Pandox' Year-End Report 2009

Year-End Report 2009

• Despite the troubled global climate, Pandox' cash flow from current operations increased to SEK 446.4 million, representing an improvement of SEK 1.9 million.
• Property management revenues amounted to SEK 895.2 million, representing a decline of 2.3 percent. For comparable units, including an adjustment for currency effects, the decrease was 7 percent compared with last year.
• Revenues from Pandox' own operations fell by SEK 10.3 million to SEK 1,095.0 million.
• Profit before tax, excluding non-recurring items, amounted to SEK 252.5 million (280.4). The decline is attributable to the poorer hotel economic climate and that several major refurbishment projects were carried out during the year.
• Profit before tax, including non-recurring items, amounted to SEK 332.0 million, of which SEK 79.5 million pertains to capital gains further to the sale of shares in the hotel property company HOST Hotels & Resorts Inc.
• Pandox signed an agreement in May with Choice Hotels Scandinavia to take over the operations of Quality Park Hotel in Södertälje.
• Pandox became new owner of the hotel property Vildmarkshotellet in Kolmården on 1 September. The purchase price was SEK 160 million.

Global demand in the hotel sector has fallen substantially since the end of 2008 as a result of a troubled surrounding world with a broad financial crisis and subsequent economic downturn. In general, revenues in North America and Europe have declined by almost 18 percent, while the markets where Pandox is represented decreased by about 10 percent. Pandox' hotel property portfolio has performed better than others in this unsettled global climate. The relative decline amounts to 7 percent for comparable units and adjusted for currency effects. The driving force behind the relatively good developments is a combination of Pandox' active ownership, the good quality of the portfolio, the business model with a mix of leases and own operations. It is satisfying to observe that several of the major investments carried out by Pandox in recent years are showing positive developments. All in all, the Company's cash flow has increased, albeit marginally, while property management revenues have declined.

For further information, please contact:

Anders Nissen
CEO Pandox AB 
+46 (0)8 506 205 50 
+46 (0)708 46 02 02
anders.nissen@pandox.se

Liia Nõu
CFO Pandox AB
+46 (0)8 506 205 80 
+46 (0)70 237 44 04 
liia.nou@pandox.se

Pandox is one of the leading players in the hotel property market in Europe. The portfolio consists of 46 hotels, nine own operations with 11,100 rooms at strategic locations in Sweden, Denmark, Germany, Belgium, the UK, Switzerland, the Bahamas and Canada. Pandox' hotels operate under well-known brands such as Scandic, Hilton, InterContinental, Hyatt, Radisson BLU, Crowne Plaza, Holiday Inn, Elite, Clarion, Quality, First or through independent distribution channels.

Encl: Complete Year-End Report.