I'm in charge of the Port of Tallinn Group, and with me, our CFO, Andrus Ait.
Good morning.
Let's start with the most important events from Q1, Q2, sorry. Then, of course, we will address six-month results also. Go ahead. Q2 was quite a good month in terms of cargo volumes, + 8%. I will come back to that, where it comes. Also, on passenger numbers, we have seen quite a good and strong June, especially June, but all quarter two was good. Got a lot of help from cruise passengers also. For us, it's very important to have more vessels, both on cargo side and on passenger business. Our ferry business also shows growth in terms of passengers and vehicles. In Q2, we signed an additional trips agreement for Regula. We had a shareholders' meeting. We approved our dividends as we promised on our dividend policy- level and even more. There was an election of new supervisory board members and auditor.
We celebrated the 35th anniversary of Tallinn-Stockholm route. For us, it's important to support and move on with Rail Baltica terminal. In Q2, there was a signature of contract for the design of Muuga terminal. To the business areas, more precisely, on the passenger side, as I mentioned, we had an increase of 4%. It came from regular lines, but also Q2 was very good for the passengers coming from the cruise. The increase was 25%. We got also very good vessel call- number, almost doubled as last year. Also, July continued the same trend. All in all, revenue increase of 8%. On cargo, there was also an increase of volumes, revenue. The biggest growth came from liquid bulk, dry bulk, and general cargo. Also on containers, but a small decrease in Ro-Ro. Ferry business shows stable numbers, increase of the number of vehicles and passengers, stable revenues.
On Botnica, there is a decrease of charter days compared to last year due to the longer discussions and postponing one contract with one Canadian operator. Therefore, we see also a decrease in revenues influencing our group figures also. As I mentioned about the passenger numbers, the increase of passengers is important, but on the other side, very important is the number of vessel calls, which also shows an increase from last year. Same in cargo, increase of different bulks, about 5% increase in vessels also is quite interesting for us. Our ferry business shows stable development. There are also numbers from six month. As we mentioned on Botnica, there is less utilization- rate and charter days than last year in Q2 and also on six- months.
We will comment on the cost- side also that we didn't lose on profits, but on revenues, there is a decrease about the future. Basically, the same trends as we commented last quarter. We see the recovery of passenger numbers. As I mentioned, July also shows quite a good development in terms of regular international passengers and also cruise passengers. For us, it's very important to find new roro and container lines. In Q1, we added one container line. We have a couple of negotiations with different companies because we have enough capacity in Muuga. It's quite tough now in Paldiski, but we're building the new multifunctional quay. I guess we have excellent conditions for the future also to add some new shipping line also in Paldiski. We're working on our industrial parks in Muuga and Paldiski.
Hopefully, from the practical point of view in Muuga, JetGas OÜ will start building their terminal even this year. We signed the contract Q4 last year. There are some developments also in Paldiski. For us, that's a strategic- approach to have new operators, new manufacturing companies in our industrial park. The multifunctional- quay in Paldiski is under development. Everything goes as we planned. The quay is ready. The ramp is ready. Now we're working with this 10 hectares of the land. Hopefully, we are ready in Q2 next year as we planned. We are preparing for the real- estate business. As we promised, we'll try to start this year. If everything goes well, then we have in our plans and with negotiation with the city government to fix two detailed plans from five of them. We are ready to really start with real estate in a longer-term perspective.
Of course, efficiency, efficiency, efficiency. That's important. All the time, we, I guess, manage quite well our maintenance cost this year. We have a certain plan for maintenance also on the second quarter. I guess we are keeping under control the personnel cost. Now I would like to give the floor to Andrus to explain the numbers from Q2 and six- months.
Thank you, Valdo. These are the financial results for the second quarter and six-month period. The financials were strongly impacted positively by increase in volumes. There was growth in vessel calls, also cargo volumes increased, and also the passenger numbers. In addition to that, there was a positive effect on profitability from the sale of land in Muuga Harbor for the freight- station construction for Rail Baltica. Also, receivables classified unlikely were recovered. Due to that, we had lower costs. On the other hand, on the negative side, the charter days of Botnica were lower, and also the income tax and dividends increased. There were also negative impacts on profitability. Revenue in the second quarter decreased by almost 7%. The main reason behind that is the decline of the charter days of Botnica. Last year, in the second quarter, the so-called Summer Charter Project started already in May.
