Welcome to the Q2 financial reporting of Aspo. We have a good, solid profit development in Q2. In addition, today, Aspo's board of directors have approved a demerger plan of Aspo, which will target a demerger into ESL Shipping and Telko on December 31st this year. Thirdly, we have launched today the midterm financial targets of both ESL Shipping and Telko. If I start with the first half of 2026, we have an EBITA of EUR 17.9 million, so a bit more than EUR 3 million of improvement against last year. Fairly stable performance considering the conditions of ESL Shipping and quite a significant profitability improvement by Telko. If you look at ESL Shipping, quite major strategic milestones which have happened. During June this year, we started to construct the first in the serial four Green Handys, so the e-methanol-powered vessels that we will get then in year 2027 and 2028.
We plan to have all 12 Green Coasters in traffic by end of this year. Also on Telko's side, clear progress when it comes to strategy. We developed a new revised strategy of Telko. We also launched, May 1st, we launched a new operating model, a new organization of Telko. If you look at our figures, strong cash flow, particularly driven by the sale of Leipurin and also quite strong earning per share. If we look at the total figure, we have EUR 0.87 per share for the first half. If we take a look at the Q2 figures, quite exceptionally strong, EUR 10.8 million, compared to EUR 7.5 million last year. ESL Shipping, fairly stable, EUR 3.8 million against EUR 5 million last year. We had quite a lot of dockings during Q2, which negatively impacted performance.
Also if you look at the contractual demand, it was fairly weak throughout the quarter. These two combined then resulted in quite low transported volumes of ESL Shipping. Telko EBITA EUR 8.2 million, the best quarter ever in Telko's history. The EBITA almost doubled compared to last year, and the EBITA percentage close to 10%. Three factors driving this. We had very strong sales growth, 14%. We had gross margin development, which was very positive, which actually shows the positive effect of the strategy that we have selected. Finally, we had a headwind or positive effect by the market due to oil prices. In volume products, we were able to sell cheaper inventory against higher market prices of the products. Safety development, we are working hard on this.
If we look at the first half of this year, we're aligned with the targets, so clearly better both in ESL Shipping and Telko. We will continue working on this, and there's still a lot to do when it comes to safety culture and processes. This area takes a lot of our attention. I said we came out today with the news of a demerger of Aspo, forming two standalone listed companies, ESL Shipping and Telko. There's a quite substantial background, which then cumulate to this day. Already a bit more than two years ago, we communicated a vision to look into a scenario where we form two companies, Aspo Infra and Aspo Compounder. We very much highlighted that the intention and the perspective is to maximize shareholder value and find a good environment for both of the businesses to develop.
We elaborated on this vision in November last year and said that either a partial demerger of Aspo or a sale of ESL Shipping. Today, the board of directors have approved the demerger plan. There's a lot of work put into this. ESL Shipping has made substantial investments over the past couple of years. A lot of the vessels are still to come, and partly this was enabled by the fact that OP Finland Infrastructure and Varma came in as minority shareholders in ESL Shipping. Telko has made a lot of acquisitions over the past few years, and due to the fact that we sold Leipurin, we have now strengthened the balance sheet of Aspo and Telko, enabling further acquisitions also going forward. Basically saying that the demerger of Aspo would not have been possible a couple of years ago.
Today, we are in good shape of executing this. Why are we doing this? There's no operative synergies between Telko and ESL Shipping. The business models are totally different. One is in shipping, the other company is in distribution. Total different business models, different balance sheets, different earning logics, et cetera. We believe that by creating two standalone companies, both companies are in a better position to execute their strategies, to grow, and also then to launch shareholder value. There's a lot of benefits. We will make the structure of the companies more simplistic. This will enable management and the boards to focus more on the businesses. We aim to develop much more clear investment profiles of both of the companies. Also, this demerger will enable us to tailor the capital structure and financing of both of the companies.
