Welcome to the Q2 financial reporting of Aspo. As you can see from the header, we had a bit of weaker profitability in Q2 compared to a solid Q1. I, I will, though, start with giving an overall picture of the first half of the year before I dig more into the details. If you look at the first half, we had a revenue growth of 3%. We have accumulated the operating profit of EUR 12 million. We have a solid balance sheet, good cash flow, and also the return of equity, if you exclude the one-time effects, approximately 14%. We also did good progress when it comes to strategy. The Russian exits are close to being finalized.
We did one acquisition of Telko in Poland, and we now exited. It's actually four properties in Sweden, which we then sold and leased back, and that's the history of Kobia. Before I go into the more detailed numbers, a glance on where we are in sustainability, emission intensity, we're still on target level, on the track to reach the target of this year. The target is 0.36. Currently, 12 months rolling is 0.34, and as you very well know, the key drivers, in addition to net sales development, is naturally the efficiency and operations of ESL Shipping. When it comes to safety, we're lagging a bit this year's target. We have a lot of things going on here.
For example, in ESL, we are standardizing management of the fleet in order to reach good numbers across vessels. A lot of safety walks, and we're also trying to focus more on kind of preemptive actions, kind of close calls, and analyzing these in order to avoid injuries. We also just got in, just before the summer breaks, we got the updated employee survey, and we actually received exactly the same ranking as last year, so very, very strong compared to industry benchmarks. A good platform to build on.
Digging into the numbers, and starting with the Aspo level and net sales, during Q2, we had a sales drop-off of 3%. If you look what's behind that, ESL Shipping in decline, top line, partly fuel prices, partly demand. Telko, driven by acquisitions, still growing, and the same goes for Leipurin. Strong growth due to Kobia and due to inflation. Operating profit, EUR 3.6 million for Q2. If we start with the kind of good news, Leipurin continued with the kind of improving profitability from quarter to quarter, and ESL Shipping and Telko, due to challenging market, a decline in profitability, and I will come back to the details in regards to this.
If we look at group total net sales, so far I, I've presented the figures of the continuing businesses. If you look at group total, basically you can see that the Q1 and Q2 figures for this year, is almost unchanged. It's, it's the same... approximately the same numbers. If you look back on last year figures, the drop is naturally a lot more significant due to the businesses that we lost in Russia and due to the war in Ukraine. Items affecting comparability during this year, the first six months, EUR 8.3 million, basically, close to everything of this is the translation differences due to the exit of Telko.
Some smaller items for the continuing business, adding up to minus EUR 0.6 million for the first half of this year. Cash flow, operating cash flow, EUR 18.7 million. All businesses contributing positively to the operating cash flow. Free cash flow at EUR 15 million. Here we have some CapEx investments, particularly in the Green Coaster, also the Eltrex acquisition, and actually, the Telko exit from Russia generated a cash outflow of a bit more than EUR 4 million. Basically, we sold the cash in the company at a discounted price. Then, finally, very important, the sales of the properties in Sweden generated more than EUR 10 million already this the first half of this year.
There will be some additional positive effects of this going forward, and this then drives to the EUR 50 million of free cash flow so far this year. Return on equity, 14.3% when you adjust for the one-time effects. If you include the one-time effects, we're down to 2.2%. Maybe before I dig into the details of the business-specific numbers, a bit of a strategy update where I see where we are at the moment. It's very clear that the war in Ukraine and the Russian exits are impacting Aspo very negatively. We already last year had write-downs of something like EUR 21 million due to this. During this first half, approximately EUR 8 million more of write-downs.
Basically, we're losing a business, which is top line EUR 100 million, and it's done a decent profitability, 5%-10% EBIT, on an annual basis. This is, of course, a hard hit for Aspo, but at the same time, now, when this issue is being solved, this will free up resources to pursue the growth in West, and also frees up, of course, significantly, time of management. I also see we have a very kind of exciting situation when it comes to ESL Shipping. Due to the green transition that the industrial sphere here in the Nordics is facing, our analysis show that the ESL Shipping's market will grow significantly, and we want to take part of that growth and invest in new technologies.
