Hello, ladies and gentlemen. Thank you for joining. I am Laura Korjus, the Head of Communications in Tallinna Vesi, and I welcome you all to today's Tallinna Vesi's webinar. This webinar will be hosted by Aleksandr Timofejev, Chief Executive Officer. On today's webinar, Aleksandr will do the presentation alone due to the fact that our new Chief Financial Officer, Taavi Gröön, will join the team on 23rd of May. Today, firstly, Aleksandr will introduce the highlights of the first quarter. He will also speak about Tallinna Vesi's operational and financial results of the first quarter of the year. Also, he will give a brief overview about some of the investments made in the first quarter of the year. 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. Now I will hand it over to Aleksandr. Here you go.
Good morning, everyone, happy to welcome you today here in our webinar. Here are some of the highlights from the first quarter of the year. Management board made a proposal to a supervisory council to pay dividends of EUR 0.65 per share from the 2021 profits. The company's supervisory council decided in its meeting held on 28th of April to make a proposal to annual general meeting to approve the payment. The payout is equal to 80% of earnings in 2021. Public water supply and sewage development plan for the next 12 years to regulate the development of the water sector in Tallinn will be developed soon. The public water supply and sewage development plan is under preparation by the City of Tallinn in cooperation with Tallinn Water and other Tallinn city water utilities.
The development plan provides the basis for creating a company's development and investment plan. In the first quarter of the year, sales to commercial customers within the service area increased by 17.9% to EUR 3.84 million, compared to the same period last year, driven by the higher consumption of water services. The sales to commercial customers were impacted by slight reduction of the pandemic-related restrictions as hotels and spas and, of course, entertainment facilities were open. The cost of energy, chemicals, construction materials, and construction services has increased by 2.3%. This was driven by higher electricity price, higher price of polymer and methanol used in the wastewater treatment process. There has also been an increase in the cost of our work resources.
The increase was mainly influenced by higher staff costs related to salary increase of every staff member of Tallinn Water according to the system that the company has. Moving on, I would also like to introduce you to Tallinna Vesi's new Chief Financial Officer, Taavi Gröön. Taavi will join the company on 23rd of May. Taavi has a long and diverse experience in financial management in various industries. Taavi was involved in a regulated business working in Adven Eesti. Since 2018, he has acted as a Chief Financial Officer of the North Estonia Medical Centre. Now we move on to the operational results, and I will give you an overview about first quarter. If we speak about water quality, then it was really, really high in first quarter of 2022.
Company took 842 water samples from the customer taps, and all the samples were according to the standards. If we speak about the wastewater treatment, then wastewater treated at the Paljassaare Wastewater Treatment Plant also maintains a high level of quality, being again fully compliant with all the set requirements. Customers are important for us as well, and our goal is to deliver high-quality service to our customers. In the last three months of the year, our customer satisfaction was really high. The result was 4.4 points of five, which is a very, very good result as well. The leakage rate was a little bit higher during the first quarter of 2022. This mainly caused by extraordinary weather conditions. Snow and ice disrupts our activities. By the end of March, leakage rate showed reduction.
We always try to disturb our customers as little as possible and do everything to supply our customers with water. In the first quarter, the average water disruption per property that was impacted by water interruption lasted 3 hours and 25 minutes, which is on a similar level as last year. Rehabilitation of the networks is really important. In terms of enhancing the reliability of water supply services to our customers, in the first three months, we have reconstructed about 6 m of water pipes and more than 2.6 km of sewers. In more detail about our investments in our assets on the next slide. We constantly put in effort to improve our vital service.
In the first three months of 2022, we carried out investment projects in the amount of EUR 2.78 million. Currently, we have made an agreement to renovate 17 km of networks. This year, networks will be renovated on Sõpruse puiestee, Tulika, Kotka, Silla and Luise streets, and also in the area of Astangu Street. In cooperation with Utilitas, pipes will be renovated on Kesk-Kalamaja, Uus Maailm, Vilepruuli and Turu streets. I would like also to speak about remote water meters. The project is moving according to the plan. The procurement of the water meters and software has successfully ended. Soon we can give more intel on the selected partner and next steps on the project. We also make constant investments into our water and wastewater treatment plants.