As said, the Board of Directors have approved the demerger plan, but it's still conditional upon approval of an extraordinary general meeting, which will be held on December 7th. Already today, we know that the major shareholders support the demerger plan. The plan includes that Matti-Mikael Koskinen will continue as the CEO of ESL Shipping, and I would become the chair of board of ESL Shipping Group. The plan completion date, that's December 31st, and that basically means that the shares will be listed beginning of next year, the trading of the shares will start. I will come back to the structural changes due to this demerger. We have two companies which have very strong and unique strategies. If we look at ESL Shipping, the market of Northern Bothnian Bay is extremely interested. We anticipate growth of some 50% by year 2030.
In this market, ESL Shipping is really a leading player. It's a very difficult market due to the ice conditions which are present in a significant part of the year. ESL Shipping has an interesting infrastructure-like profile due to the fact that approximately 80% of the revenues are contract based. Due to the investments made by ESL Shipping, we anticipate very strong profit growth going forward. Also, the business logic of ESL is very interesting and strong. We have stable cash flow, we have very good debt capacity, and these two things taken together enables a very good return on equity. If we look at Telko Group, we have a leading regional chemicals distributor here in Europe, particularly in the northern part of Europe.
There's substantial organic growth opportunity, both by copying strongholds of Telko to the neighboring market, but also due to the outsourcing trend of the suppliers that produce the chemicals. The market is very fragmented, basically the top 50 players in the world, they have less than 40% market share, and there are hundreds and hundreds of players enabling Telko to take part in this consolidation trend. Telko is very much focused on specialty chemicals and value-added services. These will bring more stable development and also better margins. There's programs in place to improve the profitability of Telko. We have the new organizational model. There's clear scalability advantages, and we also have a full profit potential program going on.
Telko aims to be a forerunner in sustainability in the industry, although Telko's business model is quite different from ESL Shipping's, also here we have an interesting characteristics. A very light balance sheet combined with good margins, that gives opportunity for good returns. I mentioned the medium-term financial targets of both companies, ESL Shipping, EUR 40 million in 2030. What is intact is that we still anticipate approximately EUR 30+ million of EBITDA improvement by year 2030, return on equity 20%, and the target to have an equity ratio above 35%. We anticipate the new company to distribute approximately 50% of net profit as dividends going forward. Considering, though, that the investments of ESL Shipping in the coming years will impact both the equity ratio and possible also the dividend payments.
Telko Group, strong growth ambition, EUR 500 million by year 2030, an EBITA margin above 8%, the same return on equity target, 20%, leverage to be kept below 2.5. Annual dividends, which we anticipate to be distributed approximately 30% of net profit. To the timetable of the demerger. Today, approved by the Aspo board. In November, we will launch a listing prospectus. We will arrange a Capital Markets Day covering both ESL Shipping and Telko on November 24th, the extraordinary general meeting on December 7th to approve the demerger plan or the demerger. The demerger to be completed by year-end and the trading of the shares to be started then in the beginning of January.
Although we are executing this process as such, there's still the opportunity for a scenario where we would sell ESL Shipping in case the Aspo board would decide and assess that this scenario would maximize shareholder value creation. If we then look a bit more in detail on what this demerger entails, basically the shares and assets and liabilities of ESL Shipping Ltd will be transferred to a new company, ESL Shipping Group, which will be listed on the stock exchange. That means that if you now hold one share in Aspo, in the future you will hold one share in ESL Shipping Group. The minority owners, OP Finland Infrastructure and Varma, their ownership will be transferred from ESL Shipping to ESL Shipping Group, keeping exactly the same ownership percentage. At the same time, Aspo's name will be renamed to Telko Group.
