kindly ask you to send an email to investor@tallink.ee for those questions. Unfortunately, our chat function at the moment is not operating on this webinar. I will now hand the microphone over to Mr. Harri Hanschmidt.
Thank you, Anneli. Hello, my name is Harri Hanschmidt. I'm a management board member for Tallink Grupp, and I will give you the short overview about the Q2 results, after which I will give over to Margus Schults, who will continue with the presentation. We have a little bit changed the first slide. We will talk about the latest numbers and also the year-to-date facts. Before we also used to give view to the last year, but I think this information is available for everyone, and we will not repeat ourselves that much. Tallink is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea region.
We own and operate a fleet of 15 vessels, out of which seven are currently chartered out. These vessels we operate on 6 ferry routes. We have one suspended ferry route, the Riga-Stockholm route. We also operate four hotels, three in Tallinn and one in Riga. We have strong brands, the Tallink brand, the Silja Line brand, and also our Club One loyalty program. In the first 2 quarters, we had a revenue of over EUR 400 million and transported altogether 2.6 million passengers. Also, 172,000 cargo units. We have a EUR 1.6 billion asset base, and this is mainly the vessels.
We have over 5,000 employees and 3.1 million loyal loyalty program members, Club One program members, and this program is constantly growing. We have about 39,000 shareholders, 30,000 on the Tallinn of Tallink, Tallinn Stock Exchange, and about 9,000 on the Helsinki Stock Exchange. The key takeaways from the Q2 are as follows: the volume of cargo and passenger transportation was definitely impacted by the different charters that we have done. All together, seven vessels were chartered out, and we had about 18% less trips, and this needs to be taken into account when looking at the volumes for the Q2.
In the Q2, out of these seven vessels, three were on the long-term charter and four had a short-term charter contract. All four hotels are now operating. We opened again the Riga hotel, and we had an EBITDA of EUR 68.5 million, and this is a very strong result and a good recovery from the previous year or compared to the previous year. We also paid back EUR 105 million of loans, and this is not the scheduled amortizing loans, but rather a repayment of the postponed loans from the COVID time, and that was possible because of good cashflow generation from the company.
The fuel prices have gone down, but unfortunately, some of this is set off by a higher logistics costs. As we can see, still we are in a high interest rate environment and in an inflation environment, and this inflation we feel all around. We opened a 6th Burger King restaurant in Riga, and now we have 19 restaurants together in the Baltics. The Tallink Spa & Conference Hotel, the Tallink City Hotel, were certified with the International Eco Label Green Key. As we have quite many charters and these contracts are as well changing, so in the Q2, we had three long-term charters. Now, starting from July 1st, the vessel Isabelle is also on a long-term charter.
Now we all have altogether four long-term charter contracts and three short-term charter contracts. Overall, here are the six routes. Well, Tallinn, Helsinki, we have MyStar and Megastar. This is our shuttle route. All the other routes are the cruise ferries that are operating on the Baltic Sea, and we have the Paldiski, Kapellskär cargo route. The Q2 overview, we can see a slight drop in the passenger numbers. Basically, this level remained the same, but here I would like to remind that we had 18% less trips, we can see that the utilization of the vessels definitely improved. The number of cargo units went down by 22%, and the number of passenger cars rose by 5%.
We ended up in about with about EUR 230 million revenue. That is 11.5% higher than in the Q2 last year. EBITDA went from EUR 28.7 million to EUR 68.5 million and from -EUR 0.7 million net result, we went to the profit of EUR 33.4 million. The total assets were EUR 1.6 million and the debt was EUR 664.9 million. As mentioned, the fuel cost decreased, and here we have it also in a number. The fuel cost decreased 47.9% to EUR 20.6 million versus last year, same time. We had EUR 4.7 million capital expenditure.