This year, May and June were waiting for Botnica. From that, we had the negative impact on revenues. All the other main revenue streams like vessel dues, cargo charges, and passenger fees increased. The only revenue item which decreased in addition to the charter fees was the sale of electricity, but it was because of lower consumption mainly in Cargo Harbor. There were also lower costs on the cost- side, and profitability wasn't impacted by the sale of electricity. Just a little bit, despite the decline on revenue, adjusted EBITDA increased by 7% and amounted to EUR 15.9 million. The increase was a bit more than EUR 1 million. To explain that, the positive effect came from lower operating costs. Operating costs decreased by EUR 1.6 million, and EUR 1.1 million of that was attributable to Botnica activities last year when Botnica was chartered out. Then the ship had also higher costs.
For example, we had to rent the special equipment for the icebreaker. Also the fuel costs were higher, and we had to make more repair costs. This year, we didn't have this kind of costs for Botnica. In addition, we also made less repair works in cargo harbors and in passenger harbors in the amount of EUR 500,000. This also was as a result of efficiency measures. We also had the positive effect from the sale of land in Muuga Harbor. We sold eight premises, and the effect on EBITDA level was +EUR 900,000. We managed to, the receivables which we had classified unlikely, were recovered. Due to that, the impairment of financial assets was positive, and the positive effect on EBITDA level was + EUR 100,000. Personnel expenses in the second quarter remain flat.
There was a decrease in the segment Other because of lower charter days of Botnica and some increase in the ferry segment and in the harbors, but all in all, personnel expenses were flat. Adjusted EBITDA margin was almost 54%. The growth year was plus 6.8 percentage points. This is quite a high level for the Port of Tallinn Group. Even when we take out the one-off effects from the sale of assets and from positive impairment of financial assets, the level then is still about 50%. Let's say the core business showed good profitability. Operating profit increased by 12% and amounted to EUR 10 million. Growth years here was also EUR 1 million, which is similar than on EBITDA level. Income tax on dividends increased by EUR 2.3 million because of changes in tax law. Last year, we had a lower tax rate for dividends, which was paid out regularly every year.
This year, this lower rate was abolished, and therefore, the income tax costs on dividends increased. The dividend payout itself was equal than last year, EUR 19.2 million. Net financial costs decreased by EUR 700,000 due to the lower Euribor rates. Profit for the period decreased by 15% and amounted to EUR 3.5 million. Profitability was strongly impacted by higher income tax. In the second quarter, we invested EUR 8.4 million. The majority of that was made in Paldiski South Harbor, where we proceeded the quay construction. The quay construction investment was about EUR 5.3 million. In addition to that, we had regular docking works for one of our ferries and also for Botnica. We improved one quay in Muuga Harbor, where we served the container ships. On a six-month period, the pattern of the results is quite similar. Revenue decreased. Adjusted EBITDA increased.
Revenue decreased because of a lower number of charter days of Botnica. Other revenue streams increased. Adjusted EBITDA increased by 8%. In the first quarter, we got the indemnity payment from Endurance in the amount of EUR 900,000 for Botnica repair works, which we made last year. This was an additional positive effect on a six-month period. In the ferry segment, we had lower fuel costs because of milder ice conditions in the first quarter this year. Adjusted EBITDA margin was over 51%. Operating profit increased by almost 15% and amounted to EUR 18.2 million. Profit for the period increased by 11% and amounted to EUR 10.2 million. On a six-month period, we invested EUR 12 million. In the second quarter, the main project was the quay construction in Paldiski, EUR 7.3 million. In the first quarter, we had also the second regular docking work for the ferry. These were the main investments.