Here you see the end game. If you have one Aspo share today, in the future you will then have one share in Telko Group and one share in ESL Shipping Group. That will be the end game starting on 31st of December this year. If we then illustratively look at our ownership structure based on the current ownerships dated in June 30th, considering then the demerger, the biggest owners in ESL Shipping, beginning of next year, if we assume that there are no changes in the structure, the largest owner would be OP Finland Infrastructure together with Varma, and then the ownership held by the Nyberg family and the Vehmas family, followed by Ilmarinen. The ownership structure will to some extent change in ESL Shipping compared to the current ownership structure in Aspo.
I would hand over to Erkka to go through the figures in more detail.
Thank you, Rolf. Here are some key figures of how the new ESL Shipping Group and Telko Group would look like based on the last 12 months' performance. These numbers are based on Aspo's segment reporting, where ESL Shipping figures are based on the current ESL segment numbers, whereas Telko is a combination of current Telko segment and then the Aspo level costs in our other operations. The comparable EBITA of ESL Shipping for the last 12 months have been EUR 14.4 million, and in Telko Group, EUR 18.1 million. The invested capital in ESL, EUR 250 million, whereas in Telko, about EUR 140 million. When we are looking at the rolling 12 months development on a comparable EBITA of the Aspo, ESL Shipping has been fairly stable over the last, say, three years.
On average, the quarterly EBITA has been about EUR 4 million, some volatility around it, but the market has remained challenging for us and the profitability has been fairly steady with some quarterly volatility. Telko has been increasing the profitability quite substantially at the same time, and now with the significant jump with the profitability with the latest quarterly result. When we look at ESL Shipping more in detail, the net sales increased on the coaster and handy operations by about 20%. That was driven by the high fuel costs, which we are passing through to our customers, and that was driving our net sales up. However, the fuel prices was neutral impact to our profitability on the second quarter. From the demand part, the steel industry has faced a fairly good demand overall. The demand was negatively impacted by some our customers' maintenance breaks during the second quarter.
The forest industry demand has remained low as in the past. On a positive note, we had a significant increase in the project cargo shipments, especially in the coasters business. The profitability of the second quarter was negatively impacted by the large amount of maintenance or dockings there on our fleet. Some of the dockings will continue for the third quarter as well. The impact from the dockings are coming partly from, of course, our capacity being out of the service, but also when taking the vessels to the dockings, you either encounter typically some increased exposure to spot market and/or then higher ballast, meaning that you travel empty with the ship. It's not only the time that you lost there on the harbor. We are continuing the profit improvement program in ESL. There has been a really good progress.
That is not visible in the numbers with the negative impacts that I just explained. The profit improvement plan is solid and is moving forward. On the Telko, we saw a record profitability in Telko, EUR 8.2 million, with the 14% increase in net sales primarily coming from higher sales prices, but also market demand overall improved moderately compared to the previous year. The profit improvement, a large part of it came from the volume products, where we were able to sell the older inventory with the higher prices out. The impact estimated to be around EUR 2 million-EUR 2.5 million. Also very important part of the profit improvement coming from better sales margins. We have been able to, across the whole our product portfolio, increase the sales margins on a wide range, so that has also contributed quite significantly to our profit improvement.
The higher volumes contributed to some extent to the profit increase. Like communicated earlier, we also working on the Aspo- level costs to decrease the cost level on the common costs, and that has contributed so that the cost level already is clearly going down compared to the previous quarters. Net debt increased compared to the previous quarter. During the quarter, we paid a dividend close to EUR 8 million. We had investments of about EUR 16 million, and then the working capital increased EUR 10 million, largely driven by the increased oil price as that is tying more to Telko's inventory and also to the customer receivables in ESL when the higher oil price pass-through is invoiced from the customers. The operative cash flow, the EBITDA, was very strong on the quarter. When we are looking liquidity at the moment is very strong.
During the quarter, we renewed several of our loan agreements in preparation for the demerger. All of our lenders have given their consent for the demerger. Also the maturities have been extended so that there are no maturing loans on the next coming years. When looking at the loans currently that are held by Aspo Plc, those will remain as loans of Telko Group then after demerger. All the loans that currently are held by ESL Shipping or its subsidiaries will become loans of ESL Shipping Group. Those arrangements are already done so that the loans are dedicated for the future. For the ESL Shipping, the loans are with long maturities with only amortizations on the next coming years, and then the loans maturing then on the 2030s.