Typically, these are the investments to the maintenance of the vessels, IT investments, and also we opened this one Burger King restaurant. Generally, we see good demand for tickets, and this is driving the ticket revenue, and also the charters increased by EUR 19.6 million, and also a strong recovery in the hotel segment. Cost of sales decreased by 9.6%. From a different perspective, the revenue development by the operating segments, we can look at as a bridge view, and we can see that higher demand for tickets and traveling has driven the ticket sales by and we generated EUR 9.6 million more revenue.
Restaurants and shop sales went down by 2.9%, and sale of cargo, EUR 2.9 million, and sale of cargo, EUR 2.7 million. Accommodation sales went up by EUR 1.1 million, and the income from charter vessels went up by EUR 19.6 million, ending up with about around EUR 230 million. The revenue development by geographical segments, we can see that the from the operational side, Estonia-Sweden route had highest increase by EUR 5.1 million, followed by Estonia and Finland, EUR 1.9 million, and Finland, Sweden, saw a decrease of EUR 6.3 million. The other segment, that is basically the charters, saw increase EUR 23.6 million.
Well, this is everything from my side, and I will give over to Margus Schults, who will continue with the dynamics of the financial. Thank you very much.
Good afternoon, also from my side. My name is Margus Schults. I'm Group CFO. On this slide and on the next slide, you can basically see three things. You see the normal year, last normal year, 2019, volumes, revenue, and EBITDA. Of course, the results of three crisis years, with the blue ones, 2023 H1 results. The blocks in each year indicate the quarters. You can see very clearly that we have had in Q1 the lowest season. We also have scheduled all the dockings to Q1 normally, therefore, the volumes in terms of passengers are lowest during the whole year.
From Q2, of course, the number of passengers are starting to increase. This year, we are very happy to see that Q2 passenger numbers were almost on the same level than last year, although we have a much less capacity operating on Baltic Sea. Cargo revenues are about 20% down. Reflecting two things, first, it's of course reflection of reduced capacity, where we have chartered out different vessels. We can also see that the whole market have been shrinking a little bit, not much. It, of course, is a reflection of the economic slowdown. For instance, constructing materials transport to Sweden has been reduced quite a lot because the constructing sector in Sweden is almost sized.
The second thing, of course, what you can see from this is that we have a lot of fixed costs. The number of passengers and the revenue are correlating very much with each other. When it comes to EBITDA level, and on next slide, the net profit level, you can see that the results are done when the passengers numbers are high, and from certain level, the result becomes negative as the fixed costs are there. Yes, as it has been said, we have now cumulatively revenue over EUR 400 million, which is almost the same as the whole year during the crisis, and EBITDA EUR 96 million already after two first quarters.
If you come to net profit level, you can see the dynamics even more dramatic between the quarters. Typically, we made before COVID Q1 negative result. As I said, it's depended on the low seasonality, where passenger demand is lower, and also due to the docking, many vessels are normally docked during the Q1. We made small profit in 2019 on Q2, most of the results are done during Q3. Now, as you can see, the cash flow and the results are much more stable due to chartered vessels, we don't have the burden of some of the routes which may be enduring low season make weaker result comparing some other routes which are stronger.
Basically, we have ended the H1 of year with a negative result. As you can see, cumulatively, it was -EUR 10 million in 2019, now, after many, many years, we have ended the H1 of the year cumulatively with positive result, +EUR 28 million. On income statement, several things already are mentioned. We have increased sales comparing last year, the same period, about 11%, and EBITDA has been increasing from last year already 2.4x . It means that also, EBITDA margin has improved more than twice. Like I said, a negative result in Q2 last year, but this year, the result was EUR 33 million for Q2.
On cash flow, maybe it has good to mention that, or highlight that on operating cash flow, we had very good, strong result, EUR 84 million. Capital expenditure is minor. The normal capital expenditure during these years has been related to the repairment of vessels, but also some IT cost and opening of Burger King restaurants. As Harri already mentioned, and we have paid back during Q2 quite a substantial amount of deferred loans, so the total and debt financing on net level was - EUR 110 million. Also, the cost of our funding has been increasing during this year, so the interest cost has been around EUR 9 million. Financial position on asset side, we have our, mostly our vessels as assets.
