Good morning, welcome to Taaleri half-year financial report, as well as our second quarter. We had a good quarter with some solid execution, the highlights for the quarter is that our continuing earnings grew by 11%, our investment income was EUR 15 million, our operating profit was EUR 17.8 million, and that corresponds to an EBIT margin of 67%. Our renewable energy had its first close for its new fund, the Taaleri SolarWind III Fund, raising EUR 286 million of commitments at this stage. At the same time, we sold the development portfolio that we have been building for 2 years. It consists of 50 projects and really gives a head start to the fund as they know what projects they will be forwarding for the fund eventually.
This transaction yielded a profit of EUR 8.3 million for Taaleri in the quarter. Within the bioindustry segment, we continued to evaluate potential investments for a Taaleri Bioindustry I Fund and continued to prepare for a potential venture capital fund coming up. The real estate business, there, the most meaningful was the transaction where we sold our Taaleri Forest Fund III. This was a great investment for the investors in the fund. They doubled their money, and the net IRR for the investors were 10%, which is a really good achievement. As a consequence of the good execution, we booked a performance fee. We had already recognized EUR 2 million at the year-end of 2022, and now we recognized the balance of EUR 1.5 million for the quarter. Garantia continued their stellar performance.
They had a combined ratio of 27.1%, and their income grew slightly to EUR 5.2 million. Finally, one of our strategic focus areas is our distribution and sales, and there we entered in or finalized negotiations with some distribution partners covering Europe, Asia, and North America, and that is, of course, important going forward, in particular, looking at the Taaleri SolarWind III Fund raising. If we look at a summary of the numbers for the quarter, as I said, the continuing earnings grew by 11.3% on a year-on-year basis to EUR 9.9 million. Our Private Asset Management business had a growth of 16.7% to EUR 5.6 million, and Garantia's continuing earnings grew by 6% to EUR 3.5 million.
As I said, we booked performance fee, fees of EUR 1.5 million during the quarter, and our net investment income yielded a profit of EUR 15 million. In looking at our income, it increased over 100% to EUR 26.3 million. It's worthwhile noting, though, that last year at this time, our insurance portfolio businesses, portfolio decreased due to higher rates and higher credit spreads, so thus, therefore, might look very high. Matter of the fact is that the income was EUR 26.3 million, and the EUR 17.8 million operating profit is a really high number when you look at the EBIT margin. The assets under management grew with 5.2% to EUR 2.6 billion, and we recorded a profit of EUR 0.49 for the quarter.
Now, if you look at our income and operating profit in a longer perspective, here we have on the left-hand side, a graph showing our last 12 months' continuing earnings and then Then the continuing earnings. If we compare our continuing earnings for the last 12 months at EUR 39.6 million, we can see that it's been fairly evenly developing from 2021, 2022, till the last 12 months. However, on the other than continuing earnings, there we record our performance fees and our investment income. They have risen during the last 12 months to EUR 37.9 million.
Then on the right-hand side, you can see that our operating profit for the last 12 months is EUR 44.8 million, and that corresponds to almost 58% operating margin, which is, of course, clearly above our long-term target. If we split down and look at our various income sources and cost items, within Taaleri, I'd say 1 quarter is not a really good measurement. As you can see here, the net investments really stand out for the second quarter this year, but nevertheless, if you look at the operating profit at EUR 17.8 million, that sort of summarizes the second quarter.
From a sort of longer-term perspective, it makes much more sense to look at our last 12 months' performance. Here you can see that it's very evenly distributed, the income sources of the various actions here. We start on the left-hand side with the continuing earnings from our Private Asset Management business. That is mainly the management fees that we get. As part of our business, we do receive performance fees as we are, if we are successful, in managing these funds. These things actually move together over time, because if you don't have good performances, you probably don't raise as big funds or any funds at all, and then you don't get any management fees. These are kind of... These two income items are very much linked to each other over time.
We have Garantia, and that's their income from their insurance operations. Also, over a longer time, quite stable. Finally, we have the net investment of our operations, and of course, in our business, we do invest both as LPs into the funds that we or in our case, we're GPs, so general partners. We invest into the funds we manage, then we also do investments on our own. Of course, the idea with this is that over time it does yield investment income. I'd say when you look at Taaleri, you have to bear in mind all these income sources over time to understand how our incomes are generated. We have the costs, finally, we have the operating profit on the right-hand side, which was 44.8% during the last 12 months of operations.
