Good afternoon to all of our investors and everyone else joining us today. Welcome to the webinar presenting Infortar Group's second quarter 2025 results. My name is Kadri Laanvee. I am responsible for Investor Relations at Infortar, and I am joined today by our Managing Director, Martti Talgre. We will begin with an overview of the company's operations and key events in the second quarter of 2025, followed by the presentation of the latest news and financial results. After the presentation, we will answer the questions submitted to us in advance. If you would still like to submit a question, please use the Q&A function at Teams. Today's webinar is being recorded and will be later available at Infortar's investor website. Let's begin with the overview, and I will hand the word over to Martti.
Good afternoon, dear shareholders and investors. Infortar continues to be the largest investment holding company in Estonia. We have focused our operations on three main segments or pillars, and those are shipping, energy, and real estate. In addition to other supporting activities, we have also invested into agriculture, engineering, and printing services. Our shipping investment is Tallink , where we, for almost a year, own 70% of the stake. I think Tallink needs little introduction. It's a solid and strong company, and I think after the challenging first quarter, the second quarter result was already quite strong. When it comes to energy, our main investment there is Elenger Group, which formerly was named Eesti Gaas. This is the company which we have grown over the past nine years into a local champion, being the largest privately owned energy company in the region.
We have continuously grown the company. The recent addition in energy was the acquisition of our Polish company, the second largest privately owned distribution grid company, which is now renamed Elenger and is actually delivering stronger results than we projected. Additionally, we have quite a substantial real estate portfolio, predominantly in Tallinn, around Tallinn, so approximately 141,000 sq m. That makes us one of the largest property owners in this area. Our focus always has been the growth, and that was actually what we promised to you, dear shareholders and investors, back in 2023 when we went public. When we now get to our Q2 results and then keywords or key events of the second quarter, I think the first and most important news of the second quarter is that our sales volumes reached a record €505 million. This is the highest sales number we have ever delivered.
Versus last year, it's approximately 2.5x larger. Of course, part of the increase comes from the consolidation effect of Tallink , which wasn't included in our sales figures last year. Also, our other businesses delivered very strong results: energy, engineering, real estate, all segments showed nice growth when it comes to numbers. Our second quarter EBITDA was €57.4 million. Pre-tax profit was €15.5 million, which is 50% more than last year's second quarter. What is important to point out here is that due to €17 million income tax expense, what we recorded in Q2 because of the dividend payments both in Infortar and Tallink, the quarterly net results showed a loss of €1.6 million. I think what the important number to pay attention to here is the pre-tax profit. As of the end of June, our total assets reached €2.5 billion.
During the first half of the year, we invested €38 million, which is also including, I think, the largest investment recorded there is the Häälinga new biogas plant, which is under construction. The most important transaction from Q2 was the acquisition of Estonia Farmid, the leading agriculture company in Estonia, a leading milk producer as well. As that transaction was closed at the beginning of July, there are no numbers included in our consolidated results as of the end of Q2. We continuously focus on profitability. I think it's good to see that both energy and shipping are delivering better results than in Q1, which was quite a challenging quarter. From that respect, Q2 has been significantly more positive. When talking about segments, the keywords when it comes to Tallink are improving results, of course. The second quarter was solid.
What is really good to see here is that the number of ships which didn't have work, which were standing idle, has reduced from four to two. Two of the larger vessels, which didn't have a role, have now found a solution. MSR is sold and MS Romantic is chartered out. Definitely positive developments. The passenger number is picking up. Cargo volumes recovery is a little bit slower, but we are looking at this positively. The end of the second quarter was actually already better than a year ago. As the third quarter, which is the main cash generation quarter for Tallink, is upcoming, we are looking positively on this year's numbers. When it comes to energy, Q2 this year was significantly better than last year. Energy sales volumes were up, profitability was up, the sales number was up. I think good news from energy.
When it comes to real estate, everything has gone according to the plan. The new logistics center for Rimi was handed over to the customer in Q2, and also the bridge in Pärnu was completed. All the other development projects are going according to the plan. Now, Kadri, a few comments from you to numbers as well.
