Hello, ladies and gentlemen, thank you for joining. I am [Dream Merma], and I welcome you for today's Tallinna Vesi webinar. This webinar will be hosted by Aleksandr Timofejev, CEO, and Taavi Gröön, Chief Financial Officer. First, Aleksandr Timofejev and Taavi Gröön will introduce the highlights of the fourth quarter of 2023. The presenters will also speak about Tallinna Vesi's operational and financial results of the first four months, of the first of the last 12 months. Aleksandr will give an overview about the sum of investments made in the fourth quarter. Right after the presentation, you will have the opportunity to ask questions. It is also possible to type in your questions during the presentation, but these will be answered in the end part of the webinar. To submit your questions, please use the question box on the right side of the screen.
Now, I will hand over to Aleksandr and Taavi. There you go.
Good morning, everyone. Welcome to our webinar. Our results were very good, and if we speak about the financial and operational results of fourth quarter, then I can confirm that these were excellent. Me and Taavi will cover the details during the presentation. In the fourth quarter, the group's total sales were EUR 15.52 million, showing a decrease of 3.1% or EUR 0.5 million year-on-year. The group's net profit for the fourth quarter was EUR 2.998 million, being EUR 0.62 million higher than for the comparable period in 2022. In the 12 months of 2023, the group invested into fixed assets almost EUR 35 million.
In the fourth quarter, we took part in the Sustainability Festival Impact Day and opened the doors of our water treatment plant to the public as part of the architectural event, Open House Tallinn. In 2023, we continued to maintain water pipes using the air scouring technique, and at the beginning of the year, we also introduced ice pigging technique for cleaning water pipes. Using this technique, we cleaned 141 kilometers of water mains during 12 months. By the end of the fourth quarter of 2023, we had installed smart meters to 40.6% of our customers. The main advantage of smart meters is the speed and accuracy of data transmission, as well as the security and reliability. Let's go to the investments.
If we speak about the investments into the network, then by the end of the fourth quarter, we have reconstructed more than 27 km of pipes. The largest reconstruction works in 2023 were carried out in Iia and Pronksi Streets, Vana-Kalamaja Street, Vilde and Akadeemia Roads, Kukruse and Vapruse Streets, Pärna, Reinvaldi, and Kuhlbarsi Streets, Tehnika, Magasini, and Punane Streets, and on Smuuli Road. In the fourth quarter, the reconstruction work on the supply pipeline for the Lasnamäe booster pumping station at the intersection of Punane and Smuuli Streets was completed, significantly increasing the security of supply in the area. Works were also completed on the large-scale chain house project, with individual supply points being built for the apartment buildings in Lasnamäe and Mustamäe areas. The rehabilitation of the sewage pipeline in Mustamäe, using trenchless technique, was completed.
We invested a lot also into water and wastewater treatment plants. The major projects carried out at the treatment plant in 2023 included the reconstruction of digesters and the installation of the cogeneration plant at the wastewater treatment plant. The reconstruction of the filters of the B house and the reconstruction of the clarifiers of the A house at the water treatment plant was completed. The first phase of the reconstruction of digesters has been successfully completed, with the first of the two digesters being reconstructed, and almost all components being replaced. Our work will continue in this year as well. The installation of the cogeneration plant was completed towards the end of 2023, and while electricity and heat production have already started, finishing works and tests are still ongoing until the plant becomes fully operational.
The operational results of the fourth quarter were very good. We continued to provide reliable water and wastewater services in the fourth quarter, as reflected by the steadily high level of the quality indicators. During 12 months, in the fourth quarter of this year, the quality of the tap water was excellent, meeting 99.9% of all quality requirements. Clean tap water has been ensured by the efficient water treatment process, regular monitoring, and ongoing preventative maintenance work on the water network. In 12 months of 2023, wastewater treated at the wastewater treatment plant at Paljassaare met all the established requirements. Pollutant parameters that are significantly lower than the limits required by the law is the proof of the excellent level of treated effluent.
In 2023, we have taken 800 tons of debris, 203 tons of grit, 1,835 tons of nitrogen, and almost 250 tons of phosphorus out from the wastewater. The customer satisfaction in the fourth quarter was at 4.0 points out of five, and at 3.9 points for 2023 in average. In order to increase customer satisfaction, we have made several changes in the work organization. The level of water loss in the water network has remained low in the fourth quarter of the year, being at 11.35%, remaining also lower than in the same period last year. In 2023, the leakage rate was 12.93% compared to 16% last year.
Tallinn Water notified almost all customers affected by an interruption at least one hour in advance. We can say that, our best result, for last year is 99.9%. The duration of the water interruption in the fourth quarter was 2 hours and 52 minutes. That is eight minutes less than during the same period last year. As for the 12 months of the year, the average duration of water interruption was 15 minutes shorter than the same period last year. To reduce the inconvenience caused by the water interruptions, we continue installing additional isolation valves on the network. By the end of the fourth quarter of 2023, we had reconstructed more than 27 km of networks. That will keep our results in a good shape. Now, I will hand over to Taavi. Thank you.
