, ,600 5,100 5,350 5, Including property sales JM PROPERTY DEVELOPMENT Income Operating profit Average operating capital Return on operating capital (%) 2) Operating cash flow Book value of development properties Book value of project properties Q 2 Q ,282 1, Q 4 Q 3 Q 2 Q ,704 1,941 2,014 2, , ,652 1,647 1,627 Including property sales JM PRODUCTION Income Operating profit Operating margin (%) Operating cash flow JM OTHER Income (elimination) Operating profit (group-wide expenses) Q 2 Q Q 2 Q Q 4 Q 3 Q 2 Q Q 4 Q 3 Q 2 Q ) Calculated on 12-month rolling profits and average capital. 15 (16)

16 JM AB (publ) Mailing address SE Stockholm Street address Telegrafgatan 4, Solna Telephone +46 (0) Fax +46 (0) Company reg. no Website For additional information, please contact: Johan Skoglund, President and CEO +46 (0) Claes Magnus Åkesson, CFO +46 (0) Future reporting dates October 24, 2006 Interim Report January - September 2006 February 13, 2007 Year-end Report 2006 JM is one of the Nordic region s leading developers of housing and residential areas. Operations focus on new production of homes in attractive locations, with the main focus on expanding metropolitan areas and university towns in Sweden, Norway, Denmark and Belgium. We are also involved in project development of commercial premises and contract work, primarily in the Greater Stockholm area. Our annual sales total approximately SEK 10 billion and the company has about 2,200 employees. JM is a public limited company and is listed on the Stockholm Stock Exchange A list. 16 (16)