Welcome to the financial reporting Q1 2023 of Aspo. If we look at the continued operations of Aspo, during the beginning of this year, we have had strong growth and profitability level, which is close to last year. If we compare this against targets, growth target, we clearly achieved 10% growth. Comparable operating profit rate, 5.9% compared to 8% target. Return on equity, very close to the 20% target, and gearing on a good level, clearly below target. I want to point out already at this stage that we changed our reporting structure in Aspo. Basically we formed a new non-core business segment with all the businesses to be exited.
Hence, when you look at the Leipurin and the Telko segments, these now show the continued business of Aspo and in that way gives a much more transparent view of the numbers. Let's start with the Aspo level and net sales development. As said, 10% growth, looking at the continuing operations. Leipurin, extremely strong growth, driven by the Kobia acquisition, driven by inflation. Telko also, very good growth both organically and via acquisitions. ESL Shipping, net sales decreased a bit, due to a bit more challenging business environment. If we then look at the comparable operating profit, EUR 8.4 million, and that you can compare with the EUR 8.7 million, year 2022 first quarter.
I think this is on a still on a very good level and particularly if you take a more kind of historical view on our operating profit generation. For example, I recall that in 2019, before the war in Ukraine, before the COVID, our operating profit was EUR 4.9 million. If you look at EUR 8.4 million and how we arrived at that, very positive development of Leipurin, also Telko, small improvement. Nice to see that the divestment of Vulganus, the divestment of Kauko, and also cost efficiency improvement measures on a Aspo group level contributed a bit more than EUR 1 million of EBIT improvement. ESL Shipping still doing well in a bit more challenging market.
If you look at the total figures, then also including the discontinued businesses, we have a bit of a different picture. Naturally, sales in decline, and that also goes for the operating profit. That's of course, a natural consequence of the fact that the Russian business now is doing a loss compared to very strong profitability earlier on, and then also due to kind of wind down exit process of the businesses in East. If you look at items affecting comparability, we had basically two things, two items during Q1 2023, both positive. Due to the sales of the Gothenburg property in Q1, we reported approximately EUR 200,000 of sales gain.
In addition, we made some value adjustments, considering the pricing of the Russian businesses of plus approximately EUR 300,000. These two items can then be compared with the situation last year, where we had -EUR 4.9 million of items affecting comparability, and these all related basically to Ukraine, the inventories being destroyed and then the write-downs concerning customer receivables. I will not go into the details of this table, but here you see the overview of all the figures. Of course, we are mostly focusing on the comparable operating profit of the continued operations. As you see, very close to last year's level.
If you look at group total, and particularly when you include the items affecting comparability, if you look at group total, we are fairly close to last year's level of EUR 10.1 million. If you look at the continued operations, we are a lot stronger this year than last year due to the major write-downs in 2022. Cash flow remains strong. Operating cash flow of EUR 12.2 million. No major impact in working capital. Basically, we had investments in Green Coasters, then we acquired Eltrex, EUR 3.7 million, and then we got the cash inflow from the Gothenburg property of EUR 2.4 million, and then we arrive at the free cash flow of EUR 9.1. Bit lagging compared to last year's figures.
Maybe worth mentioning that all businesses contributed well to the cash flow development. Return on equity, very close to the target level of 20%, 19.7%. This is arrived by the good, fairly good profitability of the continuing operations. If you compare it with last year when we were on approximately on the same level, 21.2%, we had then strong profitability in Russia, but again, we had these negative items affecting comparability. At the end of the day, you arrive at approximately the same figure. I'm very glad to be able to say that we have a very limited Russian risk now left in Aspo.
We were able to complete the transaction of Telko Russia, which was sold to GK Himik. We received EUR 5.7 million in cash back to Finland, and that did not generate any sales gain or any sales losses. With the exception of the translation differences, which amounted to minus EUR 8.6 million. If you recall, the total translation differences, including Leipurin Russia currently with the current exchange rate, we're at approximately EUR 30 million. If we look at Leipurin, we're in the process of exiting Russia. We've applied for the transaction in the governmental commission and are awaiting for further feedback.
