Interim Report January - September 2002

Total property revenue for the first nine months of 2002 decreased by 2.1 per cent compared to the previous year and amounted to SEK 421.1 M (430.3). The decrease in revenue is attributable to a weaker hotel market as well as loss of revenue from divested hotel properties. For comparable units the decrease amounted to 2.5 per cent. Operating net amounted to SEK 351.1 M (358.7).
The adjusted direct yield for the period was 9.4 (9.6) per cent.
Net financial expense for the period amounted to SEK -129.3 M (-136.5).
Corporate group income before tax, exclusive of non-recurring revenue, amounted to SEK 149.5 M (156.4).
Cash flow amounted to SEK 197.1 M (197.1).

- "Pandox strategy continues to have the intended effect. The high quality hotel property portfolio, strategic alliances with the strongest brand names in the hotel market and an active risk management has limited the decrease in revenue and income while cash flow continues to be on a par with last year", says Anders Nissen, Chief Executive Officer, Pandox AB.

Outlook
Economic trends in Pandox' market sector continue to be difficult to predict due to prevailing global uncertainties. The current pattern is for the downturn to abate in the international hotel markets, while domestic markets remain relatively stable. Pandox believes that a more stable global situation without threat of war along with a more dynamic economic activity is required for the markets to recover. Pandox' focused strategy, selected market segment, and high quality hotel property portfolio create however excellent prerequisites for the further development of the Company.
Pandox' profits after the first nine months are in line with previous forecasts for the full-year, implying that the Company can reiterate its forecast of a profit, before tax and excluding non-recurring revenue, of SEK 200 M.

Encl: Complete Interim Report.