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Interim Report 1 January - 30 June 2002

Report 8/15/2002 3:53 PM

Interim Report

1 January - 30 June 2002

· Profit after financial items amounted to SEK 416m (1,034)

· Property sales of SEK 921m (2,670) generated capital gains of
SEK 176m (702), the entire amount of which is included in profit from
project development for the first half of 2002.

· Profit from project development rose to SEK 470m (355). The
project development margin for the last 12 months amounted to 12.1%

· Over the past 12 months, return on equity amounted to 19% and
earnings per share amounted to SEK 23

· Targets have been set for 2003-2005 with a requirement for
increased sales with sustained margins and return

Group summary

Demand and prices for JM's housing are being maintained at a flat but
still satisfactory level in all prioritised markets. Net sales developed
largely as anticipated while the profit trend was slightly less
favourable due to cost increases in specific projects in Stockholm. A
revaluation of these projects has been charged in full against the
second quarter. There was also some reduction in profits due to volume
effects attributable to delayed detailed development plans for housing
projects in Stockholm.
Sales of newly developed properties have been carried out with good
results but at lower volumes than in the same period last year.
Renegotiated leases in JM's portfolio were signed at higher rental
levels than in the previous rental period.
Over the past 12-month period, return on consolidated equity amounted to
19%. Over the last five calendar years, the average return on equity has
been 19%. The Group's return target over a business cycle is 15%.
Earnings per share over the last 12 months amounted to SEK 23.

"Demand and prices for JM's housing remain stable. We anticipate
continued favourable conditions for JM's project development where our
high level of ambition remains unchanged."

Carl Eric Stålberg, President and CEO


Project development

Project development of residential and commercial properties is JM's
core business. Undeveloped and developed land is acquired and
transformed through construction, conversion or extension into
attractive living and working environments.
The satisfactory trend for total project development continued with
profit growth to SEK 470m (355). The margin in these operations amounted
to 10.6% (9.5) for the first half of the year. This margin can fluctuate
over the quarters and the sale of the newly developed properties in
Frösunda, Stockholm, with a capital gain of SEK 170m, had a major impact
in the first half of 2002.
The portfolio of building rights corresponds to approximately 26,000
residential units, compared with 27,000 at year-end 2001. The number of
housing starts during the first half of the year was 1,250 (1,500).
Demand for JM's housing is good and the number of reservations remains
high. Slightly weaker demand has been noted for large homes in
Stockholm. Sold residential units in the form of signed contacts
totalled 1,251 (1,256) in the first half of the year. Both housing
starts and sales volumes can vary over time depending on the dates for
project starts and the size of individual projects.
The somewhat uncertain business climate has led JM to raise its
requirements for the proportion of reservations before building starts.
This has temporarily reduced the number of starts in addition to the
delayed detailed development plans in Stockholm. The number of sold and
started residential units is expected to increase in 2002, mainly in the
second half of the year.
JM has building rights for commercial project development corresponding
to approximately 220,000 sq.m. Approximately 40,000 sq.m. is under
conversion to attractive residential building rights and the sale of
approximately 100,000 sq.m. is planned.
Commercial project development continues to be conducted with
considerable caution.

Management properties

JM's portfolio of fully developed management properties is being reduced
according to plan. The remaining portfolio will be subject to a high
rate of turnover.
The operating surplus from property management amounted to SEK 155m
(243) for the period. The lower operating surplus was due to property
sales of approximately SEK 4 billion in the previous year, which were
carried out in line with the Group's strategy to sell fully developed
properties down to a remaining level of approximately SEK 2 billion in
book value. During the period, properties were sold for SEK 921m (2,670)
with a capital gain of SEK 176m (702), the entire amount of which is
included in profit from project development.
Investments in existing management properties amounted to SEK 263m
The rental market for commercial premises weakened in 2001. In the
second quarter of 2002, however, greater interest could be noted in JM's
premises which are now entirely concentrated to the Stockholm area,
primarily the inner city and Danderyd. JM's fully developed property
portfolio comprises 190,000 sq.m. (263,000).
Vacancies in JM's portfolio of fully developed management properties
correspond to 9% (2) of annual rents and 8% (2) of space. At year-end
2001, vacancies amounted to 7% of annual rents and 6% of space. The
higher vacancies are mainly explained by the sale of properties with
very low vacancies as well as longer lead times from termination to
Major property sales in the first quarter included two newly developed
office properties in Frösunda, Stockholm. These were sold to two German
property funds for a total of SEK 835m with a combined capital gain of
SEK 170m. No major property sales were made in the second quarter. After
the end of the period under review, a property was sold for SEK 84m with
a capital gain of SEK 30m.

Stockholm, 15 August 2002

Carl Eric Stålberg
President and CEO

This interim report has been reviewed by the company's auditors.

Additional information and financial calendar

For additional information, please contact
Carl Eric Stålberg, President and CEO +46 8 782 88 33
Claes Magnus Åkesson, CFO +46 8 782 89 71

17 October 2002 Interim report for the period January-September 2002
February 2003 Year-end report for 2002

JM AB is a public limited company listed on the Stockholm Stock
Exchange. JM has around 2,600 employees in Sweden, Norway, Denmark and
Belgium and sales of approximately SEK 9 billion. The company is
Sweden's leading housing developer and the core business is project
development of residential and commercial properties in central areas of
growth markets. JM's operations are characterised by a focus on quality
and the environment.

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