Okay, moving over to our business units, we start with the renewable energy. Of course, here, the most important thing was the first close of SolarWind III at EUR 286 million in commitments, and the fact that we sold the development portfolio, and we booked an EUR 8.3 million profit. There is an earn-out feature to the sale of the development portfolio, and it is sort of dependent on the progress of the projects, and they have to sort of progress according to the terms that we have set out when we sold the portfolio.
And I'd say, you know, that the fact that they have the portfolio, the fund has the portfolio, they have 50 development projects, they will naturally not build all of them, but that is, means that they don't have to go out into the market to buy any projects. They already know which projects they probably will eventually build for the fund. The fact that the first closing was very much in the end of the quarter means that no meaningful management fees were accrued during the second quarter. They will be accruing as we move on. The income for our renewable energy was EUR 12.9 million, the operating profit was EUR 8.1 million, and our assets under management within the renewable energy stands at EUR 1.5 billion currently.
If we go to our other private equity engagements, which is mainly real estate and bioindustry, I mentioned the exit of our Forest Fund number three, with the very good returns for our investors with a net 10% IRR over the investment period. As I said, this gave us the performance fees, and we booked EUR 1.5 million of that during the second quarter this year. Within the bioindustry, they continuously evaluate, of course, new investments for the Bioindustry I Fund. Taaleri also invested EUR 3.7 million into WasteWise. It's a company that recycles plastics to pyrolysis oil. Now, pyrolysis oil can be used instead of regular crude oil for various applications.
Our ownership is, is about 30% in the company, and this investment fits to our sustainability strategy and actually further speeds up the growth of our bioindustry business. Within the other segments, our income was EUR 3.2 million, our operating profit was EUR 900,000, and the assets under management are currently EUR 1.1 billion. We look at the, the same graph, where we look at our income and our operating profit over a longer period of time, in this case, it's the last 12 months for our Private Asset Management segment. You can see the dark blue bar in the left-hand chart, which is our continuing earnings, stands at EUR 22.2 million for the Q2 this year.
On the far left-hand side, it starts at the Q2 in 2022, and then it starts at EUR 20 million, and it evenly grows. That is, of course, our ambitions, that we try to increase the Assets Under Management, and thus, we increase our continuing earnings. On the top of that, we have our other than continuing earnings, which is performance fees and investment income. As I said earlier, they are part of this business that, that we run. It's part of our business model that we actually also recognize positive profits here over time. As an aggregate, you can see that our, our last 12 months' operating profit was EUR 27.5 million in our Private Asset Management segment, and that's on the far right-hand side on the chart on the right-hand side.
This corresponds to an operating margin over 50%. These are the funds that are managed by Taaleri today. The AUM is slightly over EUR 2.6 billion, and on the right-hand side, the bar where you see the split between the different categories, it's quite clear that the renewable energy part, which is 57% now, will increase in the coming quarters as they get more funds under management. If we move over to our strategic investments, and we start with Garantia, we can say that they had a very good quarter as the combined ratio was 27.1%. In the picture on the right-hand side, you can see the combined ratio for the first half of this year, it stands at 26%.
The insurance service result grew by 1.2% to EUR 3.5 million, and the income grew to EUR 5.2 million, out of which EUR 1.7 million came from the investment portfolio. The guarantee insurance exposure, i.e., the balance sheet, that is underlying the premiums that are written, is currently EUR 1.9 billion. That is more or less unchanged from the year-end, and our solvency ratio arose to 260% from 231%. Finally, to our other group, and here, the income and results under this group varies from quarter to quarter, according to disposals or potential investments that we do to advance any investments that we have under our other group.
We did some disposals. We did some investments here during the quarter. I'll start with one of the disposals. We sold the remains of our infrastructure fund and booked a EUR 900,000 profit from that. Turun Toriparkki, which is a parking hall in the absolute center of the city of Turku. We participated in a EUR 16 million refinancing. It was a refinancing of a bond, a rather expensive bond, and we invested EUR 2.3 million into the company. When we refinanced it, our ownership is now around 39%, and as a consequence of this refinancing, we booked a gain of EUR 3.3 million in the quarter.
Summarizing the other segment, the income was EUR 4.8 million, and our operating profit was EUR 3.7 million. If we look at the light blue box on the right-hand side, you can see the book value of our non-strategic investments. They have risen from EUR 25 million at year-end to EUR 29 million, and the value increase is partly due to value increases, like Turun Toriparkki, if we do any investments here and if we do any disposals. By concluding, I could say that we continue to execute our strategy when it comes to disposing these holdings, but we dispose them at our chosen pace, trying to maximize the value of the assets there. Okay, I'll hand over to Minna Smedsten, our CFO.
She'll guide you through our results and balance sheet.