Thank you. Now on the screen, you can see the second quarter 2025 results. Our revenue grew in the second quarter to €505 million compared to €204 million last year. The increase is approximately two and a half times. For the first time in Infortar's history, quarterly revenue exceeded the half billion euros. The growth we continue to talk about also shows in numbers now. EBITDA in the second quarter reached €57 million, driving a 44% increase year over year. Strong Q2 EBITDA includes Tallink, but it's also worth highlighting that the energy segment performed very well, improving their EBITDA by €20 million in the second quarter. The exact numbers are available in our quarterly report appendix 1.4. Both revenue and EBITDA growth were driven by strategic consolidation and by adding new revenue sources. We are also satisfied with the quarterly operating profit, at €27 million.
In the second quarter, the group paid corporate income tax of €17 million. Both Tallink and Infortar also paid dividends to their shareholders. This tax payment had a significant impact on our total profit numbers, including the effect of Tallink's consolidation. The group reported a total net loss of €14 million, of which €3 million is attributable to Infortar shareholders. The book value of Infortar share continues to increase, reflecting to us strong investor confidence. Regarding the balance sheet and financial position, our assets are up by 67% to €2.5 billion. Liquidity is strong. €146 million in cash reserves provides us flexibility for continued growth. Equity increased from €840 million to €1.17 billion, a 40% increase, also supporting future investments. Net debt increased due to the consolidation of Tallink, but compared to quarter and year-end numbers, it improved a little bit.
The overall leverage has decreased, which is typical for our energy segment, and Tallink has decreased their total debt. The EBITDA ratio has increased when we compared with the same period last year, but it's really due to consolidation of Tallink loans. The current leverage is sustainable, and there is no risk to the group's capital structure. This is all for the numbers, and I will give word back to Martti again.
Thank you, Kadri. Regarding the numbers, just one small comment that when comparing Q2 last year and Q2 this year, then last year, Tallink wasn't consolidated yet. I think that the first quarter, which is really comparable line-on-line basis, is Q4. In Q3, we consolidated only two months. We didn't consolidate the July result. Coming back to the presentations, the Infortar's performance has been solid in the last quarter, and I think it's also good to see that our shareholders have been doing quite well. Since the IPO, the total return has been 83%, and also we have paid a good dividend during that period of time. I think the good feedback here is that our number of shareholders has grown from 5,300 what we had after IPO to 6,500, so 20% of growth of the number of shareholders as well.
Moving forward to the next slide, we pointed out that the most important investment in Q2 was the acquisition of a leading Estonian agricultural company, Estonia Farmid. There has been a lot of interest around this transaction, so we decided that we're going to give a short summary of what business we have entered into. A quick recap is that the first investment in milk production was done by Infortar in Q2 last year. That was the investment into Häälinga. Now adding Estonia Farmid here actually makes Infortar Agro, which is the parent company now for those two agricultural companies, one of the leading milk producers in Estonia. Those two companies, what we own, operate 13,000 hectares of cultivated land. Just to give you a bit of perspective, it is 0.3% of the total Estonian area, and it's 1.3% of Estonia's cultivated or arable land.
Altogether, we own approximately 8,500 animals, and this number includes 4,300 dairy cows. The productivity of our farms is super high. The average yearly production of a milk cow is more than 13,000 kilograms of milk. That means that we produce 160 tons of milk per day, which is 53,000 tons annually, and that is approximately 6.5% of Estonia's total milk production. Infortar Agro, the fully owned subsidiary of Infortar, in addition to those two agricultural companies, also has a 50% stake in Eesti Biogas. That is the company, AJEWI, which owns and operates three very well-functioning biomethane plants. We have recently also started the construction of a new biomethane plant in Häälinga, the farm we acquired last year. There are no consolidated numbers available for that segment yet.
Just taking last year's numbers and having a rough kind of pro forma consolidation basically gives us an indication that last year's total sales of those businesses was €36 million and EBITDA about €11 million. The fact is that the milk price this year is significantly higher than it was last year, so that actually gives a ground for expecting a stronger financial result this year. Now let's move to the segment overview. How our three segments have performed in Q2. I start from Tallink, our first and I think the largest part of the balance sheet as of today. I think all you know that the first quarter was very challenging for Tallink. Out of our three segments, Tallink is actually the one which gets most hit by the macroeconomic situation and the geopolitical situation.