The net debt of ESL Shipping is EUR 151 million, out of which EUR 65 million is tied into investments that are not yet operational. The investment program that we have underway. That big part of the ESL Shipping's balance sheet and net debt is something that is not yet contributing earnings for us. ESL Shipping has about EUR 100 million of committed undrawn loan arrangements in place for the Green Handy investment. In all, the ESL Shipping has secured financing for all the decided investments through committed financing arrangements and credit commitments. Telko Group has a low net debt with EUR 34 million net debt, with the net debt-to-EBITDA ratio of 1.5 with EUR 75 million of loans in place for Telko Group, leaving a large EUR 41 million available cash position for executing the acquisition strategy of Telko. Handing back to Rolf.
Thank you, Erkka. The guidance for this year is kept unchanged. We expect the EBITA to increase from previous year, which was EUR 29.4 million. If you look at the current 12 months rolling figures combining the first half of 2026 and the second half of 2025, we are at EUR 32.5 million. Well-aligned with the guidance for this year. Assumptions behind the guidance, we expect economic growth to slowly revive. There's still significant uncertainty when it comes to geopolitical tensions, wars, et cetera, which makes forecasting a bit difficult at this moment. However, the profit improvement is largely based on our own activities in ESL Shipping and in Telko. Mentioned the fleet renewal, also better fleet utilization, the synergies and the new operating model in Telko, this combined with a reduction of Aspo- level costs.
In both of the businesses, we expect a slow revival of the market demand to slightly improve during the second half in 2026 of ESL Shipping, also spot market pricing will gradually improve. There are still some dockings to come for the Q3, which will negatively affect the profitability of ESL Shipping. The same for Telko. Volume demand, either stable or slightly increasing. Prices, we expect to be either in decline or stable, very much depending on the oil price development, what eventually will happen with the price level. We expect Telko to continue growing via acquisitions still during 2026. To highlight extremely strong profitability Q2 this year. Aspo board has approved a plan to de-merge Aspo by year-end, we have launched new medium-term targets for both of the companies.
I would like to ask Erkka to come back to the stage, we will continue with questions. One thing before that, I want to thank you, Erkka, for all the contributions here at Aspo for the past couple of years. Great work, I wish you all the best going forward.
Thank you.
Thank you. Questions, please.
Thank you. This is Pasi from Nordea. I have a couple of questions. Maybe I take those one by one. Firstly, did you have any interest for the ESL Shipping segment, or was it only related to pricing evaluation you decided to list the company as a separate entity?
We still have the door open also for a sale of ESL Shipping. That would then be executed only in the case that that would maximize the value of the company compared to our assessment of the value in a demerger situation. No comments on discussions with possible buyer candidates.
Secondly, regarding the Telko segment. The margins were practically pretty okay sales margins. When looking at the sector, there has been some availability problems. Are these margins sustainable going forward after these one-off effects are fading away in the sector?
If we look at the sales margin development, that has been extremely strong already for, let's say, approximately two years, and I see that trend to continue. If we look at the EBITA percentage of Q2, which was 9.8%, that is clearly positively impacted by the market conditions.
Maybe a comment on the availability that we haven't faced any, I would say, substantial issues with availability. Availability has been okay throughout the year.
I see. Maybe thirdly, regarding the Telko segment and your target profitability in the segment. Is this target for a segment without the Group overhead costs, or are you going to add on the costs coming from the Aspo Group to the Telko segment when it's going to be listed as a separate entity?
There will be approximately EUR 4 million of Aspo Group costs, which will be transferred to the Telko segment, and those are taken into account when stating the 8% EBITA target. Of course, we have a substantial program going on to improve the profitability of Telko as such as a standalone company.
