Welcome to our webinarium. My name is Valdo Kalm. Here is Andrus Ait, our CFO. I would like to start summary from Q1 and the main events. Q1 was quite tough. Revenue remained at the same level, but some volume decrease due to the heavy winter and also many docks in our own passenger vessels. Also, there was a cost increase mainly due to the high energy and fuel cost. In the Q1, there was one positive influence from last year by one of insurance payment for Botnica repair works, almost EUR 1 million. To the main events.
As I mentioned, there was decrease in volumes, mainly in cargo segment, to the winter conditions, and we saw the decrease in liquid bulk, and then we had several free docks of passenger vessels. We also signed agreement to use our ferry Regula until the end of 2028. That means that we have to invest a bit. All in all, the agreement is good for us, and that means that Regula will be in operation till the end of 2028. We finished our new quay in Paldiski South Harbour, and also, we got or received use permit and also what is more important, we received first ship calls.
Here on the slide you see quite a big vessel carrying the elements of wind farms. We serve just now via Paldiski, and via already this new quay Latvian onshore wind farm. That means that he is in a, in a use already. It's very multifunctional. The ramp is carrying very heavy cargo therefore there are a lot of possibilities and we also already saw first military ships on a quay and we see increase of that also, of military. Positive is that cruise season started very early, already in March.
We also got some huge vessels and overall prognosis for a cruise season is very good, some 20% and more ships than we also believe the increase of passengers at least 20% therefore, that's definitely supports our passenger volumes. There was also on civil court proceeding agreement against former Management Board members. The trends in business segments, as I mentioned, there was decrease in passenger numbers, but more in even in vessels due to the free ship dock. If that was all planned. We need that our operators investing to the ships and it's quite natural and now we hope that at least we don't see any big docks in ahead for the entire year. On cargo, the biggest decrease was in liquid bulk.
At the same time we managed to have growth in Ro-Ro. That's our biggest cargo segment but shows a positive trend on export/import. We believe that we hope that that will continue and that's most important because Ro-Ro is nowadays the far biggest segment. Ferry segment shows very stable numbers and also Botnica under the other segment showed the same number of charter dates as last year. Here are the passenger volumes as we mentioned, and there you see on left or right side of the slide the yearly based numbers. There is most important number of course is the vessel calls to keep it on a very stable level. That's our aim.
Step by step they increase the passenger numbers. On cargo side, I mentioned, decrease in liquid bulk, increase in Ro-Ro, and again, yearly basis, we would like to see stable or tiny growth on cargo vessel calls and in cargo volumes. Shipping did, ferry segment did very stable Q1 and same for Botnica. Here you see the yearly numbers also. We believe that this year shows better number of utilization rate or charter days. We signed a first agreement with Swedish company on the North Sea. If everything goes well, then Botnica starts in the beginning of June, the first summer job, and there is continuous negotiation with some other summer jobs. Future outlook, very briefly.
We believe that we will have also, we will see the tiny increase of passenger numbers that's mainly due to the prognosis for the cruise business. As I mentioned, we see quite a good increase of bookings of vessels, and the vessels are bigger and bigger. They carry more passengers, therefore we believe in increase of passenger numbers also. Definitely it's important to negotiate and try to find new Ro-Ro or container lines. If that will happen, we definitely report that. There are ongoing, two, three negotiations for Muuga and then Paldiski ports. We introduced already FIN-EST Corridor and then on November last year, we signed with Ports of Stockholm Swed-Est Corridor to increase the volumes between Tallinn, Stockholm and Kapellskär Paldiski.
Now we are going to sign a new agreement with Hamburg and Lübeck. There are already vessels calls between our ports, but there are room for increase to introduce better our capabilities and therefore we're traveling now in the middle of May to Germany and in delegation there are also shipping lines with us. We believe that there are room for increase the capacity in sustainable way, of course. As I mentioned, important is to now utilize more multifunctional quay in Paldiski. It's already in use, we negotiating also with some other deals to the quay and to the backyard of the quay. If that will happen with bigger volumes, we again will announce about via stock exchange.
We just recently started a new industrial park campaign in Muuga. We got back the area showed here on a slide about 20 hectares with excellent quay. There is no need for additional investment. Just we have to find right operator or constructing company or producer. This time, this campaign is really international. We also hope that there will be certain interest from Scandinavia. Preparation for the real estate business is ongoing, and our plan is now introduce the tender in early autumn for the two areas, and we preparing now for that. Finally, efficiency. That's what we working in long term and short term and continuously. I would like to give floor to Andrus for more precise comments about our results and numbers.
Thank you, Valdo. These are the financial results of the group for the first quarter. The results were impacted by severe ice conditions, docking works, and high energy prices. In addition to that, last year in the first quarter, we received indemnity payment for icebreaker Botnica, this also impacted the results or the comparison period. The revenue now decreased a bit less by a bit less than 1%, and amounted to EUR 28.2 million. The decrease came mainly from the vessel dues because we had less vessel calls in cargo harbors.