Last year, on a six-month period, there was an elevated investment level due to the start of construction of the Paldiski quay. Due to the investment cycle there, there was kind of an elevated investment level. These are the results of the business segments. In the second quarter, passenger harbors and cargo harbors showed very good growth both on revenue and EBITDA level. Passenger harbors, the revenue increased by 8% or by EUR 800,000. This was mainly because of a higher number of vessel calls and a higher number of passengers. Also, to some extent, it was impacted by higher tariffs because we increased the tariffs in the second quarter of this year. In the cargo harbors, the revenue increased by 9% because of a higher number of vessel calls and also the cargo volumes increased. Here also, like in passenger harbors, the tariff rates or charges were increased.
They were partially impacted by this. On EBITDA level, the strong growth was attributable to the sale of land. We received payments from clients for the invoices, which were classified unlikely. The impact from that was EUR 700,000. Also, the cost cuts and lower costs impacted the EBITDA positively. In the ferry segment, revenue increased a bit due to the indexation. EBITDA in the second quarter decreased a bit because of higher costs, mainly personnel expenses. In the segment Other, revenue decreased because of a lower number of charter days. At the same time, the costs were also lowered by EUR 1.5 million. The drop on EBITDA level was significantly lower than on revenues. On a six-month period, same explanations go here as well. In the ferry segment, we had milder ice conditions. Due to that, the costs in the first quarter were lower. The EBITDA on a six-month period also increased.
In the ferry segment, we received the indemnity payment in the first quarter. This was also the extra positive effect on EBITDA level in the segment other. In cargo harbors and passenger harbors, there were higher volumes and a higher number of vessel calls and lower costs. Therefore, the profitability and revenue increased. On the cash flow side, cash from operating activities increased by EUR 1 million. Sale of goods and services increased and payments to the suppliers decreased. The negative effect came from higher income tax payment on dividends. All in all, in this item, the growth was + EUR 1 million. Cash used in investing activities was + EUR 20 million compared to the -EUR 22 million last year in the same period. To explain that, at the end of last year, we placed more than EUR 20 million to bank deposits with the term more than three months.
During the first half of this year, those deposits were terminated and we received the money. There was a positive effect. In addition to that, the sale of land in Muuga Harbor impacted this row. The investments itself were also lower than last year. Last year, we had an elevated level of investments. Due to that, there was a negative number on a six-month period, 2024. Free cash flow was almost +EUR 47 million. Cash used in financing activities was -EUR 23 million. It was impacted by dividend payout and interests on loans. Last year, we took a new loan, drawn a new loan, and therefore, the cash flow here was less negative. Net cash flow at the end of the period was EUR 23 million almost.
At the end of the period, it decreased by EUR 20 million because we had more cash in bank accounts and we have made bank- loan repayments. On the financial position, we don't see any significant change here. Other current assets decreased as the non-current assets held for the sale decreased as we sold the premises in Muuga Harbor. Therefore, this item decreased. All other figures in the balance sheet were quite stable. Equity decreased because of dividend payout and was positively impacted by the profit of the period. Like always, we have some extra slides about revenue generation and EBITDA generation, but those we will comment. The presentation is uploaded on our website. You can browse it later. Now we will make a short break. We have received some questions upfront, and those questions we addressed first.
Please submit your question to Teams, and we will be back in a couple of minutes. Thank you.
All right. We are back. Let's start with the questions, what we had advanced from the previous Estonian language webinar. What is the perspective for the South Port development now? When will AS Tallinna Sadam find an operator and when will be the first revenue from the quay? As we mentioned, we are building a multifunctional quay and also 10 hectares special backyard to the quay. We still hope that it will be ready Q2 next year. Our main purpose is to find an operator who is building the offshore wind farms in old Paldiski. We are not concentrating on Estonian projects. We see still interest, especially coming, for example, from Finland, Poland, Lithuania. Therefore, that's the main purpose. On the other hand, we have a lack of Ro-Ro resources.
That means we need additional quay for Ro-Ro and to general cargo, which we can handle better with this new quay. With all that, we hope that if the execution of the quay will be on Q2 next year, then basically in the second half of the year, we would like to see revenues coming from this new quay. Next question. Can and where would we see an increase of AS Tallinna Sadam sales volumes in the coming years? On passenger business, we still believe, if you have a perspective one year from now, that there will be the recovery in passenger business. The Q2 shows the trends, and also July was quite strong in terms of regular lines and cruise business. On cargo, we believe that export- import will increase in Scandinavia. We see a good development just now from Sweden, recovery from Finland.