On top of that, the fact was that four vessels in Tallink's fleet were staying idle in Q1. Tallink's business, in essence, is very seasonal. Q1 is the weakest quarter, and having those four vessels standing still and just generating costs impacted our Q1 results quite severely. From that point of view, it's very good to see that there has been a positive development. When we go to the next slide, I start from the balance sheet that over the past period, Tallink has substantially reduced the debt burden. When we go back to the end of 2023, compared to that, we have reduced the debt by €150 million or by 1/3. During this year, we have reduced the debt by €50 million. As of today, the long-term loan exposure for Tallink is approximately €400 million, which is solid and conservative.
That partly was also related with the reduction of the fleet. As I mentioned before, out of those four vessels which were standing, two have found solution by today. MSR was sold and Romantic is chartered out, and the two remaining ones are smaller ones, so the impact is a little bit smaller. If you move one slide forward, here is the seasonal split picture of Tallink. As I commented before as well, Tallink is impacted by macro and geopolitical situation. However, it's good to see that the number of passengers is growing slightly. Unfortunately, the cargo volumes are not recovering so fast, but hopefully this will turn around soon. What's important for Tallink, of course, is to find solutions for all vessels which are standing still. Two out of four are completed, and people are actively working to find solutions for the remaining ones as well.
All in all, we see that Tallink is an efficient company with a very good market position. It's well invested. It's diversified. I think that when we manage to fix the issue with the vessels standing still, and when we see the recovery of the macroeconomic situation, we believe that the performance will definitely improve. That all actually gives us a very good kind of ground to expect that Tallink should also continue or be a good dividend paying share. Moving forward to energy, this is a very good picture here of what illustrates the ambition to find synergies within the group, what we do all the time. Here you see how the Elenger's LNG team is bunkering a Tallink ferry. They're bunkering here LNG, liquefied natural gas.
What's important to note here is that I think in Q2, we made the first bunkering of bio-LNG, the biomethane, which will eventually turn all our vessels fully green. Going to the energy segment as such, this is our second largest investment. This is the company what we have organically and by M&A transaction grown from a small local player into a regional largest private loan energy company. Currently, the company is operating in six markets: Finland, Estonia, Latvia, Lithuania, Poland, and Germany. I think Q2 was the first quarter where the Estonian share was less than 10%. More than 90% of our business in energy is done outside of Estonia. It's quite common for Infortar that we want to diversify our businesses, and this is something what we have done in energy as well. By today, the largest part of our energy business is the infra business.
That basically means that the biggest part of the business is the regulated distribution network assets, and all those are delivering very strong performance. The Polish business, what we acquired in a big part, falls under the regulated business segment. All those businesses have delivered very solid results during this year and during Q2 as well. The companies what we have here are Gaso, of course, the Latvia's monopolistic distribution company, then Gasiverk in Estonia, which is by far the largest distribution network, and then now the Elenger Polska. Altogether, we own approximately 10,000 km of natural gas networks. When it comes to energy sales, we have a growing portfolio here as well. Q2 was, I think, from a volume point of view, the largest Q2. Close to five terawatt hours of energy sold in Q2 alone, which is traditionally a seasonally lower quarter. Quite a solid performance.
The third pillar we have in our energy portfolio is the energy production. The biggest part there is the biomethane production. We have also invested into solar production and are also expanding the biomethane portfolio. A little bit about the numbers. As mentioned before, we saw very solid energy sales volumes in Q2. Just to remind that Q1 was quite weak, especially because of an exceptionally warm winter. Q2 actually allowed us almost to recover to the levels we were last year. I think it's really good to see. That meant that our market share in Q2 alone was 28%. For the accumulating year, it is 23% of the market share in the Finnish Baltic market area. The bio-LNG bunkering I already mentioned. Looking into the future, that is getting more and more important. That is the reason why we are also making our own investments in that area.
Last but not least, the investment we completed at the end of last year in Poland has been delivering really good results, better actually than we expected. I think a very positive quarter from energy. Moving forward to real estate. This is the most boring segment we have in our portfolio, but boring in a good way. The performance has been very stable. If we compare the net operating income this year versus last year, we see a 10% growth there. The first six months, the growth is 8%. I think the first time, we haven't done that before, but this time in our report, there is also a kind of a separate overview of our real estate business, how that would look like if that wasn't consolidated into the group. A significant part of our assets are leased to our own group companies.
