My name is Valdo Kalm, Andrus Ait is our Chief Financial Officer.
Good morning.
As usually, we would like to start with overall comments and events on Q2. In Q2, we had increase of revenue 5.4%, that's mainly due to the good start from our offshore ship, Botnica, also we had a nice growth at start of cruise season. We got 30% more cruise ships than last year and 40% more passengers. Although at the same time, we had quite a big influence from heavy winter. That means that by the end of Q1, it was quite a tough situation with ice. We got some extra cost from our daughter companies, TS Laevad, also from the shipping, therefore our profitability went down due to that, but it's more one time issue.
Also on Q2 results of the last year, we had positive influence by one of profit of EUR 1 million sales of land on Muuga to Rail Baltic. Therefore, there was also such a one time positive issue or topic from last year and influenced it negatively this year. The main events from Q2, we had quite stable passenger flows but decrease in cargo at 2.3%. We had annual general meeting, we distributed the dividends as we promised. Very important was the adoption of two detailed plans by Tallinn City Council. That's a really important start for our real estate business, as we promised. We will try to start by the end of this year with the first plot and the first tender. Let's see. We have to also agreed some details with city government, but we are really on a very end of the process.
Botnica had quite a early job in North Sea. It went well. Then we signed additional trips for the regular summer job with the minister. Also went well. Regular did good job. We signed loan agreement with OP Bank, not using yet the credit line, but agreement is signed. Already many years, we are ranked among the most reputable employers in Estonia, and this time we got the highest ranking on a fifth position together with other important companies and famous brands, also on retail banks and other retail brands. Trends in Q2. As I mentioned, passenger business little bit decreased, but we had very good start of cruise and there was 40% more passengers, therefore there is increase of revenue 5%. On cargo side, we had 2% decrease.
Our main and most important segment, ro-ro, and the biggest segment, of course, had basically similar level as last year and even increase with six months. We had still decrease from liquid bulk. Altogether then there is revenue decrease 2.7%. Ferry business shows very stable or even increasing numbers, revenues in number of passenger vehicles and trips. As we mentioned then, Botnica offshore ship had doubled the charter days from last year. There are more precise numbers on passengers, also on cargo, as I mentioned. It is important to keep our biggest group, ro-ro, stable or even in six months we have had increase. Let's see how we will continue on a second half. It depends, of course, in economy, in export. There are some positive trends on export, therefore we would like to see there's still growth in ro-ro and probably in containers.
Shipping volumes on our ferry segment are very stable. Botnica showed good utilization rate in Q2. Therefore, you see the growth on six-month period compared with the last year. Future outlook. It's quite similar as we showed you last quarter. We hope it will be a good season and year for the cruise. There are already 30% more vessels and 40% more passengers. We see good bookings by the end of the year. We are continuously working with new ro-ro and container lines, specifically for Paldiski because now we have new quay. Before we had a lack of resources in Paldiski. Now we have excellent conditions there. Therefore, we're negotiating with two companies for Paldiski and Muuga. Maybe there will be some good news by the end of the year.
We signed, in Q2 also, a contract with Lübeck and Hamburg ports to develop our existing customer base and cargo volumes because we have the same container lines entering to our ports. We see there are growth possibilities. It's very concrete with Lübeck. Also with Hamburg, we have three, four very concrete points and cooperation activities to achieve. There is ongoing industrial park campaign for Muuga development area, which is around 20 hectares. We have one quite concrete negotiation in the middle of that that we can't comment. We're talking about industry with good flows of vessels or cargo. It's really too early to comment. Maybe we'll have certain news also by the end of the year. As mentioned, there is ongoing cooperation for real estate business or tender. It's all about efficiency.
We are working on that, on process side. If we follow our personnel numbers, we will manage to decrease it by six months also. I would like to give the floor now to Andrus to comment our financials.
Thank you, Valdo. These are the financial results for the second quarter and six months period. Financial results were impacted, like already explained, by fewer cargo volumes, less vessel calls in total. At the same time, we had higher fuel cost for ferries and electricity cost as well. Also last year, in the second quarter, we had some one-off positive effects, which I explain later. From positive side, there were some offsetting effects from the Botnica activities and also from higher number of cruise ship calls. Revenue increased by 5.4% to EUR 31.1 million. The growth here is explained by the higher number of charter days of Botnica. There were 20 extra days compared to the last year same period. Vessel calls also increased because of higher number of cruise ship calls.