The good news is, though, that if you look at the current numbers we have in Russia, we did a loss of EUR 400,000 during Q1, but at the end of the day, it's basically Telko who has an operating loss and Leipurin is doing a small profit positive result in Russia. Hence, I would say that the majority of both the kind of balance sheet as well as the profit and loss risk of Aspo's Eastern business is mitigated. I'm also glad to say that in sustainability, we're taking the right steps. We are very much focused on the, let's say, the work behind the numbers, ensuring quality, finding the right measures.
Even with these numbers, carbon intensity, we're taking the... a trend towards the better. It's of course a very mixed picture what is driving that, but ESL's operational excellence is good. In addition, the growth of Leipurin, the growth of Telko helps out. But of course there are also external circumstances, for example, weather conditions who will impact this measure. Safety, eight point eight, the injury frequency a bit worse than last year. At the same time, we're making sure that we're improving quality of this measure all the time. We basically had three incidences during Q1, two in ESL and one in Telko. Let's go to the businesses of Aspo, and I will also comment separately on the discontinued operations.
Starting with the ESL, if we look at the net sales development, -7%, we should really look at the different business lines within ESL. Handysize vessels doing very well. The coaster vessels, as I said before, we're suffering currently from lack of capacity and time chartered vessels that are too highly priced. The good news is that we have the Green Coaster investment ongoing, and that will then compensate for this. Also, the strike that we had impacted particularly the coaster segment during Q1. The same for Supramax vessels. You follow the Baltic Dry Index, and this is the segment we're more dependent on the market development since the Supramax vessels are more on the spot market.
Since demand was lower, it impacted negatively the Supramax vessels. If you look going forward, I see a temporary softening in the market looking at the next couple of months and the total year. Demand of our customer industries will be a bit lower this year than the previous year, impacting ESL's net sales negatively. A couple of weeks ago, we came out with some major news. We've been working a lot on ESL's strategy and kind of alternative measures to be taken. It's really interesting to see how much the Nordic industry is currently investing in environmentally friendly production, adding production volumes, and that will mean that ESL's market will experience significant growth over the next couple of years.
Due to this, we are investigating in different measures how to finance this growth of ESL. It basically means investing in low carbon vessels, fossil free vessels. We are currently investigating into three different measures. One is to sell the two Supramax vessels to finance this growth. We're also looking into selling a minority stake in ESL Shipping. Then thirdly, to build on the experience we have of investment pool that we had for the Green Coasters. All of these three will be assessed in order to kind of meet the significant demand of kind of ESG-driven growth that ESL is experiencing over the next couple of years. I already commented regarding the Baltic Dry Index.
We have basically been on a lowering trend since summer last year, but good to see that since approximately mid-February, we have had an increase of some 1,000 points, which will affect positively demand particularly in the Supramax for the Supramax vessels. A profitability of ESL, EUR 6 million, which can be compared to EUR 7.9 million last year. Basically, the drivers are the same as for the net sales development, coaster, in the coaster segment, challenge of lack of capacity, highly priced time-chartered vessels, and then a declining demand for the Supramax vessels. Looking forward, as when it comes for the net sales, we see a temporary softening in customer demand, which also will impact then ESL Shipping's profitability negatively this year compared with last year.
Over to Telko, growth and modest profit improvement. We had growth of 7%, and if you split that into organic growth and acquisitions, the organic growth was approximately two point five percentage points, the rest being acquisitions related. If you would disregard Ukraine, then it shows organic growth of some 4%, which is aligned with our kind of market expectations. A bit of a different picture depending on the business line. Plastics, softer development, particularly in the volume plastics, demand going down. The price levels have gone down substantially over the past 12 months. Chemicals, we were supported by the Eltrex acquisition. Demand actually quite healthy, and then price development a bit dependent on the product line. Lubricants, extremely strong performance, both demand-wise and price development-wise.
If we look going forward, we see kind of more of the same, no major changes, so still a bit of a lowering pricing trend, both in chemicals and plastics, but still kind of controlled. We also see positive effects of the acquisitions we've done. Lubricants kind of continued positive development. Profitability, operating profit of EUR 2.7 million compared to EUR 2.6 million last year. All the business lines doing very well, with the exception of plastics, particularly in volume products, a bit of a dip. It might be important to understand that the acquisitions, Johan Stengs, Eltrex, they actually did not contribute to the operating profits still during Q1 due to M&A costs, IFRS adjustments, et cetera, so that is still to come over the next quarters.