Thank you, Peter. Yes, hello, my name is Minna Smedsten. Now let's take a look at our financial performance. Let's start with the business units. We start with looking at the business units for Q2 and then comparing them a little bit next to each other. We can see that our continuing earnings, they were EUR 9.9 million, that Peter highlighted. 60% of that continuing earnings comes from Private Asset Management. Basically 40% comes then from Garantia. We recorded the exit of the Forest Fund III, therefore also the performance fee of EUR 1.5 million. We had a very nice investment income, all in all, EUR 15 million.
From this EUR 15 million, we, we recorded EUR 8.3 million from the development debt portfolio, and in addition, also EUR 0.7 million project-related costs that were billed through the income statement. That's why you have an figure of EUR 8.9 million in renewable energy. Under group Other, we can see operating profit... very good operating profit, but also a few words about the investment operations, so that the EUR 4.1 million, that comes from basically the exit of Infra I, and then also the fair value change in Turun Toriparkki that Peter highlighted. Then a few words also about our strategic investments. Garantia's continuing earnings grew to EUR 3.5 million, and the net investment income to EUR 1.7 million.
When you remember that we implemented IFRS 17 in the beginning of the year, according to IFRS 17, most of Garantia's insurance-related expenses are netted from income, and thus Garantia records an operating profit as high as 95%. All in all, we can see a very strong and solid profitability in all business units, and that's why we have an operating profit of 67.5% for the whole group. Let's turn to the quarters, looking at the quarter development, quarterly development, and looking at where the income came from. Basically, when you look at the quarters, our continuing earnings grew now in Q2, 11%, and in H1, 17%.
Our turnover or basic income, as we presented, that grew in Q2, like double to EUR 26 million and also doubled in H1 due to the strong investment income. Basically, now I would like to highlight something about our costs in Q2. If you take a look at the first column, that's Q2 performance, and basically our personnel costs, you can see that our personnel costs grew to EUR 4 million, and we had the bonus provisions were stable, that was EUR 0.8 million, and our fixed personnel costs grew to EUR 3.2 million from EUR 2.9 million. Increase of 7% in personnel costs. A few words about our direct expenses.
You can see that our direct expenses were EUR 2.7 million in Q2, last year, the corresponding period, it was EUR 2.5 million. You see a small increase there of basically EUR 200,000. When you consider the costs, the project-related costs that were just billed through the income statement, that's EUR 700,000. When you adjust for those expenses, you can see that our direct costs actually decreased in Q2 and also in H1 compared to H1 last year. Then maybe a few words also about our key financial figures. Let's turn on the next page. Here you can see our operating profit adjusted for the investment income.
When you adjust for the investment income from investment operations, we had an operating profit of EUR 2.8 million. That is 25% for Q2, and in H1, the corresponding figure is EUR 4.9 million, and that's corresponding 23%. A few words about the H1 performance. The continuing earnings grew 17% to EUR 19.7 million. Our operating profit that was almost tenfold for H1 compared to last year, so that was EUR 19.3 million. Naturally, the strong investment income kicking in, and then we had an increase of 5.2% in assets under management. Basically looking at our balance sheet and what our balance sheet consists of. We have a solid balance sheet. We had an equity rate of 67.1%. We had an equity of EUR 200 million.
That corresponds almost basically the same as it was at the beginning of the year, even though we distributed EUR 20 million in dividends in April. Our Private Asset Management investments grew to EUR 29.7 million. That was due to the investment in WasteWise. Our non-strategic investments grew also, and that was due to the fair value change that Peter highlighted in Turun Toriparkki, and also due to the extra capitalization of EUR 2.3 million in Turun Toriparkki. A few words about the other assets. That's a pretty big chunk now that we have in, in the balance sheet, just a few words what that consists of.
We have unrealized performance fees of EUR 14.2 million, we have realized performance fees of EUR 5 million, we have asset sale receivables of EUR 90 million in that, in that asset group, as well as other fee, fee receivable and management fee receivables as well. Thank you very much, back to Peter.
Thank you, Minna. I'll summarize the second quarter. It was a strong quarter, EUR 17.6 million in operating profit. SolarWind III, the first close was done, great achievement. We sold the development portfolio, which of course gave us gains. Within the bio business, it was more business as usual, evaluating new investments, and of course, the investment into WasteWise, which was mentioned here. In real estate, the Forest Fund III exit was really the highlight for that quarter. For Garantia, it was really business as usual in that quarter. Looking ahead, I'd say we're gonna continue the fundraising in SolarWind III, hopefully on most continents, as we now have some distribution partners. Within real estate, the bio industry space and Garantia, I'd say it's more or less business as usual.
