Good morning, everyone, and welcome to Citicom's H1 twenty nineteen Results Audiocast. Earlier today, we published our half year report for the January 2019 period. All material is available on Citicorp's website under Investors. My name is Mick Pohela, and I'm Citicorp's IR and Communications Director. And here with me in the room, I have our CEO, F.
Scott Ball and our CFO and Executive Vice President, Eero Sigimonen. Scott will start the audio cast with a summary and the operational figures for the reporting period. This will be followed by Eero's review of the financial figures for the January 2019 period. Scott will conclude the presentation by talking about some of Asiticon's focus areas for the rest of the year. And after the audiocast, you will have a chance to ask questions.
Scott, please go ahead.
Thank you, Mikko, and good morning, everyone. I'm pleased to present an overview of the 2019 and the key highlights. I'll discuss a couple of significant events of the second quarter, after which I'll present figures. This will be followed by a more comprehensive financial overview by Arrow, after which I will conclude the audio cast with a few remarks about our priorities going forward. Some of the highlights of the first half of the year include: our EPRA EPS continued to grow and reached $0.04 $18 through June our administrative expenses, excluding the one off costs related to organizational change, declined year over year we had a solid operational start to the year Occupancy remained strong at 95.6%, and leasing spreads continued to be positive.
Like for like NRI growth grew slightly compared to previous years, while total NRI grew by 2%. We were particularly pleased with the like for like development in Finland. Total tenant sales and footfall both showed clear growth driven by Mondal Galleria. During the quarter, we signed a significant lease with the city of Lotte, who will open a new municipal service square in Trio, which I will discuss in more detail later. In June, our flagship asset in Issa Omana in Finland received recognition from the Nordic Council of Shopping Centers and was awarded the best Nordic shopping center.
During the quarter, we also successfully sold two shopping centers in Finland at book value. After a solid first half of the year and the impact of disposals of Arabia and Duo, we are expecting EPRA EPS of $0.07 $85 to $0.85 for the full year 2019. During Q2 twenty nineteen, we continued to strengthen our team. You might recall during the first quarter of the year, we introduced a new organization. The aim of the structure is to improve asset level focus and remove boundaries between countries and functions.
The ultimate goal is to intensify focus on asset management as well as improve G and A efficiency. The new organization includes full P and L responsibility for our center managers and will incentivize our personnel to intensify their efforts to maximize value at each of the assets. In addition, we have separated leasing and special leasing into their own respective business units with the aim of intensifying our efforts in our common area leasing and media sales. Also within the operations team, we have formed a completely new function and team whose aim is to harmonize processes and standards across our operating countries. During the 2019, the onboarding of this new organization continued.
In addition, we also introduced a new extended management committee. The aim of this EMC is to create shared leadership in the company and to further break down silos within the organization. We made several key recruitments during the 2019. Including in May, we announced the appointment of Eric Lenhammer as CityCon's new Chief Development Officer and a member of our Corporate Management Committee. He will join CityCon in August and lead CityCon's development team.
Eric is a great addition to our team and has a varied asset management and development background from various sectors. One of his first focus areas will be to exploit the densification opportunities within our portfolio. As mentioned previously, in May, we signed an agreement with the city of Lotte for a new municipal service square in our shopping center trio. This new service square will incorporate many of Latte's public services into a new concept with a focus on community building. They will occupy 1,000 square meters on the Second Floor of Trio, and the plan is to open this new service square late autumn of this year.
The city has also expressed interest to expand the service square to incorporate other public services into the Service Square after the first phase has been opened. For us, this is an important milestone in developing Trio, and the Service Square will be a significant improvement in the center's offering. We have a similar Service Square concept in Issa Omana, which acted as the model for this new Service Square in Latte. We have tremendously positive experiences from Issa Omana, where the library alone attracts 1,500,000 visitors annually. As a result, we are confident that the new Service Square and Trio will bring further footfall to the center and increase its appeal.