Also going forward, acquisitions should further acquisitions should support our profitability. Leipurin, very strong performance, growth of 62% driven by the Kobia acquisition. Also driven by strong inflation. Finland, Baltics, growth of some 15%-20%. Ukraine, unfortunately in decline, and Sweden then added to the growth. I'm happy to see that the food industry is currently kind of becoming a second leg of Leipurin, so very good performance organically. Going forward, Leipurin, we see a stable market, so basically meaning that the development is in our own hands. We see strong benefits of building this type of synergetic group.
We see a lot of attention among our suppliers, customers when we're able to serve them in a more wide international sphere. Profitability of Leipurin, very positive. EUR 1 million of operating profit compared to close to zero last year. A couple of drivers, divestment of Vulganus, good synergies when it comes to the Kobia integration, we're doing measures to improve performance, strengthening commercial activities, improving supply chain, also looking at the OPEX costs. I think we will also going forward, we're in good position to continue kind of on a positive profitability development track. There's a lot still to do to make Leipurin even more profitable. Finally, the discontinued businesses. Here you see basically the Russian businesses, the Leipurin East, also Belarus.
In the 2022 figures, you also see Kauko. Kauko improved basically Aspo's operating profit with some close to EUR 300,000 since it was divested, but all the other figures are in decline. As you can see, we made a major profit Q1 2022, EUR 6.5 million, and that is then declining to a loss. The good news is, of course, that then in H2 we will compare to a lot smaller numbers then going forward. Back to Aspo and our balance sheet, all balance sheet figures that we particularly look at develop in a good direction. Equity ratio close to 35%, gearing 106%. Then if we look at liquidity and our debt structure, net debt approximately on the same level as previously.
Of course, interesting rates going severely up, 3.7% as an average. Liquidity remains good, the maturity profile of our debt is also, let's say long-term. Finally, a summary. ESL, as said, in a very strong position to benefit from the ESG-driven growth. Telko very much focused on compensating what we lost via organic growth and acquisition. Leipurin, tremendous potential still in improving the profit levels. Overall, Aspo's guidance is unchanged, we still see that the comparable operating profit of Aspo group will be higher than EUR 35 million in 2023. This was a brief summary, then I propose we move on to the questions and start with the floor here present.
Thanks. My name is Pasi Väisänen, Nordea. Starting with then your guidance and especially the shipping operation. You are kind of highlighting that the, the development in the remaining part of this year might be more or less negative. Could you please kind of give us some hints or elaborate in terms of euros or profitability, what would be the effect coming from the, from the weak market or then from the, from the weaker, kind of, tons in the, in the shipping segment? Secondly, I guess you already kind of have funded your Green Coaster orders. What's the project you actually are needing more money by divesting a part of the segment or then trying to kind of, kind of sell the Supramax vessels?
What's the roughly the ballpark for the money you are now trying to raise? Are you going to make a new order for ships in the future? Maybe thirdly, when looking at the kind of your first order regarding the Green Coasters, I guess you have an ordinary battery there, which is used when docking, but the battery is actually then filled with the fossil fuel during the journey. That's not precisely a Green Coaster in that sense. Would it be possible that you need to order better ships to serve your customers rather than this first order, and you now find it out and need the money to kind of for next order.
Would it be possible that the next ship order is actually a better ships in terms of CO2 emission and used engines and fuel than you currently are receiving at the moment? Thanks.
Good question. Let's start with the guidance, so that is on Aspo level which we're guiding. If we look at ESL, we see smaller volumes than last year. It's driven by the fact that demand of the customer industries are a bit more soft compared to last year. Particularly for Q2, we see a drop in volumes because some customers are reallocating their transportation routes to get raw materials, and that will lower the volumes for a couple of weeks, some months, and that we see. Basically, the overall picture for this year is just kind of lower volumes compared with last year, and that is aligned with the Aspo guidance. If we come to the...