That drives hopefully container and Ro-Ro. It is very difficult to comment on liquid bulk. That's a very project-oriented business. We believe recovery also in volumes in the coming 12 months. Next question. Is there a plan to build a sister ship to Botnica? The short answer is yes. The plan is still valid. We now study the market, and also we try to understand what is the multifunctionality for offshore ship. That's all what we do by the end of this year. Hopefully, then we will have a certain type of decision. About Botnica, next question, what is the outlook for Botnica's work- volume for the second half of this year? Here, we can comment that we have just now negotiations with two companies, one in Canada, one in the North Sea. We hope that we will have, let's call, summer-autumn job as we had last year.
It really depends on negotiations, but they are ongoing, and we have, yeah, concrete companies behind that. Andrus will, okay. All right. There is also one question advanced, what we have to, and we would like to answer. Looking ahead to the next 18 months, what would be the biggest risk for Port of Tallinn Group apart from the macroeconomical environment? Are there any significant bottlenecks in terms of growth projects? The biggest risk, as I just explained, the shipping and Botnica case, then we see that's the biggest risk to have a summer job to be very competitive, although there is still an offshore market very active. We just have to be also very proactive and find the projects. That's maybe the biggest risk. I don't see any significant bottlenecks in terms of other projects.
Thank you. I take the next question regarding liquid cargo. Liquid cargo volumes have started to recover strongly. What is driving this, and how sustainable is the current level or trend? The liquid bulk volumes were supported mainly by project-based volumes. Currently, those volumes have been quite stable, but it is quite difficult to forecast the future about the project-based volumes. Usually, we don't give any forecasts out, but I can say that currently, those volumes are stable, but it's hard to forecast the future. We hope that at least those volumes which we already have will be stable. Regarding roro volumes, are there trends in the current quarter better compared to the previous quarter, and can we expect roro volumes to be stronger in the second half of the year? We actually don't see any significant changes in Ro-Ro volumes and any trends there.
It's also very difficult to predict or forecast the future. It depends on macroeconomics and the growth in the Nordic states. If there will be stronger financial results, we hope that Ro-Ro also kind of shows the correlation of the macroeconomics of the Nordic states. You have previously indicated that this year's investment level will be approximately EUR 35 million. Is this still an expected level? We can say that due to the lower investment needs in maritime segments, there will be some decline, but the overall investment level for this year should be somewhere in between EUR 30 million and EUR 35 million. There will be some decrease probably, but a couple of millions. The key construction in Paldiski, this is going by the plans, and there we don't see any decline. What is the Port of Tallinn long-term net debt/EBITDA target or maximum upper limit? The limit is 4.5.
Currently, the level is lower. We have the ability to take new loans and invest in the growth projects and do the necessary investments. There is plenty of room to invest in the future as well. We take the questions which we received through the Teams during the presentation.
What are your priorities between dividend payments and growth investments? Which is more important? We always try to find the right balance between dividends and growth projects to cover both. More important in this period just now is to fulfill our dividend policy and pay out very stable dividends.
I think the next one, what could be the level of investment in 2025? Will you postpone a possible investment to the multifunctional service vessel? I already commented on the investment level. Actually, the investment of a multifunctional service vessel or new offshore vessel wasn't one of the investments of this year. Rather, it was like a future project. We probably will make the next decision or some decision by the end of this year and don't disclose it publicly.
You highlighted that it's now tough in Paldiski. Do you mean that you don't have enough new tenants or less than originally planned? We didn't actually have such a tough message. We see that there is, yeah, some lack of Ro-Ro vessels. As we're building the multifunctional quay, that also helps on that. Therefore, we're just now working with this investment as we planned. We hope that we will see revenues immediately when this investment is completed.
Last question. Are there some one-offs or what could be growth in cargo volumes in the future? I would comment that this year we had some positive effect, probably from the construction of Rail Baltica because the gravel volumes increased. We hope that this also continues in the future, and even maybe there will be some growth as well.
All right. Thank you for the questions. With that, we are finishing our webinar and see you on Q3 webinar. Thanks.
Thank you. See you.