We also increased the vessel to tariffs, which came into effect starting from April. This had also some effect. There was increase also in sale of electricity and sale of ferry services as well. Adjusted EBITDA fell by almost 11%, down to EUR 14.2 million. Decline here is caused by higher fuel costs of ferries because of the higher price level. Also, electricity costs were higher, but these costs were covered by higher revenues. EBITDA level, there was effect from electricity costs. We also made more repair and maintenance work. Partially, it was connected with the ferry segment, the ferry operations in the first quarter where we had tough ice conditions. This impacted also Botnica technical conditions, so we had to make there also some extraordinary repairs.
Partially, the higher repair costs were caused because of the fact that more repair works just concentrated on the second quarter. EBITDA margin fell by 8.1%- 46.7%. Operating profit also declined by 20% to EUR 7.9 million. The decline here was a bit higher than on EBIT level, because we had higher amortization costs, because we commissioned the new quay in Paldiski, but also we had some one-off write-offs in the second quarter, which were made in connection with the repair works of the ferries. Income tax was at the same level as year before, as we paid out dividends EUR 19.2 million like last year, there wasn't any amendment in tax regulation, there was then change. Profit for the period decreased by 60% to the level for EUR 1.4 million. The decline here is a bit lower than operating profit growth in euros.
That's because our interest payments were a bit lower than financial costs, as the outstanding amount of debt decreased. We invested EUR 2.3 million in the second quarter. The main investment was the replacement or renewal of the main engine of one of our ferries. This was regular work. After a certain number of operating hours, we have to exchange the engines, and this was the main investment. We also reinforced one quay in Muuga Harbour to install the onshore power supply for the container ships. Last year, we had the ongoing investment, the construction of Paldiski South Harbour new quay. This year, we didn't have such kind of bigger investment, therefore, this explains the drop in investments.
Six months period, the numbers are quite similar, but there were some extra one-off effects as we got insurance indemnity for Botnica repair works, which we carried out in 2024. These receipts or payments were in first quarter 2025. This year, we didn't have this impact. Last year, we also sold land in Muuga Harbour. This also impacted the adjusted EBIT. This impact was in the second quarter, but also in six-month period. Also, last year, we received some payments for the debt, which we have considered uncollectible, therefore, there was a lower cost level in 2025. In first quarter, in addition, the fuel costs of ferries were impacted by severe ice conditions, the consumption from that was also higher. Profit for the six-month period was EUR 6 million. Decline here was 41.7%, and we invested EUR 3.5 million.
In the first quarter, we proceeded to design the new A-terminal and made also some IT investments. When we look at the results by segment-wise , we see that in the second quarter, revenue increased in three of four segments. The decline was in cargo harbors. In other segments, there were growths. EBIT increased in segment Other, was stable in passenger harbors, and declined in cargo harbors and ferry segment. In passenger harbors, revenue increased mainly due to the cruise ship calls, and also due to the higher tariffs of vessel dues, which came into effect starting from April. Actually, all the revenue streams in passenger harbors increased except sale of other services, as the revenue from advertising activities decreased. The EBIT in passenger harbors remains stable.
We had some elevated level of repair works there as we repaired the cruise ship quays, and that this was reasonable to do before the summer, where we have the peak of cruise ship calls. Therefore, the repair work is more concentrated to the second quarter. In cargo harbors, revenue declined. This is mainly attributable to the fact that the Tallink vessel Superfast didn't operate anymore on Paldiski-Kapellskär route after the first decade of April. Due to that, the vessel use decreased. We had also less cargo, and cargo charges also decreased. On EBIT level, there was a higher drop. To explain that, last year, we sold the land in Muuga Harbour, and from that we had positive impact in amount of EUR 900,000. In addition to that, we were able to recover some receivable, estimated uncollectible. This impact was for about EUR 400,000.
This was in 2025, this year we did not have any positive one-offs in cargo harbors. In ferry segment, revenue increased because of indexation based on the fuel price in the first quarter, but increase in costs was higher. Because of that, the EBIT decreased. It's important to explain that the indexation in ferry revenues. Some of the indexation is based on the fuel price index. In the first quarter this year, the price started to increase in March, so the average price for the first quarter was not so high. It means that the revenues in second quarter was not indexed based on the first quarter average price. It was indexed on that, but the cost was already higher throughout the entire quarter, so the indexation did not cover the higher costs fully.
In coming quarters, the indexation effect on revenues should be a bit higher than in the second quarter. In segment other, revenues increased because of longer charter period and EBIT also increased, but a bit less because personnel expenses increased. As the ship is chartered out, then we have a elevated level of personnel expenses and also we made some repair works after the tough ice-breaking season in the first quarter this year. On six-month period, the revenue increased in three segments, like in the second quarter. The additional impacts were in segment other on EBIT level. The EBIT decreased in six months period because of the insurance indemnity last year, which we did not have this year. This impact was EUR 100,000. In ferry segment, the EBIT was impacted by severe ice conditions, which increased the consumption of the fuel.