If I comment on the investments and investment plans going forward and the Green Coasters in particular, the Green Coaster investment project is moving according to plan. We have currently five vessels that we are producing. The electric hybrid vessels were exactly the right technology to pick for the coaster segment, so the technology choice is very much dependent on size of vessels on and on how you're aiming to use the vessels. You're perfectly right that the electric part is it's only part of the story how to improve kind of the environmental friendliness of the vessels. In addition, what is also extremely important is the vessel design and how energy efficient the motor is.
When you combine all of these, you end up in a situation where basically these are the most energy efficient vessels in this category, and basically reducing the emissions by approximately half. If you look forward to the sales of the Supramax vessels, minority investment, and the pool, we are looking at meeting the demand of the industry here up in the north. I would say we're mostly talking about Handysize vessels in particularly right now. The technology will most likely be very different from the coaster segment just because of the fact that we're talking about the different vessels size and different means of use.
Most likely methanol or ammonia, so they will really be fossil-free, so a major still improvement compared to older vessels. If you kind of size the investment, we invested a total of EUR 150 million in the 12 Green Coaster vessels which Aspo basically half of that was from Aspo's balance sheet. Going forward, the investment will be clearly above this magnitude. If you look at the industrial demand for these type of vessels, it will be tremendous, so then it's a question of how much we are as ESL and Aspo able to kind of meet that demand. Did I miss any of your three questions?
I mean, answers were very great. Just to sum it up, you are going to order Handysize vessels which are going to cost over EUR 150 million in the coming years.
That, that's true. More than EUR 150 million, and then it's a question how we will finance it, but that is the plan to step up, and this is the next wave of investments. Timetable still a question mark.
Great. Thanks. I hear you.
I'm Joonas Ilvonen from Evli. Just to get back to the investment size you talk about. You say it's above EUR 150 million, can I also assume that in terms of capacity, it's also, like, larger than these 12 Green Coasters? If you have, like, 12 Green Coasters, each 5,000 DWT, that's like 60,000 DWT, it's also like in terms of capacity larger than that.
It's clearly a different vessel type, larger vessels, but I think you're right stating that it's more capacity. Particularly if you look at kind of longer term, the demand we are trying to meet, it's larger capacity than the 12 Green Coasters.
Right. Getting back to ESL outlook for the year, how does it look? How does the contract pricing outlook at the moment for Handysize vessels? Is it still like rather stable pricing, Supramax is down from last year, but perhaps stabilizing?
Let's remember that in the Handysize segment, we have basically long-term contracts. The majority of these have cost indexes which are increased from year to year, and then also the fuel prices, kind of translated into the customer's pricing. There I see very stable development. When we look at the Supramax vessels, we are during Q1, we are suffering from the decline in the Baltic Dry Index. Now, luckily, the index has picked up since beginning of February. When we sell the Supramax capacity next time, we might benefit from the increase in the Baltic Dry Index.
Thanks. Oops. Oops. Yep. Yeah, Kasper Mellas from Inderes. Hey, a couple of housekeeping questions. About the Supramax sale timetable, I mean, I guess the process should be fairly straightforward to. The second question about the Kobia real estates which you still have left. I mean, well, we know that Swedish real estate market is in kind of bad shape. I mean, can you give us any update on how those discussions are proceeding? Thanks.
If we start with the Supramax vessels, I think it's a fairly straightforward process, but as we explained in the stock notice, so we are looking into alternatives ways of financing the future investments. Then of course it depends on the price and the situation we have, and then we will make some decisions. When we come to the properties of Kobia in Sweden, we've signed two, so both Gothenburg and Hässleholm, and now we're working on the Tyresö properties, basically two properties close to Stockholm, and that's basically the majority of the value. Still, the target is to sell them and lease them back. You are very right that the property market also in Sweden has showed some weaknesses.
However, I would say if we compare the situation in fall last year with the situation today, it's a lot more balanced and kind of transparent, the market. We're hoping to sign and close also that transaction very soon.
Okay. Thank you.
If no further questions from the floor, any questions online?
No questions from the operator.
Thank you very much for participating both here physically and online.