The 8% includes EUR 4 million negative effect, million euros on an annual basis?
Yes.
Certainly, the EUR 4 million is also something that will be looked at.
Yeah, thanks. Maybe lastly, regarding the long-term contracts on the ESL Shipping segment. You said that roughly 80% from the volumes are coming from the long-term contracts. When looking at the second quarter and first quarter, you are still quite cyclical in terms of end demand. What are you gaining from these contracts if you are still cyclical in terms of demand? Contracts don't actually offer any kind of visibility for the shipment volumes, or where the gain for you is coming from these customer agreements.
Actually, if we look at our main customers, the volumes are fairly stable on an annual level. If we compare the spot market with the contractual market, the spot market is a lot more volatile than the contract market. In case the demand and market cycles are extremely strong, then the spot market would overperform the contractual market. Our structure, 80/20, that means that in the long run, we will make a lot more stable profitability.
Yeah, looking like the first half of this year. Is the weakness coming from the 20% of your business? Are the yields practically quite stable in the 80% for the remaining part of the volumes? I guess you are actually almost loss-making in the spot market then.
I would say that during the first half of 2026, the contractual demand has been low, also the spot market pricing has been very low. The logic is that when the contractual market is in decline, then typical there will be more vessels available in the spot market, which will ruin the price level. There's a bit of a leverage, a more stronger effect than on the spot market compared to the contractual market.
Maybe to elaborate on what we shared last year on the third quarter was the snapshot on the profitability between the different vessel ages. That also makes a big difference there. The new vessels with the high efficiency, they are performing even this market extremely well, whereas the old vessels, they are struggling. We do have the investment program ongoing, which is renewing our fleet, delivering very significant improvement of profitability compared what we are today. Even in the challenging market, we are able to perform very well when we have the right fleet.
Excellent. Thanks. That was all from my side.
Yes, good afternoon. Sauli Vilén from Inderes. About the dockings on the second half, which you mentioned, can you give us any ballpark, like what kind of a negative effect are you expecting?
If we look at Q2, I would say we talk about EUR 100,000. If we look at the Q3, the effect will be less than in Q2.
Okay. Continuing on what Pasi already asked about the group costs. Yes, the EUR 4 million will go now to the Telko, but what about the ESL Shipping? What kind of OpEx uplift are you expecting there, since of course you need to build some kind of capabilities there to them to be a standalone listed company?
We have actually been working on this over the past year already. We have decentralized a lot of the functions. Some of the Aspo people will move to ESL Shipping as well and strengthen different critical functions within the company. When it comes to ESL Shipping, as with Telko, of course, the full profit potential program looks at the whole thing. Tries to optimize the entire cost structure.
Do you still expect ESL Shipping OpEx to grow when it becomes a standalone company, since you need to build some functions there?
It's a bit of a both and. At the same time, we will streamline cost structures, and then we need to add some costs. For example, ESL Shipping will have a dedicated board, which will add some costs.
The operations and the functions have been fairly independent for ESL Shipping already now. From that point of view, there is very little impact from the demerge.
Okay, that's clear. Thanks.
I'm Matti Kaurola, OP Markets. If we start with Telko's profitability, we've been talking about that there was some impact from the market, and it was, I think, improved EUR 4 million from a year ago. You said it's EUR 2.5 million windfall from the market, so still like EUR 1.5 million i mprovement. Is that coming from the sales mix? Is there some inventory impact also that your clients have been filling the inventories and anticipating for supply issues? How much is that there, and how much is the clean improvement if we deduct all these windfalls from the EBITA?
Start with the windfall, so that's particular for volume products, which are a lot more sensitive when it comes to market pricing. The two other elements is sales growth and then improved gross margin percentages. The sales growth, if you look at the entire first half of 2026, it's 6% sales growth, and that comes entirely from organic growth, so not price improvement. The prices for the six-month period has been very flat compared to last year. Some of that 6% is due to the fact that customers have increased their stock, but very difficult to say what share. If you look at the gross margin optimization, I think there's two elements.