As you very well know, the first steps have been taken, so we've invested in, in already in 12 Green Coasters. We've also focused on the partnership long-term contracts, and I think together, combined with this ESG focus, also in combination with focusing on Handysize and Coasters, this will provide us with a much more stable market going forward. As we communicated, we are looking into different venues to finance this growth. We're looking to sell a minority share in ESL Shipping. We're looking for incremental pooling opportunities, and we are also looking into selling the 2 Supramax vessels. These measures will enable us to grow ESL, and at the same time, of course, it will free up capacity on the Aspo side to pursue the growth in the other businesses.
Here, particularly Telko, as you know, a very fragmented market, opportunities to consolidate that market, and also good kind of business model, light balance sheet, decent margins, and that gives room for good return. We are focusing on building Telko into a leading European specialty products player. Leipurin, I think tremendous opportunity still to grow the profitability, opportunities in commercial supply chain sourcing. We changed the leadership model to enhance kind of responsibility of the profit and loss, there's also good opportunity for growth in prioritized segments going forward. I would say this is the big picture if we look beyond the kind of one single quarter or this year development. This is the opportunity we have in front of us.
Going into the businesses, first, ESL, as you see, we have a clear decline in top line during Q2. Already in Q1, the net sales decreased, if we look at the markets or the type of vessels, basically the Supramax vessels were hit hard by the fact that the spot market has weakened significantly. When it comes to the Handysize market, we clearly have lower volumes than last year, partly driven by, for example, the energy segment. We're also suffering this quarter due to the fact that we have dockings of some of the profitable vessels when it comes to the Handysize segment.
Coaster volumes on fairly on the expected level, despite the constraints we have when we have time-chartered vessels. You, you need to also want to, to realize that the top line was hit hard, due to the price development of diesel and LNG during the quarter. In addition, the dockings and also seasonal maintenance breaks of our clients impacted the top line negatively. If we look forward, we see activity, or our forecast is that the activity will pick up after the slower kind of summer months, and at the same time, if we look at forest steel, we, we still see that the volumes will be lower than last year.
Still a reminder about the kind of major strategic review that is ongoing in ESL. We are aiming to get first result of this review still during this year, and as said, we're looking at the pooling opportunity, Supramax divestiture, and then also a sale of a minority stake. Maybe here reminding also that when it comes to the Green Coasters, the project is progressing very well. We have the first Green Coaster, which has already been launched into sea, Electramar, and we expect that one to be in Finland here over the next couple of months.
If we look at the Baltic Dry Index, I think you, you, you can clearly read one major trend here, and that was just after our Q1 reporting, basically, the index developed further into a negative direction, and this particularly has impact on our Supramax vessels. ESL profitability, EUR 3.3 million this quarter, 7.5% of operating profit margin. Here, the drivers, market softness, particularly in the spot market, which actually generated losses when it comes to the Supramax vessels. If that kind of covers the demand side, then on the capacity side, we have the dockings, which impacted profitability negatively, and also, as said before, the high prices of the time-chartered coaster capacity.
If we look going forward, there will still be some dockings of the same vessels or similar vessels going into Q3. We see still a weaker Q3, and then we're expecting much better figures during Q4 this year. Then over to Telko, starting with the top-line development, we still experience growth in the Q2, 2%, 5% when it comes to the first half of the year. Plastics, a very challenging market, prices dropping significantly beyond the expectations that we had when we reported Q1. You see in some product lines, even 40% price drops, and these altogether weakening top line when it comes to plastics. Chemicals, strong growth, primarily driven by the Eltrex acquisition.