Also we had less cargo due to the ice conditions as well. This impact was also in cargo harbors. In cash flow side, we see that the cash from operating activities decreased by EUR 8 million because of the sale of services decreased and the payments to the suppliers increased. The sale of services increased partially due to the fact that in the first quarter of 2025, we received payment for the charter of Botnica, which was carried out in the fourth quarter of 2024. This year, we did not have this kind of receipt, therefore, there was some decline from one-off impact as well. Payment to the suppliers increased mainly because of fuel costs. Cash used in investing activities was - EUR 400,000.
This includes the investments, but we also received grant money from EU fund, which supports our investments where we construct the onshore power supply for our berth quays. The number of 2025 was close to EUR 20 million. To explain that, we had bank deposits ended during the first six months and therefore we had positive effect, and we had also sale of land in Muuga Harbor. The free cash flow was EUR 17.7 million, and cash used in financing activities was quite similar as the year before. This includes the dividend payout and interest payments were lower than last year a bit. Net cash flow was - EUR 4.4 million, and net debt was quite similar as at the end of 6 months 2025, for EUR 145 million. The cash in bank accounts decreased by some EUR 20 million and also outstanding loan decreased in the same.
On financial position, cash and bank accounts decreased compared to the year in period last year, and this reflects the negative cash flow, - EUR 4 million. The non-current assets decreased because of the fact that amortization and depreciation increased investments. It was higher than investments. Other current assets increased as we got funding from EU funds, and equity was impacted by dividend payout and profit for the period, and debt was quite similar as at the end of 2025. In the first half of the year, the loan repayments are quite low and the higher loan repayments will be made in the second quarter. With that, we conclude our presentation. Like always, there are some slides about revenue and EBITDA generation. We will make a short break and you can send us questions and we will back in a couple of minutes to answer the questions.
Thank you. We are back. Thank you for your questions. I take the first question about the investments and is the investment level of EUR 2.3 million a good indicator? For maintenance investments, which are yearly for about EUR 9 million- EUR 10 million. Yes, based on the historical data, the average level of maintenance investments is about EUR 10 million. This year, we also expect some development investments when we start to build the onshore power supply for the Kruusi Quay in Old City Harbour. There has been some delays because of tenders. We see that the annual investment level for the group should be for about 20 or a bit less, EUR 20 million. The next question, how much of the operating expenses increase of 19% in Q2 year-on-year was one-off related c osts?
It's tricky to estimate because it's hard to say that whether the fuel costs are one-off or not. I would say that some 5% of that was related to one-off effects. It's like rough estimate, which is related to the repair works and other one-off costs. Some 5% of that was related to one-offs.
Could we see a new major tenant in Paldiski quay at 2026? Yeah. There are two lines that you have the new operator or player on this quay. One is, of course, onshore and offshore wind farms operators, or it's a new regular shipping operator. We are pushing towards both lines, and it's possible that we have some decision or contracts by the end of the year, but it's more likely that it happens from next year. Is there risk that rents from new quay in Paldiski do not offer required yield for investment capital in the future? We don't see yet the risk, because if we planned or we made a business plan and investment decisions for this quay, then it was quite logical that we will start with a smaller project as we had this year. There are bigger revenues planned for 2028.
Not the big risk, as we already mentioned. There are a lot of regular needs for bigger capacity also. That was lack of resources in Paldiski, therefore, I don't see big risk yet.
How much you receive revenues by sale of electricity in annual level? How much it contributed to the initial growth in Q2 year-on-year? Sale of electricity, there was increase, EUR 200,000 in revenues, the impact was on cost side similar. As the consumption in first quarter was higher than on six-month period, the sale of electricity increased by almost EUR 700,000. This revenue stream depend on the electricity price, which is very hard to estimate or forecast, and part of the growth was also attributable to the higher tariff rates for network. This is something which won't change.
I can't say the number by the end of the year, but if, let's say, the factors or indicators are similar as in the first half of the year, then the growth in the second half of the year should be a bit lower, because the consumption usually is the highest in the first quarter. In the fourth quarter, the consumption is a bit lower. The growth in total would be on level of EUR 1 million, but it's only in case when the prices remain stable and also the consumption.
All right. Thank you for your questions. Thank you for your attention, and see you next quarter.
See you in November.
Thank you.