We are particularly pleased that this move will also significantly increase occupancy at the center. Another important event during the quarter was the opening of Lidl and Shista Galleria in a portion of the old former Aileen's department store. The first portion of this redevelopment happened in January when the Second Floor was occupied by H and M's A Found concept. The second important milestone was the Salido opening in June. And finally, ECA will open in the last section of the building later this year.
We are also revamping and refurbishing the center with a more modern look and feel, and the refurbishment of Sweden's largest food court has already begun and is progressing as planned. Also as mentioned, we are pleased that Issa Omana once again received recognition during the quarter. It was awarded the Best Nordic Shopping Center in 2019 by the Nordic Council of Shopping Centers. This is the third award for Issa Omana over this year. It was the first it was first awarded Finland's Best Shopping Center in 2018 by NCSC.
This spring, Issa Omana received the award as the best large shopping center expansion project in Europe by the International Council of Shopping Centers. And in June, it received an aforementioned award as the best shopping center in The Nordics. We are tremendously proud of these achievements and of Issa Omana. Issa Omana is a great example of our strategy and the prototype of asset we want to own in the future. Further, it's the validation of our strategy and ability to execute on our development pipeline.
The success of the center is also visible in the number of visitors and tenant sales in 2018, both increased significantly. And there's further opportunity to capitalize on the tremendous footfall growth of plus 74. We also continue to recycle capital during the second quarter. During this quarter, we announced the disposal of shopping centers Arabia and Duo in Finland. These assets were sold for €77,000,000 which was in line with the asset's latest IFRS fair value.
We were pleased with the transaction, which shows that there's investor demand for good retail assets with a diversified tenant mix. In addition, we divested a land plot next to the shopping center Columbus during the quarter. The buyer is planning to build around 900 residential units on the plot, which will provide additional footfall to Columbus and further strengthen our asset. The sale of the land plot next to Columbus is also further evidence of the kind of densification opportunities we have within our portfolio. The proceeds of the Duo and Arabia divestment were used to repay debt.
We made great progress in reshaping our portfolio. And as of today, our value is now more concentrated in our largest assets. Our top seven assets, including Issa Omana, Miramani in Finland, Lilyholm and Shista Galleria in Sweden, Wasson and Hercules in Norway and Roca Amadria in Estonia make up 50% of the value of our portfolio. These assets are not only the biggest, but are located in the largest and fastest growing markets. This concentration of value demonstrates our focus on owning the best assets in great cities with a focus on transportation.
We will exploit the opportunities in each of these assets for further densification. Looking at our portfolio operating metrics, footfall and tenant sales grew driven by Mondal Galleria. Our like for like net rental income grew slightly. The total net rental income grew by 2%. Errol will review this in more detail later in the presentation.
Occupancies at our shopping centers remained strong at 95.6%. We have a very stable business model with a resilient tenant mix, and this is visible in our occupancy rate, which has been almost within 100 basis points for each quarter over the last four years. Leasing spreads were also positive during the quarter, driven by Norway and Sweden. With that, I will hand this over to Eero to go through the financial figures.
Thank you, Scott, and good morning, everybody. I will start by reviewing Q2 financials, continuing then to the first six months. Like Scott mentioned, we had a good solid quarter for Q2, and our net rental income during the quarter did grow by €1,800,000 And a bit later, I will be explaining in detail what were the components of this growth. Also, operating profit did grow, and that did grow by €2,300,000 due to and a bit more than net rental income due to the fact that also SG and A costs contributed. EPRA earnings were €38,700,000 I.
E, euros 2,300,000.0 higher than in the comparison period. Turning over to the full first six months. We had a net rental income, which ended up at €109,700,000 which is €2,100,000 over previous comparison period. Direct operating profit, euros 98,400,000.0, I. E, euros 2,600,000.0 above and earnings, euros 74,500,000.0, I.
E, euros 2,000,000 over. And EPRA EPS ended up at $0.04 €18 And a bit later, I will also detail the impacts of the numbers to our guidance and full year forecast. Then starting with net rental income in a little bit more detail. We had Merlondal coming online, contributed mostly Merlondal by €2,600,000 this redevelopment projects, which more or less compensated for the income lost through divestments of the noncore centers, noncore properties, which proceeded quite nicely. And like for like was a positive figure.