One is the strategic element, which is in what products, in what market segments we are in, and we are gradually transferring more and more of the business into these segments, giving us better gross margin. It's also an operational aspect, and that is us being better at, on a day-to-day basis, optimize buying and selling and optimizing the gross margin percentage.
Like mentioned earlier, the sales margin has been trending across our whole product portfolio up on the past quarters. That trend has continued on the second quarter. That has been very positive development in Telko.
Good, thank you. Maybe continuing about this topic. We've got these extraordinary items. Just to recall that I get it right here, it was roughly EUR 0.1 million, the impact from the dockings that was extraordinary this quarter, or if we go to ESL Shipping.
No, I said hundreds of thousands of euros.
Okay.
Just to give a ballpark figure—
Yeah
For that during Q2. For Q3, it's less than that.
Is that something that is going to happen coming quarters as well, or is it just this Q1 which is heavy on the dockings?
It's the Q2 which is very heavy on dockings, then Q3 a bit less heavy. If we look at the whole year, it's very difficult to measure because you can't look at docking days because they are not equal of size, but just give some type of ballpark understanding. If we typically would have maintenance cost of ESL Shipping in the ballpark EUR 4 million, I would say this year they will be a bit more than double than that.
Okay. Thank you. One more question regarding these extraordinary topics. If we think about this energy market situation, which is very volatile right now. Just to be clear, is it the crude oil price or refined oil product prices that are driving the price of the chemicals? I think it's part of the refining process, which are the byproducts then which will be refined to your chemicals. I think although the Hormuz is, of course, a difficult question, but there is lack of refining capacity right now. Is that actually something that could keep also chemical price elevated going forward?
Typically what we would follow is the Brent oil prices, with the distinction that if you look at specialty products, I think there's only a very vague correlation between these two because these products are very refined and tailored for the customer needs. When we talk about the smaller share of our business, which is volume products, both polymers and chemicals, there's quite a strong correlation with a lag, of course, in pricing. If you look at the past couple of years, there's been a lowering trend in oil prices giving us some disadvantage in profitability. Now when the oil prices are rapidly moving upwards, we will get some benefit, as estimated EUR 2 million-EUR 2.5 million for Q2.
Thank you. No further questions.
We have two more questions from the line. The first one, when do you expect the new strategy to translate into shareholder value rather than just strategic milestones?
Looking at the share price today, I guess the answer is today. We have been working for several years on this kind of portfolio vision, there's been a lot of acquisitions, tremendous investments in the companies, and also very fundamental kind of restructuring. This takes us to this day where it's possible to do a demerger of Aspo. It wouldn't have been possible still a couple of years ago. Profitability is on top of our agenda, at the end of the day, growing profitability, that is what should impact shareholder value. That is what we're focusing on.
Okay. Another one from Janne. How much of your earnings performance is still driven by the market cycle versus company specific execution? Quite a big question as well.
If we think of our guidance for this year, I'm fairly comfortable with this guidance. We are not that dependent on the market. We're more focusing on our profitability improvement actions. I think we are not building the strategy on a market which will bloom and support us. Instead, we're making sure that our strategies work also in these quite challenging market conditions.
Great. That was all from the line, if no more from the live audience, maybe to conclude, this demerger process will now take some time. Is there something that the shareholder now holding Aspo shares, what he or she should do?
It would be good to participate in the upcoming general meeting on December 7th. Beyond that, basically what will happen is that if you hold one Aspo share today, you will get one share in the renamed Telko Group, you will get one share in the ESL Shipping Group, which will be listed. That is what will in practice happen. Of course, starting the trading of the shares beginning of next year, you can also allocate your investments in either or company based on your own preferences.
Great. That was probably all for today.
Thank you very much.
Thank you.
Thank you.