If we speak about drinking water and our Ülemiste water treatment plant, then at the moment we are renewing our filters, which are an important part of our water treatment process. Also, we are updating pumping station on Rummu Street and improving it with the possibility of secondary chlorination of Lasnamäe and Pirita areas. Wastewater treatment plant works well. Related to wastewater treatment process, we are doing reconstruction works in main feed pumping station shaft and effluent outlet tower, which are critical parts of a wastewater treatment process, mainly due to the fact that all the wastewater from our service area goes through these stages of the process. We are also renovating aeration tanks, which are an important part of the biological treatment process in which we remove nitrogen and phosphorus.
Our capital investments into the network ensure uninterrupted water and sewage services and reliability of water supply to customers in the future. Now I would like also to give you the overview of the financial performance of AS Tallinna Vesi in the first quarter of 2022. First of all, the latest economic forecast from Eesti Pank expects that the Estonian economy will grow strongly this year by over 9% in euros at current prices. The counter effect of inflation means real growth in the economy will probably be close to zero or even slightly negative. Although some sectors have not still recovered from COVID, the economy as a whole has clearly returned to its pre-crisis level. The recovery of economy has had a positive impact on Tallinn Water's financial results as well, reflecting a slight increase of revenues compared to the first quarter of 2021.
Important to say that high energy prices and inflation has direct impact on profit of the company. We are optimistic that the consumption will slightly increase this year and revert to pre-pandemic volumes in the long term. Compared to the first quarter in 2021, the total sales revenues increased by 2.3%, amounting to EUR 12.1 million. The sales of water services increased by 6.2% or EUR 0.7 million, and the construction services decreased by 52.2% or EUR 0.4 million. The gross profit for the first quarter in 2022 was EUR 4.4 million, which was lower by 15.4% or EUR 0.8 million compared to the same period last year.
The gross profit was mainly impacted by higher cost of goods and services sold, which was partly balanced by higher water services revenues. In the first quarter of 2022, the operating profit was EUR 3 million or EUR 1.7 million lower than in the same period last year, being mainly impacted by changes in the gross profit and plus the change in provision for the possible third-party claims in the first quarter in 2022, compared to the reduction in the provision in the amount of EUR 1.2 million in the comparable period last year. Compared to the first quarter in 2021, the net profit of the company was EUR 1.7 million lower, being mainly impacted by changes in the operating profit. On the next slide, I will comment on the changes in the revenues and expenses in more depth.
Total sales revenues for the first quarter in 2022 increased by 2.3%, amounting to EUR 12.1 million. Total revenues from water services were 6.2% or EUR 0.67 million higher than in the first quarter of 2021, amounting to EUR 11.5 million. The increase in water service revenues were mainly driven by higher stormwater treatment and disposal service revenues and commercial customers, and were partly balanced by decrease in private customers' consumption. The private customers' revenues in main service area decreased compared to the same period in 2021 by 4.1% to EUR 4.9 million.
The commercial customers' revenues in main service area increased compared to the same period last year by 17.9% to EUR 3.8 million, driven fully by increase in consumption. The sales to commercial customers were impacted by reduction of the pandemic-related restrictions as hotels and spas were open. Less people were working at home. In addition, the water consumption in hotels and rental services has increased due to accommodation of Ukraine refugees in March. Outside service area revenues increased by 4.8%, amounting to EUR 1.3 million, which was driven by changes in consumption of all services. Stormwater and fire hydrant services revenues from the main service area were higher by 34.6% amounting to EUR 1.2 million in the first quarter 2022. Driven mainly by 31% higher stormwater volumes.
The revenues from construction services showed a decrease of 52.2% or EUR 0.4 million compared to the first quarter in 2021, and amounted to EUR 0.4 million. The decrease was mainly related to lower volume of work orders and weather conditions in the first quarter of 2022 that made the construction works challenging. This now takes us to the costs. The total cost of goods sold increased by 16.2% or EUR 106,000 in the first quarter of 2022, amounting to EUR 7.7 million. Total direct production costs increased by 51% or EUR 959,000, mostly due to higher electricity costs, accompanied by an increase in the chemical costs.
