Preliminary Report on 1998 Operations

Property revenue for 1998 amounted to SEK 234.6 M (152.2). The operating net rose by
SEK 66.1 M to SEK 186.8 M (120.7). This increase is attributable mainly to acquired hotel properties. In addition, the strong hotel business climate resulted in increased revenues
from sales- and income-related leases.

The adjusted direct return for the period was 9.3% (9.0).

Net financial expense for the period amounted to SEK 71.3 M (expense: 50.3).

Group income, after tax, for the period improved by SEK 34.3 M and amounted to SEK 61.5 M (27.2).

During the year, Pandox acquired and took possession of nine hotel properties. During March, the Group took possession of eight hotel properties acquired from Fastighets AB Tornet, while the Radisson SAS Hotel in Luleå, which was acquired from the Max Group, was taken over in September. Källhagens Wärdshus and the office property Överkikaren 19 were sold, whereby Pandox owns exclusively hotel properties. In November 1998, agreement was reached covering the right to acquire the Provobis Star Hotel in Lund. In 1999, Pandox exercised its right and took possession of the property on January 26, 1999.

The complete report including tables is available to download from the enclosed link below.