I just remind you that during December 2022, we got MyStar delivery, which means that we increased our asset base, but also we got and withdraw the loan related to MyStar. From June 2022 till December 2022, this is a major reason of the change. Then from December 2022 till end of June 2023, we have started normal depreciation of all vessels, including MyStar, and paid back the interest-bearing liabilities. As a result of improved EBITDA and also decreased net debt, we have now reduced the equity to, sorry, net debt to EBITDA ratio from 5.4 at the end of last year to 3.1.
Also, our liquidity has remaining strong, so we can, in spite of paying back deferrals quite extensively during Q2, we had total liquidity, which includes the cash and unused overdraft, EUR 193 million. Our current loan portfolio basically is that we have EUR 620 million of different long-term loans and unused overdrafts in the amount of EUR 135 million. Total number of loan agreements is currently seven, and these are including the working capital, amortizing projects, and syndicated loans.
The maturity is different. Some smaller loans will end this year, but the maximum amount of maturity is 11 years related to MyStar. These loans include both fixed rate loans and Euribor related loans. On the right side, as I said, it, you can see the dramatic move of net debt to EBITDA ratio. Due to very weak EBITDA, it was very high during crisis year, but now basically with 3.1 after Q2, it has been reaching the level which we had before COVID crisis. This is all from my side.
Thank you, Harri and Margus. We will now move on with the Q&A session. Again, those who would want to ask questions now, please send an email to investor@tallink.ee. I will read out the questions we have received so far, and Mr. Paavo Nõgene will be addressing the questions. The first one is, Does Tallink consider investing in online sales in a similar way as Amazon, Kult24, or other similar entities?
Good afternoon, also from my side. Before answering the question, I would like to state that, yes, we had a very strong Q2, and I'm grateful for all more than 5,000 employees who working in Tallink and Silja Line to helping bring Tallink back to the profitable side, since we have had actually three years, quite a tough period because of different crises. The answer is that, yes, we have had discussions, different discussions, how to develop our webshop, but currently, we will use our own version and focusing for other businesses more like our core routes and profitable and efficient operations at the sea. We are not planning to make changes at the moment in our webshop.
Thank you. Is Tallink considering opening drive-in Burger King restaurants or opening any new Burger King restaurants in 2023 or 2024?
Yes, actually, we have already a drive-in in Burger King, but at the moment our focus is to get the Burger King profitable. We're focusing for profitability, and we opening new restaurants only when we see that it's profitable and we see potential in different locations. We are not going to focus, especially for the drive-in versions, because sometimes these are not enough profitable compared to others.
Thank you. Why are the shipping companies concerned about the safety of electric car batteries?
Yes, actually, we have special attention for the electric cars already years. Our crews are trained. We look carefully where we park the electric vehicles, and of course, this is the future, kind of, big amount of cars are already the electric cars, but I said, this is already years for us, regularly, regular day basis work to make everything possible to have car deck as safe as possible.
Thank you. Any indication of what the restaurant and shop sales Q2 growth rate was adjusted for Silja Europa? Perhaps you have a like for like restaurant and shop sales growth for Q2?
We don't share so detailed information, and I just want to state that the difference is not only the Silja Europa, difference is also Galaxy, which operated year ago in Q2.
Any indication of what the tax Q2 growth rate was adjusted for Silja Europa? I guess it's already...
Yeah, I can say-
Answered.
I can say that in Q2 last year, the Silja Europa and Galaxy transported more than 250,000 passengers. This is what we have said already, and this is what we can say now as well.
In terms of seasonality, shall we expect Q2 and Q3 to be roughly the same, or is Q3 still significantly better than Q2?