Under IFR rules, that means that a significant part of the result is actually consolidated out of the picture. Just to give a better view for investors what our real estate portfolio looks like, we have added an appendix.
1.4.
Okay, 1.4. You can take a look into that. All in all, I think, you know, maybe important things to point out there is that the interest coverage is 3.6 for the real estate portfolio. The loan-to-value is 47%. I think quite solid and stable segment as well. What's important is that Infortar doesn't only develop and own real estate, but we have a very solid and experienced engineering team in our company as well. If we move to the next slide, there are just a few examples of our recent work. The upper left corner represents the new bridge in Pärnu. I think that was a very good example of the engineering skills. I think Pärnu municipality got a very good product, and I think with a very reasonable budget. The picture on the upper right side is a picture of a transformer in a substation.
This transformer weighs more than 70 tons. It's quite an exercise to move that into place. The bottom left picture is from Häälinga, the new biomethane plants we are building. Then there is a picture of Deppo, a new do-it-yourself store, which will be completed next year. Now to wrap up. We have always said that our long-term goal has been to create a crisis-proof company, and we are working for that every day. I think our portfolio as of today is nicely diversified across the three main segments: shipping, energy, and real estate. All those segments are very capital-intensive. They have strong cash flow. They are stable, and they have very high barriers of entry. We are always after the growth. We understand the growth doesn't come by itself.
We definitely want to continue our further expansion, and we definitely want to continue with our M&A activities and capital investments just to deliver the growth. I think another important element of our success is our ability to adapt. We are very agile. We seek out for the new investment opportunities. We have strong liquidity. When we have interesting projects on the table, we can execute them very fast. Also, we want to keep our decision-making process very fast. Although we have grown into quite large companies, we are still capable of making very fast decisions and doing very fast transactions. Like we've been joking that investments and company acquisitions are a little bit like a business as usual for Infortar. All in all, I think that the most important thing for a good company is that the company has a stable and solid cash flow.
This is what we are aiming for, and this is what we have been delivering. That actually gives us tools to continue with the growth and also pay solid dividends for our shareholders. I would wrap this up here.
Thank you, Martti. We have received several questions, and we will start by addressing those who submitted the questions before the webinar. First question, how has the sales and infrastructure business been performing in Latvia, and why don't you talk about Latvia anymore?
Latvia has been delivering very strong results. Similar, a little bit to Poland, the performance has been better than kind of we planned initially. They have been very stable and solid. Like we are joking, we're working with the problems. As Latvia is not a problem or is not a challenge, that's why we don't maybe cover that so much. Latvia is a significant part of our cash generation in the energy segment and is delivering very solid results.
Okay, how satisfied are you with the developments in the Polish market?
As I mentioned before, the first six months' results in Poland have been solid, nicely in line with our budgets. Actually, they have delivered a little bit better results than we forecasted. I think we have a very good team there. We, of course, pay a lot of attention to them. We are very interested in what they're doing. I think the team has been integrated quite nicely. They are rebranded as of today. I think that has been very good, the whole transaction, looking back.
Thank you. What is the long-term impact of consolidating Tallink on Infortar's profitability? Do you regret Tallink's investments?
I think this is not the first time when we have got this question. I think fundamentally, Tallink is a very solid company. They have a very solid market position. I think they're well invested. They have very good assets. As of now, Tallink is the part which kind of feels most severely the macroeconomic and geopolitical situation. I think that Q1 was really challenging. I think Q2 gives us optimism. Q3 usually is the strongest quarter of Tallink. We believe that Tallink management and the whole team is doing a very good job. I think right now the fleet has been optimized to vessels, two large vessels which were standing still have found a solution. I gave an overview of the balance sheet development. Tallink has reduced their interest-bearing debt significantly. We believe that it's a solid company with strong cash flow, with quite reasonable leverage.
