Good morning, everybody. Welcome to our webinar. My name is Valdo Kalm. I'm in charge of the group, and.
Andrus Ait, I'm the CFO of Valdo Kalm.
All right, as usual, we will start from main events from Q3. And we have had quite a busy quarter, and the most important I would call also good news is the growth of cargo volumes in Q3. There we have seen growth in all cargo types, altogether 7%. Also, we have seen growth in ninth month, but important is that there are also more ships calling in. Also, we had first green type of the vessel in Muuga, and X-Press Feeders launched a new methanol vessel. It now runs on biomethanol, and they made the first trip in Q3, and they will continue. And they also promised to bring another or next green vessel to our terminal. Also, we have had an increase in passenger volumes. Q3 was quite good in Helsinki route, also in Stockholm route because of two vessels in Stockholm.
And we believe that the volumes will increase further on. Very important for us was the signing of the ferry service agreement for the next period. And of course, that's important for the group, but for the Slawa also. I guess the conditions that we signed are good for us. There is possibility now for investment to gain more efficiency. I mean, we are thinking about the new hybrid or totally electrical vessel for Saaremaa Link. And also regular made additional trips did a good job during Q3 also. Icebreaker Botnica had two contracts for the summer period. First was with BP, but unfortunately, due to the technical reasons, the contract ended earlier with BP. But now Botnica is in a good order and already worked for our main partner in Baffinland very well. The period is already ended. Therefore, also Botnica is in a good shape.
Of course, this affected our Q3 results because of extra cost, but if you take nine months charter days, then we basically had the same number of charter days as last period. We got EU funding for our Twin-Port 6. That's really good news because the funding says that it's 50% for the design and construction of onshore power in Muuga. Excellent news, and we are already designing the electricity connections in Muuga port. Then we signed unsecured loan agreement with Swedbank with better conditions, and then some court cases. First of all, that was the termination of MPG AgroProduction, reorganization proceedings and followed by bankruptcy proceedings. That's good news to follow with bankruptcy proceedings, and hopefully, we will see the end of the process. Then we appealed the Harju County Court decision in relation to our old board members.
We're working still with efficiency, describing the processes, and due to that, we digitalized some of the part and then re-engineered. We also managed to decrease the number of employees by 6%. The main trends by segments, as I mentioned, Q3 was strong or good also on the passenger side. Not only the passenger number increased, but also the vessel calls and then the revenue. On cargo side, we had an increase in all types of cargo. Also, there was an increase in vessel calls and with higher revenue. Ferry business shows very stable development with small increase in passengers and vehicles. Botnica segment or other segment we already described. We had a shorter period, but we started earlier with this BP project. All in all, we had the same charter days in nine months than last year.
There are numbers on passenger business Q3, and also we have growth in nine months. Important is the number of vessel calls, and on cargo side, also growth in nine months. Our ferry business shows stable development with small increase, and Botnica, we mentioned and described already future outlook. We believe that passenger business will recover and that will continue, so also, we see the bookings for cruise vessels for the next period, but ships also increase, and as we mentioned, there is a new container line in Muuga. We believe that there is room and space in Muuga also for RORO line. If we will see the continuous growth of RORO, then we believe there is room for additional line. Developers show interest also in how offshore wind farms based quay and harbor and the development goes well.
As we mentioned last quarter, then we will be ready end last year or beginning of 2026, and we made three international offers. Then we are preparing for the real estate business model. We are quite close to announce the tender, but it depends a bit on market situation because there are a lot of development ideas about business real estate, and therefore, we have to follow market. But basically, I guess first off, next year we will have some tenders for developers, and we're preparing, and we have the plan together with our main owner to reduce the state's shareholding, but it's really up now to our ministry who had to bring the topic to the government, and hopefully, we will have some news even this year. We're working on efficiency, and we're working with our industrial parks.
We are very active on finding the new operators or customers in Muuga Industrial Park and in Paldiski. It's an interesting time. There are three serious projects ongoing in Muuga and in Paldiski. If there will be some news with concrete contracts, then of course, we will let you know. Yeah, please, Andrus.
Thank you all. We're heading on with the financial results. The growth results in the third quarter were strongly impacted by higher cargo volumes. Also, the number of passengers continued to grow. But the one and only negative impact came from the Botnica operations as the ship was chartered out less days. So all those factors impacted our financial results. Revenue in the third quarter decreased by 0.7% to EUR 31.2 million, which is about EUR 200,000 less than last year. Positive impact to the revenue came from vessel quays as we had more vessel calls both in cargo harbors and in passenger harbors. Also, passenger fees increased based on the higher number of passengers. Cargo charges also increased in connection with the higher cargo volumes. And we had also higher revenue from the ferry operations, and rental income also increased.