Lubricants still actually a very favor-favorable market in all the business segments, so doing good. If we look forward, in the plastic side, we see that market conditions will remain challenging, but we see that price trend is flattening out. In chemicals, lubricants, demand fairly stable, but some pressure on the prices going forward. On the profitability side, Telko at EUR 0.9 million for the second quarter, this profitability drop driven, I would say, primarily by the fact that when prices drop so much, so fast when it comes to product segments, easily you end up selling expensive inventory for a cheaper price. That's the key driver.
If you look at demand on the construction side, very weak demand, then we also experience some additional competition from Asia due to the very low-cost logistics we have from that area. If we then look at the situation going forward, we've taken a lot of actions to save costs, invest in scalability, and then also, due to the fact that we see the market to flatten out, that will give us much better opportunity to make profitable business. Of course, the acquisitions which are up to come, they will also support our numbers going forward. Telko, in Q2, we exited Russia, so that then frees up time of management to the Western business.
As said, cash outflow, EUR 4.4 million, EBIT impact during the Q2 was a bit more than EUR 7 million of minus. The bulk of this is basically translation differences, which will not impact the equity of the group. Over to Leipurin. Glad to say that the transformation of Leipurin has continued to be successful. Of course, tremendous growth driven by two factors: the acquisition of Kobia and secondly, inflation. We still see the negative volume trends in kilos that still comes down, but we have been able to grow top line in Finland over the past quarter, so 8% growth.
If we then look at the market going forward, we see that both the volume decline will flatten out, and we also see the inflation of our product categories to flatten out, so a more stable market is to be expected. Again, we see good opportunities for growth in Leipurin, and we're of course, picking the segments which are in particular interest for us: food, frozen products, et cetera. Profitability, now we reached, excluding then Russia, an EBIT margin above 3%, EUR 1.1 million of operating profit. I would say that the bulk of this is related to the new leadership model and the synergies that we are able to realize between the different countries.
We haven't had a lot of negative impact of the volume drops because they have primarily taken place in, in categories which are not that, from a margin perspective, important for us. Of course, if we expect raw material prices to drop, then inventory management will be critical going forward. Again, if price starts to drop, we see good opportunities also on the volume side when consumer purchasing power increases. Kobia properties, we acquired Kobia last year, summer. Now we divested and leased back all the properties of Kobia. Sales gains of EUR 13.6 million, which is fairly close to the purchase price of Kobia.
If, if we look at the impact on profit, there's one one-time impact compared to the balance sheet value, which is EUR 0.5 million during the first half of this year. If we look at the impact on the running profit and loss, considering the depreciation we had for the properties, that adds some EUR 150,000 of cost per year. We're still in the process of exiting Leipurin in Russia, Belarus, and Kazakhstan. We made good progress here. Basically, the only remaining task here is to get the approval of the local commission in Russia. Everything else is sold.
As stated before, we have a sales price of approximately EUR 8 million, and then if you look at the balance sheet value of these assets, EUR 2.5 million, and looking at current currency ratios, the translation differences are EUR 4.4 million. Then discontinued operations. Here you basically see profit and loss of the businesses that have been or will be exited, the trend is flattening out to 0 as we are exiting these businesses. Maybe the good news here is that Leipurin in Russia is making profit, so the forecast going forward for this business until we do the entire exit is slightly positive. Again, this also shows the major impact of the Russian exit for Aspo.
We, we lost the business of EUR 100 million, which have here during these years, exceptional times, but they've done some profit of 5%-10% EBIT, kind of longer term. Aspo's financial position, balance sheet, no, no major changes. We have still a gearing, which is close to what we reported end of last year, 115%, and equity ratio close to 35%. Strong, good liquidity. We have a net debt of approximately EUR 162 million, interest-bearing debt of EUR 188 million. Currently, cash, EUR 26 million, out of which EUR 3.6 million are located in the businesses of Leipurin that are being sold. Then we have some revolving credit facilities, which is fully unused.