Those all are the ingredients of a good dividend payer. I think that from Infortar's shareholder point of view, you felt that in your pocket that last year we passed through Tallink's dividends, and that was €1 per share. This year, it was €1.5 per share. All in all, I think we know Tallink so well. I think that when the fleet gets optimized, when the macro situation will improve, I think it's going to be a very good cash flow.
Thank you. Can you comment on any future plans regarding the biogas sector?
That is a very natural part of our business. We started dealing with this six years ago, so I think we have quite a good experience when it comes to operations. Where do you make money? What's important there? This is the reason why we grow the portfolio as well when it comes to production facilities. I think a positive thing for the future is that now, when the marine segment is getting more and more regulations when it comes to green fuels as well, there is going to be a role for biomethane on vessels as well. From that point of view, it is like a cheap hydrogen or cheaper alternative for the hydrogen. As we have invested into agriculture as well, this is very logical. This is part of a big synergy picture that we have our own consumptions. We understand where the trends are.
We can produce that efficiently. We have farms where we have the raw materials. Definitely, we continue with the growth in that segment as well in all geographies. So far, we have done that basically only in Estonia.
Thank you. Now we have received some more questions. Could you please provide an EBITDA split in the energy segment between energy sales and energy infrastructure in Q2?
We haven't provided that split. That's something we are potentially discussing, that maybe in the future we might do that. Just giving you a flavor that as of now, the bigger part or more than half of the EBITDA is generated in infra. I think that from our point of view and maybe also from the investors' point of view, that is the good thing, that the regulated part is the bigger part of the EBITDA. We have heard the question before as well. We have a discussion that maybe from next year, we might start kind of splitting that as well. So far, we haven't done that. As that is not included in our public materials, we can't give you more than just the fact that energy infra is generating more than half of the EBITDA.
Both companies, Elenger Polska and Gaso, also are ready with their annual financial numbers as separate companies. This is something to look at as well to understand better what's the profitability coming from there.
I think that if any one of you is interested, I think that maybe those reports could be available from Goderich .
Yeah, you can ask and they can share. Elenger Group market share increased in the second quarter 2025 to 27.7% in Finland's Baltic gas market. Could you please elaborate a bit on the reasons behind the market share gain?
I think that the main 27% or 28% in essence isn't nothing, isn't a level we haven't seen before. First, it's quite kind of seasonal variety between quarters. The Q1 drop was mainly related with the fact that the gas consumption was lower and kind of structurally, the bigger part of the gas was consumed by those players who imported their own gas and produced power from that. I think it's more like a normalization of the situation in the market. When you look at our 24 total, it was 24%. It always varies a little bit between different quarters as well. If you would like to point out kind of one single reason, I think the biggest reason was the fact that the previous quarter, the gas consumption was so low and actually Q2 from a gas consumption point of view was a little bit higher than historically.
The open market or accessible market where we could take a stake was bigger.
Could you please add some flavor to Elenger Polska EBITDA and H1?
a little bit the same thing that we haven't been splitting that. I think that most probably, if we would start splitting more the quarterly numbers, we wouldn't go into so much to the regions anyway. As I said before, you know they are delivering strong results, a little bit better than we expected in our plans. Unfortunately, we wouldn't give you any more concrete numbers here in this stage.
Yes, could you please add some flavor on margin energy sales? It seems that they are recovering a bit slower than expected.
No, I think that, you know, when you compare the energy sales margins in Q1, this was really a challenging quarter. I think Q2 is more like a normalized market. I think the market as such is adapting with the new situation. I think that there is no excess of gas in the market. I think that now it more reflects kind of the acquisition costs and things like that. The fact is that when we compare the gas sales margins, what we had back in 2022 and 2023, those were extraordinary times. I think this is not a realistic way to expect that those margins would go back to those levels.
In a big picture, I think that what's good to see is that when you look at the total performance of our energy portfolio, we don't have those one-offs or high, high, high earnings from gas margins, gas sales margins anymore, but we have compensated that with the significantly increased infra business, which is pretty much kind of covering those reductions from the gas sales. Now kind of the cash flow generation is so much more stable.
Okay. It seems that we are done for now and all the questions are answered. Thank you to everyone who joined us today and to those also who will watch the recording later on. If you have any further questions, please be kind and write to me or you can also use your phone. This is all for today. Thank you.