The reason was mainly the severe ice conditions, in passenger ports, three ships, which are regularly operating in Tallinn, Helsinki, in Stockholm, were in docking works. For example, the Eckerö Line ship Finlandia was off from the line more than three weeks. This impacted the vessel calls in passenger harbors. In connection with that, the number of passengers also decreased, therefore we had lower revenue from passenger fees. Cargo charges also decreased because lower cargo volumes, the offsetting effect to the revenues came from the sale of electricity, because of the good weather and high electricity prices, the revenue increased.
Starting from March this year, we also are implementing new price lists for electricity network service. This also helped to offset the decline in revenues. Adjusted EBITDA decreased by 17% and amounted to EUR 11.6 million. The decline in euros was EUR 2.3 million. This can be explained by three factors. Firstly, like already mentioned, in the first quarter last year, we received insurance indemnity in amount of EUR 100,000. The cost level last year was due to this one-off impact, EUR 900,000 lower. Ice conditions caused higher fuel consumption, also the fuel price went up.
This impacted the fuel costs in the ferry segment. The fuel costs were higher, about EUR 800,000. Also the cost of electricity increased by EUR 0.5 million. Therefore, these were the main cost items which impacted the operating costs and also EBITDA. Adjusted EBITDA margin declined by 8 percentage points, down to 41%. First quarter, we didn't pay any dividends, therefore we didn't have any income tax. Dividend payout we will make in the second quarter in May. Net financial costs decreased because the outstanding amount of loan decreased, and also the EURIBOR level was lower this year.
Profit for the period decreased by 1/3 and amounted to EUR 4.6 million. First quarter, we invested EUR 1.3 million. We completed the construction of the multifunctional quay in Paldiski South Harbour. This was the main investment project i tself got the use permit in February, so in the first months we made the final investment there. Also some new equipment for the ferries. Moving on with the results, divided by the segments, we see that the revenue decreased in the cargo harbors and passenger harbors. Ferry harbors, there was some increase due to the indexation. Segment other revenue was stable.
The passenger harbor, the revenue was impacted by lower number of vessel calls and passenger numbers. Actually, the cargo fees in passenger harbors increased because of increase in Ro-Ro, which is the main cargo type for the passenger ports. On EBITDA level, in passenger harbors, there was a decline because of increase in operating costs. We made more repair works this year, and also there was increase in salaries or personnel expenses. In cargo harbors, there were also impact from the vessel calls, less vessel calls. The cargo charges decreased because we had less cargo, especially the liquid bulk decreased.
On EBITDA level, the decline was lower than in revenues because we made less, less repair works in the cargo harbors. In the ferry segment, revenue was quite stable and more small increase and decline on EBIT level can be explained by higher fuel costs mainly. Also the personnel expenses were a bit higher because we had to bring the Regula on the route because of the ice conditions. Usually, for Regula in winter period, we have smaller crew. This year, had to hire the full crew there. This was the explanation for the higher personnel expenses.
In the segment other, the EBITDA was impacted by the insurance indemnity last year, which decreased the cost level 2025. Other costs were quite similar. Botnica costs aren't impacted by higher fuel costs or consumption because the icebreaker was chartered out for the full quarter and the fuel costs are fully covered by charterer or by the state. On cash flow side, cash from operating activities decreased because of lower revenues and higher costs. We also made one repayment for our client. We returned actually the advanced payment. Last year was also impacted by the insurance indemnity here, which was, you know, EUR 100,000.
Cash used in investing activities was positive, almost EUR 1 million. To explain that, this year we received EU grant money in amount of more than EUR 5 million. Last year it was EUR 2.6 million. This grant money which we got this year was in connection with an OPS or onshore power supply project in here in Old City Harbour. We also invested less than last year in the first quarter. Free cash flow was EUR 12.9 million. Cash used in financing activities was lower because EURIBOR levels were lower and the outstanding loan was also lower. Due to that we paid less interest.
Net cash flow was EUR 11 million, and net debt at the end of the period was EUR 130 million. The decline here was more than EUR 19 million. We had more cash on bank accounts, also the level of outstanding loans has decreased compared to the first quarter last year. In financial position, we see that compared to the year-end period, the cash in bank accounts has increased because of the positive net cash flow. Non-current assets decreased because the amortization exceeded the investments in first quarter. Equity was impacted by the profit of the period.
Other liabilities increased because of the that we received the EU grant money. The debt decreased because of the loan repayments in the first quarter. This is all from our side. Like always, we have also some extra slides about revenue and EBITDA generation. These slides we will comment separately. You can submit questions by Teams. We have also some questions sent upfront. These questions we address at first. We are back in couple of minutes to answer the questions. See you soon.