Summary, what is important for Aspo, kind of short term, longer term, it's exactly the strategy update I just gave you. Of course, pursuing ESL strategy, of being a forerunner in ESG, compounding Telko, and then improving profitability of Leipurin. We also very soon want to, of course, the ambition is to exit Leipurin, particularly Russia and other eastern markets. Beyond acquisitions, we are, of course, also focusing on cost efficiency, and there are different programs ongoing in the company currently. Financial guidelines remains at the EUR 25 million-EUR 35 million operating profit of this year.
For us to be, let's say, in the upper range of this range, that means that the market will need to pick up, and if we are at the bottom range, bottom side of this range, that means more a continuation of the current market. This was a brief summary of the Q2 results, and I'm happy to take questions, and I guess starting here from the floor. Please, Pasi.
Hi, this is Pasi. Maybe the microphone is on. Yeah. Pasi from Nordea. I have a couple of questions starting with the shipping segment. Are you now kind of postponing the Supramax divestment program due to kind of overcapacity in the market and the very weak kind of shipping yield environment? In the case you are actually able to divest these Supramax vessels, are you still going forward with the possible divestment of the minority share in the ESL Shipping segment? Are these kind of Should we expect both of these to happen or either or, or one of those? Then kind of then let's see, the last one.
Yeah, regarding the shipping market and, and, and especially your operations, could you please quantify what would be the share of steel and forest sectors from your kind of, tons or, or kind of net sales in the, in the segment, so that we could actually try to calculate what would be the kind of, the small weakness in the end demand affecting your operations going forward? Is there any kind of outlook for the, for the fourth quarter on this year? Because I would assume that this weakness is going to stay at least in the third quarter. What is the visibility for your kind of, main customers in that sense? Thanks.
Good. Let's start with the Supramax vessels. Naturally, it's, it's a question of optimizing from a timing perspective. Naturally, we're aiming to get an as good price as possible. Of course, it's, it's a market with high fluctuations. Then there's a strategic dimension with our Supramax vessels, so very high quality, ice class, different other criteria. You, you could expect a premium, depending on the buyer. It's, it's a pure optimization, so of course, we, we aim to get an as good price as possible, and we're assessing our options.
If we look at the 3 strategic alternatives we have, so the minority pooling and the Supramax vessels, they are all on the table, and we can implement either 1 or all 3 of these, depending on the situation. I, I don't see them as such that if, if we complete 1, then we definitely will exclude the 2 other ones. When it comes to steel and forest for ESL, these are clearly the 2 strategic markets, and I, I would say kind of ballpark figures, clear majority, over 50% of sales from these 2 segments. I think you're very right saying, the...
If, if we look at ESL's business going forward, Q3, we still expect to be weak, and then a strong improvement during Q4. What, what is this based on? It, it's clearly our customer forecast that, that we, we receive. So that's, that's in brief.
Yes, thanks. I hear you. I guess everyone is hoping to kind of improvement in the fourth quarter. When it comes to the kind of the full year outlook, I mean, your range of the clean EBIT is roughly EUR 10 million. When looking at the what you actually achieved in the first quarter, the range for the full year is quite wide. How come you were not able to shrink the kind of guidance range at all? Is the kind of uncertainty regarding the fourth quarter such high still?
Good, good question, and naturally, this is the topic we discuss a lot internally. We, we concluded to keep this range based on the uncertainty in the market. Of course, that is related to the demand of ESL, and then I, I would say particularly market prices of Telko. These are the two major drivers which very much impacted the Q2 results as well.
Jonas from Evli. Perhaps a question really concerning ESL and the long-term investment opportunities around the Baltic Sea. These are to happen over the years, sometime in the future, but have you already identified certain specific new customer accounts which could drive volumes? Are there maybe, like, certain ports which could drive significant new cargo volumes? Like, for instance, in Finland, there's at least Kokkola, which is already confirmed to receive, like, many billion euros worth of new investments.