Thank you, Aleksandr. I will now share some comments on our financial performance in the fourth quarter. But before that, just a quick comment on the latest economic forecast from Eesti Pank. The recession in Estonian economy is expected to last for longer than previously thought, mainly because of Estonia's export markets are in relatively poor position and competitiveness has been lost. The forecast expects that the Estonian economy to shrink slightly in 2024, but growth is expected to recover from 2025. The shrinking economy will see unemployment rise a little next year, so people's purchasing power is expected to improve as inflation is backing off.
This deceleration in price increase directly also affects the company's profitability, and has contributed to recovery during last year when comparing the conditions in 2022. The gross profit for last quarter in 2023 was EUR 5.9 million, recovery by 31% compared to the same period last year. The operating profit in Q4 was EUR 4.1 million, recovering EUR 1.3 million compared to 2022. The net profit of the company in Q4 amounted to EUR 3 million, which is EUR 0.6 million above the same period in 2022.
Recovery is primarily impacted by a decrease in cost of goods and services sold, where electricity cost has the most notable impact, and which is partly set back by higher administrative and marketing expenses. But the bottom line was also impacted by increase in the interest expenses. Now, moving on to changes in revenue expenses in a bit more detail. The total sales revenues for the fourth quarter of 2023 decreased by 3.1%, amounting to EUR 15.5 million. The decline in overall sales is attributed to a reduction in revenue from construction services, whereas revenue from water services witnessed a 4% increase. Water services constitute 90% of total sales.
Private customers' revenues in main service area increased compared to the same period in 2022 by 2.4% to EUR 6.2 million, and were primarily driven by higher consumption. Business customers' revenues in main service area compared to the same period by 7.5%, also impacted by higher consumption. As the price increase affected in Q4 2022 had already full impact on revenues, the changes are relatable to higher consumptions. Now, moving on to cost. Total cost of goods sold amounted to EUR 9.6 million in fourth quarter of 2023, being lower by EUR 1.9 million compared to the equivalent period in 2022.
The changes were influenced by lower direct production cost, particularly by lower electricity cost.... Total direct production cost amounted to EUR 2.95 million, showing a 22% or EUR 0.8 million decrease compared to the equivalent period in 2022. Salary costs have increased roughly 17% to EUR 2.6 million due to annual adjustment, annual salary adjustment, which was performed in Q1, and new hirings also for vacant positions and new positions. Depreciation increased by 14%, and it's related to higher investment volumes in 2023. In the fourth quarter of 2023, construction service costs have decreased by almost 54% or EUR 1 million, related directly to lower construction revenue.
Shifting focus from overall cost of goods sold to the administrative marketing expenses, expense outline outlined in report note 9 indicate the rise of 16.7%, equivalent to EUR 0.23 million in comparison comparison of the fourth quarter of 2022, rising in total by EUR 1.6 million. This increase is primarily attributed to elevated salary expenses and rise in external procured professional services. Next, let's take a look at the cash flows. As of thirty-first of December 2023, the cash balance stood at EUR 14.7 million, forming roughly 5% of total assets. Compared to the end of last year, the cash balance has increased by EUR 2 million. The biggest contribution of the cash flows comes from main operations.
During 2023, the total operating cash flow amounted to EUR 24.5 million, which is EUR 9.5 million higher than in the comparative period of last year, and reflects the recovery aspects mentioned earlier. The net cash flows from investing activities during 2023 result in a cash outflow of EUR 26.2 million, which is 7.1 million euros more than in the same period last year. The company's net cash flows from financing activities during 2023 resulted in cash inflow of EUR 3.8 million, which is EUR 23.7 million more than in the same period last year, and is related to additional financing acquired for the investments performed and ongoing investments in 2023.
Finally, let's take a quick look at the full year of 2023. On gross profit level, the full year gross profit for the full year in 2023 was EUR 24.1 million, recovering by 42% compared to the same period last year, well, compared to 2022. The gross profit recovery was primarily driven by increase in revenue, the price adjustment that occurred in October 2022, and had a full year impact in 2023. Operating profit was 17.4 million euros, EUR 6 million higher than in the same period. The recovery in gross profit was partly set back by higher administrative and marketing expenses. Administrative marketing expenses increased one million compared to 2022, amounting to EUR 6 million.
The change is mainly due to salary costs adjustments and higher salary costs. Beyond changes in operating profit, the bottom line, of course, was impacted by increase in interest expenses, but also lower income tax costs compared to 2022. The net profit for the year amounts to EUR 12.8 million, which is EUR 4.4 million above the same period in 2022. This concludes my short overview, and thank you very much for your time.
Okay, thank you both for the presentation. Now we will proceed with the questions. You will have now a few minutes to submit your question. Please feel free to type in any questions you might have. Seems like we don't have questions. A recording of the presentation will be available in the Tallinna Vesi's YouTube channel webinar playlist shortly. Presentation materials and reports can be found on Tallinna Vesi's webinars. Very great introduction. Thank you for the overview, and thank you all for joining. Have a good day.