And I would like to mention that for a very, very long time also, the Finnish portfolio, Finland plus Estonia showed modestly very modestly, but anyway, positive like for like, which was, of course, great news. We also started to implement the so called IFRS 16, and you will be finding a lot more details on IFRS 16, the so called leases standard in our full disclosure. But here, probably, it is enough to mention that on net rental income level, the implementation of IFRS 16 had a positive impact of 3,500,000 And the total other impact on our net rental income was 2,400,000.0 because we had a negative impact on the other hand from the currencies, I. E, both Swedish krona and Norwegian krona were weaker than at the end of comparison period and particularly weaker than on average last year. Whereas the Norwegian krone actually slightly strengthened from year end 2018, whereas Swedish krone weakened.
And as a result, we had a slightly negative translation result for the quarter. Then turning over to fair value changes. The total valuation result for the fair values for the quarter was minus €29,200,000 and the six monthly figure came at €46,800,000 minus and both these numbers without Sista and with 50% our stake in Sista Galleria, the negative valuation for the first six months was minus 53% and for the three months ending, minus 34.6%. And the main reason due for this negative valuation was a slight widening of noncore yields and slight changes in the market rents. The average yield requirement when with one decimal point did still stay at 5.3%, and the impact of slight widening did not move this needle.
Then having a quick look at Epranet asset value development. And we had positive earnings at €0.42 valuation impacted by €0.30 and a slight translation reserve due to the currencies, as mentioned, €0.03 and the dividends had overall, meaning that our EPRA NAV did end up at €12.77 for the quarter. We did not have any financing transactions during the quarter, but there was one change, I. E, our fixed portion of our debt portfolio slightly reduced to 83.3% due to the fact that the bond maturing in 2020, the remaining €290,000,000 that we have turned short term, and therefore, it's not categorized as fixed rate. And actually, we will gradually start looking into the refinancing of this €290,000,000 bond maturing in one year.
And now the interest rates are low and refinancing opportunities are ample. So I think that will that looks as okay for the time being. No other major changes to the financial targets. Amount of interest bearing debt slightly declined from the year end by approximately €30,000,000 and largely due to the fact that we did successfully close disposal of Duo and Arabia and naturally also invested into the redevelopment projects, which slightly compensated for that. But anyway, as a net the net result is that we had a lower interest bearing bearing debt compared to the end of the year.
Our loan to value ended up at 48.9%. And due to the movements in valuation, Arabia, Duo and repayment of the debt and FX movements, the next net impact is can be seen here, I. E, 48.9%. Then turning over to the outlook. And as promised, we have specified the outlook.
And the direct operating profit guidance now stands at 189,000,000 to €200,000,000 and EPRA earnings, euros 140,000,000 to €151,000,000 We in our previous forecast, we still had Arabia and Duo in, I. E, the two disposals just concluded. And you can easily calculate that approximate impact of that is to the tune of €3,000,000 And therefore, you can see that actually, the midpoint, taking into account the disposals, is the same or actually slightly better than in Q1. So our guidance, our outlook is more or less exactly the same as in Q1, although slightly better and naturally, clearly, more narrow because the band is now narrowed to €11,000,000 So the year looks seems to be pretty much as it seemed in Q1, I. E, fairly confident outlook is being provided.
And on EPRA EPS, it means that the guidance is now $0.07 €85 to €0.85 With that, I will turn back to you, Scott.
Thank you, Eero. I'd like to share some thoughts on the company's focus for the remainder of the year. We're in the process of developing Leap Alive in the Helsinki metropolitan area. We're very excited about Leap Alive and enjoy a strong relationship with the city of Espoo and the Metro. Foundation works at the site are progressing as planned and the project will contain a significant residential component.
This project will have many of the components that are contained in Issa Omana and we are confident it will become the new heart of the fast growing city of Espoo. We continue to focus on identifying and executing upon opportunities within our portfolio to create value through further densification of urban properties with select residential and commercial developments. CityCon controls the key urban land sites where its properties are located, and we believe that our expansion projects of developing and owning high quality mixed use properties will both further enhance our properties and create live, work, play nodes in key urban locations where there are strong demographics and connections to public transit. To conclude, I'd like to reinforce our commitment to the priorities which we have discussed earlier this year. In the current retail environment, we must intensify our focus on maximizing the value of our assets.