But the negative impact from Botnica operations was a bit higher than the positive impacts from the other revenue streams. Just EBITDA decreased by 1.7% to EUR 13.1 million , with the drop in similar in euros as it was in revenue. So we can say that the cost level was flat year-on-year basis. Operating costs, there was countervailing impacts inside operating costs. We had extra repair and maintenance costs in connection with the Botnica incident. But at the same time, we have managed to decrease the maintenance costs in cargo harbors. And also, positive effect came also from the lower land tax as the tax rate was reduced in the beginning of this year. Just EBITDA decreased by 0.4 percentage points to 42.6%. Operating profit period was EUR 7.3 million . And it's in euros, similar as in revenue level, so the entire impact came from revenue.
We didn't pay any dividends in the third quarter, so we didn't have any income tax, and the profit for the period was EUR 5.6 million, which is 6.5% less than in the third quarter last year. It's a bit higher than it was in EBITDA in euros, so we had also higher interest expenses this year based on the higher euro dollar. In the third quarter, we invested EUR 8.4 million, which is 77% more than last in the third quarter last year. Main investment project, like in previous quarters, was the quay construction in Paldiski South Harbor, and in the third quarter, we also reconstructed one quay in Muuga Harbor. In nine months period, revenue increased by 2.5% to EUR 19.8 million. The increase in euros was EUR 2.1 million. The positive effect came from ferry operations, from rental income, also the sale of electricity was higher.
And on nine months period, the revenue from Botnica operations also increased by 10% because we had a very strong second quarter. And the summer charter this year has already started in May last year. It was in June. And the positive effect from the second quarter was stronger than the negative impact from the third quarter. So all in all, Botnica operations showed higher revenue. Adjusted EBITDA increased by 5.4% to EUR 40.9 million. Including euros, it's also similar as in revenue, EUR 2.1 million. So the cost on nine months period also flat. There was a slight decrease in operating costs and a slight increase in recurring expenses. But all in all, the cost level was positive, in fact. Adjusted EBITDA margin increased by 1.2% to 45%. Operating profit was EUR 23.2 million, plus 16%. This increase here is a bit higher than on EBITDA level.
Last year, in the first quarter, we had one-off extra impairment or amortization costs as the write-off of some fixed assets in accordance with the changes in legislation as the threshold for recognizing the assets as fixed assets was increased. So last year, we had a little bit of cost level. This year we didn't have this impact. The income tax expense was EUR 3.1 million. Profit for the period, for the nine months, was EUR 14.9 million. The increase was 14.1%. We invested EUR 30.4 million, which is about threefold as much as last year. The main investment project this year has been the quay construction in Paldiski. We're ready to serve the offshore wind farm construction and electrical maintenance. In the third quarter, we reconstructed one quay in Muuga. Also to the harbor, we reconstructed one quay wind.
We had also the first half of the year regular docking works for one of our ferries. When we look at the results in segment terms, we see that in this third quarter, revenue and EBITDA increased in passenger harbors, cargo harbors, and in the ferry segment. The negative impact was attributable to Botnica operations in the other segment. In the passenger harbors, revenue increased based on a higher number of passengers and more vessel calls. In cargo harbors, also we had more vessel calls. In connection with the cargo volumes, also we received more cargo charges. The ferry segment increases attributable to indexation. In nine months period, both revenue and EBITDA increased in all four segments, with one exception in the ferry segment where the revenue decreased about EUR 100,000 . In the ferry segment, EBITDA dropped in connection with severe ice conditions in the first quarter.
We had a higher fuel cost in the first quarter, but the revenue itself has increased due to the indexation in the ferry segment. In Passenger Harbors, the revenue increased a bit due to the higher revenue from the sale of electricity. Also, the rental income has increased. In January, one of the regularly operating vessels to Lingua was docked, and therefore, the vessel was absent from the line, but this strong third quarter had also this negative impact, and Cargo Harbor's revenue also has increased a bit because of higher rental income, because of the support of the third quarter, as the cargo volumes showed higher growth. And also we had more vessel calls, but the growth on EBITDA level has been even higher. This is the result of efficiency measures. We have made less maintenance and repair works this year than last year in nine months period.