We are back with our answers, and the first question looks as follows. Updates on leasing success at Muuga and Paldiski Industrial Park. As I mentioned, we just started with a new international campaign in Muuga. From the previous more local campaign, we got one very interesting partner. Negotiations are ongoing, but no contracts yet, and same applies for Paldiski. Definitely we already working on a new quay and on the backyard with onshore wind parks in Latvia, at the same time we're negotiating already new deals. Second question. The current status of MPG Agro Production campaign. Yeah, that's basically the same area as I described.
That's this 20 hectares of backyard of quay and that's the campaign what we just started. Therefore, any results yet? Any progress on securing new lines of agreement for the Paldiski South Harbour, a new quay? Yeah. As again I mentioned, there are also ongoing discussions with shipping lines and sometimes the shipping lines are interconnected for the bigger project. Therefore, there are a couple of negotiations ongoing. Definitely we would like to and we have to utilize this new investment and the very good conditions what we have on this multifunctional quay in Paldiski. What about status in the JetGas LNG project in Muuga?
Good news is that they or JetGas got the license or permission to build the terminal. If everything goes well, they will start this year. There is demand on a market for bio-LNG. That's no doubt on industry side, but also from shipping companies. Therefore, we are quite positive that they will start the investment and there is a market for the LNG.
This next question regarding the drop in lease income. You know, we can explain that through the fact that the drop was caused mainly because of the fact that we got back the land, the same land, from the Muuga Agro production, where we arranged a new competition or tender. Last year we recorded this income in revenues and immediately estimated it a lot like uncollectible, so there wasn't any impact on EBITDA level. This year we got back the land and don't see any revenue from that. We don't have also any write-offs as well. On EBITDA level, this is a zero impact.
What are the plans for increasing cargo volumes in the future? Definitely our cargo volumes are in dependency of Estonian export-import. That means the global economy situation. We see at least already we have seen in March increase of Ro-Ro. That means that we see the small increase of Estonian export. That's definitely a positive trend. We working heavily with corridors. As I mentioned, we are going to add a new corridor agreement with Lübeck and Hamburg ports. Plus we're working with shipping lines.
That's what we can do and of course that's not only good for the Port of Tallinn, but also for the Estonian eco-economy to introduce more export possibilities and export logistic possibilities and increases the competition among them.
Next question regarding the Botnica charter calendar this year. We can say that the first summer charter project agreement we already is signed and if everything goes well, the charter work starts in June this year and lasts up to 26 days. There are some projects under negotiation currently. We definitely aim to the level like of 2025 or even more. It was like 220 charter days or more for the full year. This is our target currently, and we working on it. Next question regarding the real estate development in Old City Harbour and about the cash flows.
In the 2nd of April this year, the city council adopted the detailed plans for the D-terminal surrounding area and Terminal A area. During the summer, the city government should arrange the public displays and after that, they are probably, in the beginning of autumn, ready to finally impose the development plans for those two areas. After that, we plan to come out with the tenders. It means that positive cashflow should be in coming years, not in 2026.
Are there any new developments regarding Kazakh grain? Yes, there was one important event. The big delegation, high-level delegation visited Muuga Harbour. There was also president of the company. It's the state-owned company from Kazakh, with whom we signed the agreement. They studied the possibilities of our grain terminal and the port. I would say it went very successfully, but no cargo yet.
Now questions from Teams. Have your income or yield expectations from new Paldiski quay now lower than during original investment decision? No. The expectations and the targets level are similar as in initial projects. Would adjusted EBITDA be down also in quarter two year-on-year in the ferry segment due to the fuel costs? Actually not, because the indexation model in this contract foresees that the revenues are indexed based on the date of previous quarter.
In the second quarter, there should be some indexation already taken into account, so the revenues also are increasing. Because we don't have any extra consumption, there won't be any impact from the fuel in the second quarter, in case the fuel price remains stable.
Would it be possible to get an update on the planned investment for 2026 and also the expected positive government contribution to the investment? Our expected investment level is for this year, EUR 20 million-EUR 25 million altogether and, of course, there are always possibility to gain some EU money, but not governmental support. Does Botnica have any alternative contracts for autumn 2026? As Andrus already mentioned, there are some four, five negotiation project in a pipeline. We believe that this year will be longer period for Botnica as last year. That means, we are quite positive to gain some additional summer work or autumn work for the Botnica.
Thank you. Have you already seen the growth in cargo volumes in April, May, this year?
Yeah, as I mentioned, I can only say that we see some positive trends in Ro-Ro. Yeah, it's a little bit too early to comment other flows.
Okay. There was question also about the fuel cost compensations. This one we already commented. I update the questions. It seemed that all the questions we addressed. Thank you for the participation, and see you next time.
Thank you for listening and for your interest.