It's the same path as in the earlier quarters. We're executing the strategies that we have there. I will pause here, and I guess we might have some questions coming up.
Thank you, Peter and Minna. Now we do have some time for questions. You can ask questions on the webcast platform. Let's start with questions from the floor, if there are any.
Hi. Thanks. Joni Salo from Nordea. Thanks for the presentation. Maybe I start with the renewable, renewable energy. How much actually, revenues benefited from the first close of, of SolarWind III?
That was a very small addition, as we closed it at the end of Q2, or actually in the beginning of Q3. Basically, we are talking about EUR 100,000, about.
Okay, should we expect more coming in in Q3 than?
Yes
... from the closing?
Yes, we should.
Okay, thanks. A question about the non-strategic investments and, maybe the timeline for the, for the exits. Now, you added something for the, for the Turun Toriparkki, so I understand that you are maybe not willing to tell too much, but, what's the, what's the timeline now for the- for, for this business?
Well, let's see. You know, we stick to the, our, our outspoken strategy. We will dispose these over time, but, but as I said earlier, it's really, you know. We have to choose the moment and when the assets are right for sale, and we get the right price, so that benefits our shareholders the most. You know, they are sort of in, in disposable mode, but I can't really give you any timelines, and it depends on the market as well, so.
Okay, thanks. Last one from me at this moment. You said that you have a significant amount of investors doing the due diligence at the moment. Could you give any, any more color or flavor on this, and relating also to, to this new, strengthened, you know, distribution and agreements what you have done now?
Yeah. you're right, there are investors that are doing the due diligence right now, and then when we have the distribution agreements in place, then I guess, you know, in, in, in those particular cases, then I think it's really up to how long the DDs are for these clients. But, I won't give you any numbers as such. We still stick to our, our, our target size of the fund, and time will tell.
Okay, thanks. Maybe still follow up on related to old wind funds. Now, now with the higher interest rates, how should we view the carry potential? I think you are booking it again in Q4, like last year, the carry from, from the old wind funds. Is there any changes on this?
Yeah, these are estimates that we've done. Of course, you know, they're based on, on a net asset value, and we have a haircut, as remembered. Then if we book any performance fee, it's then based on, on those assessments. If we want to be very conservative, then we might not book any. It's not... You know, I, I can't really give you a number now or, or even an indication because the eventual sort of disposal of the funds, they will then eventually show what the what the performance fees are. You're right, interest rates impact that, then, of course, the price of energy and in particular, the forwards. That's sort of a puzzle that it, it might vary.
I'd say that we are when it comes to, to booking in advanced performance fees, we're very conservative, and an example was the Forest Fund III. We basically booked EUR 2 million. We thought that's, you know, prudent, and then we booked EUR 1.5 million. We thought that was a prudent way of, of doing this. You know, should we have booked 0, I think that would have been overly conservative because we were in negotiations already disposing that. For the wind funds, I from our perspective, it's gonna be very conservative, and whether we book something or not, it is totally dependent on what the NAV is and how big a haircut we actually wanna take to that.
As just a comment also to that, we have in the balance sheet already unrealized performance fees of EUR 40 million, so that's already in. As Peter said, that we had the discount of 30%-50%, when you are... You know, that the exits are, are close, and so, so then probably that last part will then be realized when, when the actual exit will happen.
Yeah.
Okay, thanks.
There's a question, or rather two, from the webcast platform. Previously, there has been talk about exiting the Texas wind park. What's the situation with that at the moment? Also, what's the situation with the real estate project in Toronto?
Well, when it comes to the Texas project, the idea has been to exit it, but it was a bit delayed, when it was constructed due to weather circumstances, and the idea has been to sort of gather enough data to maximize the price when it's sold. You know, it's in our, in our horizon, but I can't give you any date exactly. It is, it's still in exit mode eventually, but it was delayed due to these facts. When it comes to the Canadian project, Minna, maybe you have some additions. I mean.
Yeah. Yeah, so we have in the balance sheet basically EUR 10 million of receivables to that Canadian real estate project, and it has been progressing very well, so I would assume that we would see some, some exits during the next 12 months or something.
Yeah.
There's a question, "Your ownership in both energy and real estate went down during H1. Do you have any floor/target where your ownership needs to be?
Well, I'd say that currently, it's not gonna move materially, downwards from these levels, so, that's been sort of the ambition. The fact that it went down is that we had partners or, employees that became partners in the businesses, which is, you know, something that, we encourage, people to become, and then they are also owners of the business.
Any more questions? I don't think so, so I think, we are wrapping up.
Thank you.
Thank you very much!