You're very right. This is a kind of strategic outlook which will happen gradually over the next, let's say, 10, 10 years. It's very valid when it comes to the steel industry, producing fossil-free metals, and I think also very valid when it comes to the forest industry, investing a lot more in production capacity. There we've seen some tremendous investments already over the past couple of years. I would say the Northern Bay Area is extremely interesting from this ESG... ESG perspective, and based on our calculation, there's really kind of a significant... The market upside will kind of multifold. There are new customers as well.
There are some new investments which makes a kind of new, new entries into the market. Of course, we also had the opportunity to expand our share of the market. All, all in all, extremely interesting opportunity for us, particularly if, if you compare to the situation 2 years back when there was the question that, "Hey, to what extent will we have, in the Nordic countries, production of mass industrial products?" Now it's very clear that this will be a significant production going forward, and a growing one. That market has, in our mind, changed entirely. We see that for demand for fossil-free transportations are extremely significant considering the investments that the industry is doing.
Maybe a related follow-up question. Do you think the, kind of, the Baltic Sea port infrastructure is basically already there in place for you, that, i.e., you wouldn't need any new port investments to help these volumes? Like, for example, I think there's been only In, I think, in Luleå, Sweden, they are deepening the harbor, but at least it seems to me that the, the western coast of Finland or the, or the whole coast of Finland is pretty dense with ports. Do you think the infrastructure is basically already for you there in place, that you don't need really any more those kinds of Any new ports or any port investments, any deepenings, any stuff like that, so?
I, I, I don't see any need for new ports, but I, I see a lot of need for investments in, in the existing ports. Luleå is a very good example. Kokkola is another good example. Of course, that will facilitate the growing volumes.
Okay. maybe just one little detail related Telko. You mentioned these Asian imports, and did they only mainly affect the plastics business, or were the chemicals and lubricants businesses also affected by these Asian imports?
I, I would say primarily plastics in, in the current situation, but there are certainly some chemicals as well. This is only one driver. I, I would still come back to the fact that the two main drivers, one is the price development of, of plastics, and particularly volume plastics, to, to a lesser extent, specialty plastics. It, it's, of course, very related to the overall GDP development, and particularly construction in, in this case, which is a really soft market currently.
Okay, thanks. That's all for me.
Sauli Vilén from Inderes. about Leipurin, and in, in the report, you stated that you are considering possible for acquisitions, and also, and also possible divestments in Leipurin. Can you open that up a little bit more?
First of all, I would say that we have a very good opportunity to grow organically. And just to give you a bit of understanding of that, for example, in Sweden, we are mostly present in the artisan bakery segment, and there's good opportunities to expand into industrial bakeries and into the food industry. You know, you're aware of the fact that we divested Vulganus. We're very much looking at the business portfolio to kind of get the very focused business which is focused on such segments, which will provide us with growth. Bakery, food industry, and anything beyond that is questionable. No decisions taken there.
When it comes to possible acquisitions, we are clearly only looking for such acquisitions which would have clear kind of synergies, add-on synergies with the current businesses. No kind of new markets, which, which we are considering, which wouldn't have these type of synergies.
About your ability or also maybe an appetite to continue the current serial acquirer strategy at the moment is, I mean, well, your balance sheet leeway is fairly limited, you could say. The interest rates had continued to rise, and obviously, obviously, now your cash flow is also squeezed kind of bit due to the market environment, which is, which is foggy, you could say. I mean, are you still, like, pushing full throttle ahead with the serial acquirer strategy, or how you see this?
I, I think it's a twofold answer. If we look at entirely new businesses of Aspo, they, they are not our current primary focus. If, if we look at Telko compounding, it's, it's clearly a tops priority of us. We, we want to be part of, of this market, light balance sheet, good margins, fragmented market. We, we see an opportunity to take a really strong position in Europe when it comes to specialty products, that one we will not abandon.
Thank you.
Any, any further questions on the line?
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Thank you very much for attending this financial reporting of Aspo. Looking forward to keep on the, the good dialogue. Thanks.