Electricity costs increased by 91.4%, mainly due to an average 82% higher electricity price despite state compensation. Chemicals cost increased by 19.2%, driven mainly by an average 21% higher price of methanol used at the wastewater treatment plant. Construction services costs decreased by 52.1% and were related to lower construction service revenues mentioned earlier. Salary costs increased by 9.2% to EUR 2 million and were mainly affected by salary increase of every staff member according to a company's salary policy. Other costs of goods sold increased by 21.6% to EUR 1.1 million, mainly due to higher prices related to heating and gas costs. Administrative and market expenses decreased by 20.5% to EUR 1.3 million, driven by lower outsourced professional services cost balance, partly by higher salary costs.
Other net income and expenses amounted to net outcome of EUR 0.05 million compared to net income of EUR 1.15 million in comparative period. Being mainly driven from freezing the change of provision for the possible third-party claims mentioned earlier. Now it takes us to the cash flows. As of 31 March 2022, the company's cash balance stood at EUR 37.6 million, forming 14.6% of the total assets. Compared to the end of last quarter, the cash balance has increased by EUR 1 million, mainly as a result of lower financing activities related cash outflows, accompanied by lower contribution from main operations. The biggest contribution of the cash flows comes from the main operations. During the three months of 2022, total operating cash flow amounted to EUR 3.9 million.
The company's collection of receivables continued to be very high, being 99.7% on average. The net cash flows from investing activities during the three months of 2022 resulted a cash outflow of EUR 2.7 million, which is EUR 0.2 million more than in the same period last year. Investments into fixed assets were EUR 3.3 million, and the compensations received from the pipe construction were EUR 0.6 million. The company's financing cash outflows during the three months of 2022 were of EUR 0.2 million , being on the same level compared to the last year same period. Thank you.
Thank you, Aleksandr, for the presentation. Now we will proceed with the questions. We have some questions sent in already, but we will also give you some minutes to submit your questions now. Please feel free to type in any questions you might have. Thank you for the questions. We will proceed with these in the order they have been received. We have three questions related to tariffs, and these are, firstly from Max Rivshi, please update your plans to increase tariff for residential and separately for commercial customers. Second one from Andres Kokts, do you expect tariff revisions anytime soon due to inflation? Third one from Mihkel Gama, what kind of impact might have increased inflation on Tallinna Vesi's financial results on the next one to two years? What is the best and worst scenario for you?
Aleksandr, please.
Thank you for the questions. Our current private and commercial tariffs are valid from December 2019, and until new tariffs are approved by Competition Authority. Company has not started with the process of a new tariff application, and it's observing the changes in the prices and costs. Even if we would start with the process in the near future, then the approval process might take more time than a few months. Today, to give a better forecast regarding the tariff increase is very difficult.
Thank you. A question from Sander Danil. Do you expect a further recovery in commercial water consumption in the near term?
We are really optimistic that the consumption will slightly increase this year and revert to the pre-pandemic volumes in the longer term. If we speak about the first quarter, it is visible that it is much better than first quarter of 2021, and March was really good as well, but we still have space to go to the pre-pandemic situation.
Thank you. Another question from Sander Daniil. When we could expect some results regarding the ongoing court cases concerning the third-party claims?
If we speak about the third party claims, then the court proceedings are ongoing, and the final decision date cannot be predicted at all.
Thank you. We will give you one or two minutes more to type in your questions. Thank you. We have another question from Sander Danil . Will the relatively low construction volume in the first quarter reflect in higher activities in the coming quarters?
This is a very good question. If we speak about the construction market, then, definitely during the warmer period of spring and summer, the activity should be higher. We are expecting more work in the road construction. As it was mentioned before, the first quarter of the year was really cold, and it was quite difficult to plan any construction activities of the roads. Of course, the war in Ukraine and the COVID pandemic still create a lot of uncertainty for the customers. At the moment, we feel that more work is coming to the market. We try to participate in the tenders to win them.
We believe that, during the second and the third quarter, there will be more work regarding road construction where we can participate.
Thank you. Seems like we don't have any more 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 webpage. Aleksandr, thank you for the overview, and thank you all for joining. Have a good day and a nice weekend.
Thank you. Have a nice day.