And in the segment other, like already mentioned, the revenue from Botnica operations increased by 10% despite the technical issue in the third quarter. And also the EBITDA increased to a certain extent as on revenue level. On cash flow side, cash from operating activities increased indicates the higher revenue. And payments to suppliers were also lower. Cash used in investing activities reflects the higher investment level this year. It was minus EUR 32.9 million. Free cash flow was EUR 7.4 million. Cash used in financing activities minus EUR 15 million compared to the minus EUR 31 million last year. In May this year, we took into use the new loan, a secured loan of EUR 20 million. And we also made more longer payments than last year. And also the interest expenses were a bit higher. So the total impact on financing activities was minus EUR 15 million.
And the net cash flow for the period was minus EUR 7.6 million. And net debt at the end of the period increased by almost EUR 20 million. It's to explain that we had less cash in bank accounts. The outstanding debt itself was quite similar as in the end of September last year. And on financial position, cash in bank accounts increased in connection with investments. Also, the number of assets increased due to the investments. Debt has also increased as we took the new loan. And equity reflects the impacts from the fee increments and that period. So that's all with the slides. But obviously, we have some extra slides about revenue and EBITDA generation. We won't comment on these. Our presentation is uploaded on our website. And if you have any interest, you can explore it later.
And now we will make a short break and will be back in a couple of minutes to answer your questions. Thank you.
All right. Let's continue with the questions that we have. We received through the teams. The first question is regarding the IRR, which we use in our project. Internal rate of return for Port of Tallinn usually we take into account in the project is about 8% at least. Right. And that's what we will try to follow. All right. A couple of questions about the Paldiski offshore wind farm port. When the Paldiski wind farm-based port is expected to start generating actual revenue for the Port of Tallinn? Hopefully, we will be ready by the beginning of 2026. I guess then by the tenders, what we have had so far. And we made a pre-offers.
Already, we hope that there will be revenues and then profits from 2027. That means we need some, of course, documentation and, how to say, warming up the quays. But yeah, hopefully, 2027, we will see the concrete revenues and profits. Now we have some questions sent up front to Gmail. So we'll comment on those questions. When the construction of offshore wind farms planned in the Baltic Sea region, specifically in the Baltics? And when the Paldiski port will generate the real turnover? Just I answered to that. But in the Baltics, we hope that the first offshore wind farm will start in Lithuania. And therefore, it's still a very interesting and exciting region for us. What is the alternative use for the Paldiski port if the offshore wind farm should not go into the operation for whatever reason? Honestly, we're building this quay for dual use.
We have already a concrete customer that's the Ministry of Defence with serving the NATO troops and ships and vessels, but honestly, our Paldiski port is very busy. We can't take any regular RoRo line to our port because all the quays are occupied. If there are really very long delays or postponing of the contracts for offshore wind farms, then we definitely can use a quay for RoRo and find operators there. The government of Sweden has rejected some of the offshore wind power projects in the Baltic Sea. Will there be some effect for the Paldiski investment, or are you going to postpone the investment? We see there are some effects, but honestly, so far, we have not made any offer in the tenders to Sweden. We did free offers to other regions, and therefore, we don't see such a huge effect.
They rejected only part of the plants, not totally. And of course, Sweden is also an interesting country. But there are other areas to build and then maintain. And as I already mentioned, the quay what we just now are constructing is dual or triple use. That means we can use the very good ramp. We can use it for military and then for the RoRo. Therefore, we are not going to postpone the investment. And we believe that there are many possibilities to use the quay and also the backyard of the quay. All right. There was a question about DBT. That's the fertilizer operator in Muuga. Do you see that there is a risk of bankruptcy, or what are the other alternatives? Honestly speaking, we don't see the bankruptcy case at least yet. Of course, we don't believe there will be transit of fertilizers during the war.
It's not possible, definitely, and at the same time, there are already some other, not the transit business, but some other fertilizers business going on. One big Norwegian operator came in and is operating via Muuga. Therefore, let's see, but at least now we don't see any bankruptcy development on DBT.
Next question. Question regarding the Baltic operations in the third quarter. Can you tell us how much the negative impact on operating profit this quarter was from the early termination of the MPG project and also from the repair costs? The total impact was for about EUR 2 million or EUR 2.5 million, so it came from lower revenue and to the repair costs. Can you expect the European Commission grant money recognized in cash flows this year? Yes, we have some signs that we will receive some grant money already this year.
Just a reminder that the EU support will be EUR 10 million of the EUR 20 million, which is the project cost, or 50%. And some part of EUR 10 million will still probably be in December this year. And the last question is how much of the group's EUR 33 million investments made in nine months related to the quay construction in Paldiski, for about EUR 29 million of the total investments were made in the Paldiski project during the nine months.
All right. Then thank you for your questions. Thanks for attention and all the best. All the best.