During the first half of the year, we implemented the new organization. And with this clearer organization, we're better able to focus on all parts of the business as well as find synergies from our Pan Nordic reach. With our strengthened team, we start looking at how we can best take advantage of the numerous densification opportunities that we have in our portfolio across the countries. Strengthening the balance sheet remains a priority for us. During the second quarter, we disposed two shopping centers in Finland to repay debt.
We are in several discussions regarding other potential divestments at the moment. We will continue to recycle capital going forward as we focus our reinvesting in the densification of our best assets. I'd like to also highlight the stability of our business model where a clear majority of our leases are linked to indexation. We have a diversified tenant mix with a relatively low share of fashion tenants, which has helped us weather the headwinds the retail sector is facing. We remain focused on being good stewards of capital and to ensure that capital is used efficiently for those projects where it provides the best return.
It is clear that we have a great number of embedded growth opportunities within this existing portfolio. And with that, I'd like to hand it back over to Mikko.
Thank you. Thank you, Scott and Eero. Finally, we would like to remind you that we will host our Capital Markets Day in Stockholm in September. The day as such will consist of asset tours during the morning, followed by management presentations in the afternoon. And the aim of the day is to give all institutional investors a strategic update for Citigo's new management, and presentations will be held by the CEO, CFO COO, Henteke Gjinstrom and the new CDO, Erik Lenhammmann.
We're hoping to see as many of you as possible in Stockholm on Tuesday, September 3. And if you have any further questions, please reach out to me if you have any. With that, we have now time for your questions, and we turn to the audio line for potential questions. Operator, please go ahead.
Thank you. We have a question from the line of Nico Levy Curry from ABN AMRO. Please go ahead. Your line is now open.
Okay. Good morning, gents. Just had a quick question about the Trio development at Lasty. You mentioned, obviously, that there are some additional plans to go ahead or some ideas how you want to progress with the asset. Could you perhaps provide a bit more color on that at this stage?
Yes. This is Scott. I think what we mentioned in the comments was that, while the first portion of this deal with the city is to occupy 1,000 square meters. We are in conversations with them about expanding that offering. I don't want to be too specific because I don't want to put the city in a difficult position.
But I think that we enjoy a very good relationship with the city. And they are very aware of what we've been able to do at Issa Omana and how we've worked with the city of Espoo. We are doing other things with the project as well. We are revising our parking policy to provide free parking there. We also have an opportunity to do something with the center portion of the shopping center, and we are in negotiations on the ground floor to do something pretty significant there.
Again, I can't be very specific about it at this point, but it's very active at this point. So we actually feel pretty good about this shopping center and kind of we feel like we've turned the corner and have the opportunity to do something pretty significant here.
I understand. I've got a second question regarding the financing costs following the downgrades earlier this year. So I was just wondering if there could be perhaps some indication of what could be the potential impact if you now go into the market and issue additional commercial paper to the financing costs.
Well, the commercial paper pricing has not moved. So the commercial paper investors are not like rating specific, at least not that much. And our existing bonds do not have any reference to the rating level. I mean that we did not have any penalties or anything like that. So our existing financing is exactly on same terms as it was before the downgrade, so no moves there.
Of course, where it has an impact is on refinancing. But like mentioned, we don't have any refinancing needs before like June 2020. And right now, actually, the low interest rates are compensating for any increases in the spreads. So I would not expect the downward gradings to have a major negative impact on our cost of funds.
Okay. Thank you.
And there are currently no further questions registered. So I'll hand the call back to the speakers. Please go ahead.
As there are no further questions, I would like to thank you, everyone, for participating. And thank you for the good question, Nico. If you happen to have any questions after the audio cast, please reach out to me, Oero, and we'll be happy to help you. And with that, we all wish you a very nice summer. Thank you.