Dear investor, this we will share October 26th .
Even that the net debt to EBITDA is 3.1, what are your thoughts on dividends this year?
As said, we focus now to start pay the dividends next year. If everything goes right direction, I will fine. At the moment, we can say that the situation is very stable and we are recovering. Of course, to make dividend, to pay dividends or not to pay, we need to make the decision next year when the time is there. We can also say that at the moment, we don't have plans to pay out any dividends this year. We're more focusing to lower our debts to not pay too much interest rates, so to be the sustainable dividend player, payer in the future.
What is the progress of the redundancy program announced in last quarter? When will it be implemented, and what are the expected annual savings?
Redundancy will end when the low season starts, so it's in September. The exact number we can't give out. It depends of different factors.
Has there been any improvement in the flow of passengers from Asia?
Yes, there have been some improvement compared last year, we need to also understand that the last year base was very low. Of course, it takes several years to get back to the passengers numbers from Asia we had before the COVID started. Yes, we see Asians on board of our vessels, but it's quite a small number still, and this needs actually more flight connections between Asia and Europe to have also more passengers on board of our vessels.
Could you comment on status of fuel price hedging?
We have hedged some part of LNG, and this is what we can say.
Thank you. Could you please provide an update on the current charter status of Galaxy I ? Is the charter expected to be extended until the end of the year, or are there plans for the vessel to return to the Baltic Sea? Additionally, is there a decision on whether the Silja Line text on the site will be restored to display Tallink cruise or Tallink branding?
Currently, the Galaxy is chartered out until mid of October. When they're coming up some new news, we will also share it with our investors. No, we haven't discussed change the brandings on the vessels at the moment. It depends also where and what kind of work Galaxy are going to do after charter or after extended charter or et cetera, et cetera, et cetera.
Is there any official information regarding the speculation among Baltic Queen's workers about potential cancellations of all Stockholm cruises from September and the complete closure of the routes?
No. Actually, Baltic Queen is going to dry dock for two weeks in September to improve the efficiency of the vessel before the emission rating system will be applied to the maritime sector. Baltic Queen will return to Tallink Stockholm route on October 15th , and as I have personally ticket for that departure, so definitely the vessel need to be back and start operations between the Stockholm again.
Thank you. While perusing the Dutch news, I came across information stating that Silja Europa will be chartered away until 2025. Would it be possible to provide insights into the reasons behind this decision, if it's real?
Currently, Silja Europa is chartered until end of December. When there are some new newses, we will let all the investors know.
Presently, there is no official news available concerning Victoria I. However, there are rumors among the ship's crew suggesting it continued to use for accommodation refugees in its current region. Could you provide any update on this matter?
Victoria I, actually, are in the dry dock at the moment, and she start sailing back home from U.K. tomorrow. What will be the status for Victoria for upcoming months? There are still different ongoing negotiations, and when the decisions are made, we also can tell about this more. Currently, Victoria is coming back to home, and we have some works to do on board of Victoria. We use this time where we're negotiating different possible works for future to improve the vessel, different departments on board the vessel.
What are the future plans for 22-hour cruises between Helsinki to Tallinn? Is there a possibility of reintroducing a ship on this route? If yes, which vessel is being considered?
When we see that there are enough demand on this route, and for this kind of product, we definitely will bring one vessel to 22-hour cruises between Helsinki to Tallinn as well. As already my colleagues stated earlier, we need to be careful with the capacity we have. At the moment, we have optimal capacity on all routes, and we analyze carefully when we can add any vessels to other routes to keep all the vessels in profitable base.
Could you comment on the absence of special cruises to Visby or Mariehamn this year? For instance, during the quarantine period, there were instances of organizing such cruises using ships like Silja Serenade.
Actually, we used Silja Symphony for Visby cruises, but currently we see more demand on Helsinki-Stockholm route and Helsinki-Stockholm route was right decision for investors as well for this year.
Considering the statement from available sources that Galaxy I will not operate from Riga, I am interested to understand the purpose behind changing the vessel's flag to Latvia and hiring a Latvian crew.
Yes, there are different reasons behind that. It's flexibility of the flag in different aspects, and as Galaxy, we took Galaxy off from Turku-Stockholm route, where she was operating under a Swedish flag, then the change of flag was natural for us. At the moment, she's operating under a Latvian flag. As said, reasons are different, but one reason is also the flexibility of of the flag for current operations.
There is significant interest from Estonian, and Swedish customers on the Tallinn-Stockholm route. Some have expressed concerns about the limited options, with only one ship operating on the route. Would it be feasible to explore the possibility of introducing additional or new vessels to cater to this demand and provide a broader range of exciting cruising experiences?
At the moment, we see that one vessel is enough on Tallinn-Stockholm route, and as I mentioned earlier, if we see there are more demands on different routes, we definitely will act. Currently, one vessel is enough, and it's also good for investors. There are only one vessel at the moment operating.
Thank you. How would you describe the development, like for like, ship by ship or route by route? Is there any increase on every ship in traffic?
Yes, the pax number per ship has increased, because as said earlier, last year, we in Q2 had in operations also Galaxy and Silja Europa. They transported more than 250,000 passengers. If you compare our Q2 pax number with the Q2 last year and take this information into account, then all the ships have more passengers, definitely.
What are the possibilities for a second ship on Stockholm-Turku in 2024?
We don't have this plan at the moment.
What is your view on the current capacity and competition on this route?
As also said earlier, we feel that we have, at the moment, optimal capacity on the routes where we operate, and all these vessels operating profitable basis, which should be the most important for the investors.
Would you consider going from Kapellskär to Mariehamn instead of Kapellskär Långnäs?
Actually, we will start August 21st , if I'm correct, at the moment, operations again between Turku, Kapellskär, and, returning from the Kapellskär, we'll have the stop in Mariehamn.
How dedicated to certain routes are your short chartered ships? Which route would be most desirable to start or scale up again?
It depends of different aspects, including the emission trading system impact to different routes on, from next year. Can't say at the moment. As said, we monitor closely everything, and we'll see how the summer ends, how the autumn goes, and as we have several ships chartered out, we can always bring them back if we see that we have demand here, and we are ready to do it. Firstly, we need to be sure that This capacity, what we will add, needs to be sustainable throughout the year, not only for one or two months.
What about your thoughts about Finnlines and Gotlandsbolaget upcoming plans for routes to Finland for next year?
We wish them good luck.
Would you consider selling chartered ships instead of chartering them out, which would allow to reduce debt and return capital to your equity investors?
We haven't decided to sell any vessels. Instead, we have two charter agreements for Isabelle and Star, which have the purchase option in the contract. Currently, we see that all the vessels are working well and earning profit for our investors. Let's see how the things are going in the future, but currently, we don't have any decisions made to sell the vessels. Instead, if charterers Isabelle and Star will decide to buy out the vessel.
When are the next significant debt maturities coming?
Actually, we have our base plan, how we pay back the debts, and there hasn't been any big changes, why we paid back so big part of the debts. This year, we had a cash sweep in May. As our liquidity situation was very good, we were able to pay back more loans than anticipated earlier. Normal, in normal years, Tallink paying back around EUR 80 million-EUR 90 million per year. This plan hasn't changed. Yes, this year we had the possibility to also pay back in May more loans, which we, as already Harri mentioned, were loans we needed to postpone during the COVID times.
What portion of your total debt is comprised of variable interest debt?
We have, around 40%, with fixed interest. This hasn't changed. These interest rates are good for the investors. These contracts were done quite many years ago.
That was the last questions today. We thank everybody for attending and for the questions. Tallink will hold its Q3 results webinar on October 26th, and we wish you all the best rest of the summer.