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, and Kristi Ojakäär, Chief Financial Officer.
Firstly, Aleksandr and Kristi will introduce the highlights of 2021, then the presenters will also speak about Tallinna Vesi's operational and financial results of the year. Aleksandr will also give an overview about some of the investments made in 2021 and planned investments for 2022 and beyond.
Right after the presentation, you will have the opportunity to ask questions. It is also possible to type in your question 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 it over to Aleksandr. Here you go.
Thank you, Laura. Hello, everyone. I'm happy to welcome you today here in our webinar. I hope you're all in good health as the number of people infected with the coronavirus increases every day. I'm also happy to share that we have increased investments in our fixed assets to secure sustainable infrastructure and continuity of its service.
Investments in pipes increased significantly already in 2021, when a total of nearly 16 km of water and sewage pipes were reconstructed. The volume of investments in fixed assets planned for 2022 amounts to EUR 25 million. In 2021, we set our focus to further digitalization of our processes. In order to improve customer satisfaction and collect information automatically, we have started installing smart meters at our customers. More about that on our upcoming slides.
Last year, we also took major steps to deliver an even more sustainable and environment-friendly service to customers. In 2021, we mapped our CO2 footprint. To reduce that, starting from the fourth quarter of last year, we use 100% of energy that is green and in the treatment process is now generated from renewable energy resources.
In 2021, our subsidiary, Watercom, achieved its highest turnover figure ever, also improving the profitability of services compared to 2020. The growth in revenue is mainly attributable to the pipe and road construction projects won in the procurements that were carried out in 2020 and 2021. As for other companies, also Tallinn Water, many of our costs increased in the fourth quarter of the year.
The main impact was caused by the increase in the market price of electricity, and that increase was for 139% compared to the fourth quarter of 2020. I will give an update on our operational performance during the fourth quarter as well, which was also covered in the TSE release last Wednesday.
We achieved good operational results again in the fourth quarter and during the last 12 months. The quality of drinking water in Tallinn remains really high. Water samples taken from customer taps during 2021 were 99.6% compliant with all requirements. We took a total of 3,058 water samples from customer's taps last year, and only 12 of those did not meet the requirements.
Wastewater treated at the Paljassaare Wastewater Treatment Plant also maintains a high level of quality, being again fully compliant with all the set requirements last year. The exceptionally low levels of nitrogen and phosphorus in the effluent discharge into the sea is a proof of excellent level of treated effluent. Our goal is to deliver high quality service to our customers, and in 2021, our customer satisfaction was the same as in 2020.
To maintain customer satisfaction, we have set ourselves clear and forward-looking targets. We have seen a gradual decline in number of customer complaints year-on-year, which is a positive trend and serves an indicator of stable improvement in the quality of service we provide. In 12 months, the number of customer complaints has decreased 22.5% compared to last year.
The leakage rate in the fourth quarter of 2021, and also during 2021, has shown an increase compared to 2020. This was mainly caused by a larger number of hidden leaks, which took longer to detect, and by exceptional weather conditions during the year. We always try to disturb our customers as little as possible. In 2021, the average water disruption per property lasted three hours and 19 minutes.
In terms of ensuring the reliability of water supply service to our customers, in 2021, we have reconstructed 8,337 meters of water pipelines and 7,667 meters of sewers. In more detail about our investments in our assets on the next slide. We constantly put in effort to improve our service.
In 2021, we carried out investments project in the amount of EUR 15.38 million. In 2021, we made investments in the network to ensure uninterrupted service and reliability of water supply to consumers, such as reconstructing water pipes and sewers. We renovated a little bit more than 8 km of water pipes and approximately 7.5 km of sewers, which is 7.5 km more pipes than in 2020.
We have done the reconstruction works in Kadaka boiler road on the street of Poska, Sirbi and Erika streets, and in Mustamäe Kadaka and Mustakivi roads. We also make constant investment into our water and wastewater treatment plants. One of our biggest investments for the water treatment plant in 2021 was the renovation of Ülemiste pumping station, which is an important part of the water network.
The pumping station pumps drinking water to the larger amount of Tallinners and nearby municipalities by increasing the pressure in the pipeline. We also did the reconstruction of filters at water treatment plant. If we speak about wastewater treatment plant, then in 2021 we finished one of the largest projects of a decade, reconstructing mechanical treatment stage of Paljassaare wastewater treatment plant.
The investment allows us to remove 20% more grit from the treatment process and thereby keep the quality of a treated effluent discharge to the sea at an excellent level to keep the Baltic Sea cleaner and to ensure reliable and efficient wastewater treatment for Tallinners. In addition to this major project, a number of other investments were carried out, such as installation of a new pump in the main pumping station.
There are also some projects ongoing, such as civil reconstruction works at the main pumping station and the reconstruction of a shore well second stage. Our capital investments into the network ensure uninterrupted water and wastewater service and reliability of water supply to consumers also in the future. In addition to the investment projects ongoing in 2021, we have also started or will start shortly with other large-scale projects.
As mentioned earlier, we will increase our investments in our fixed assets. The investments made and forthcoming will help us to secure high-quality drinking water for the people of Tallinn, but also keep the natural environment around us cleaner. Installing a smart meter reader to every customer by 2026 is one of our biggest objectives. To provide additional value to customers through digitalization, the company started installing smart meters to our customers already in Q4 2021.
With smart meters, water metering becomes more accurate, and there is no longer need for reporting the water meter readings. In the future, we'll be able to proactively inform customers about water leaks. This will be an extra service that we'll provide to our customers. Also, new meters will allow to notify our customers when water leaks occur in their buildings.
Our plan is to cover the entire service area with remote water meters by 2026, as I mentioned before. We also contribute to reduce CO2 that's produced by our activity. A cogeneration unit will allow us to use our produced biogas more efficiently.
Our plan is to install a unit to wastewater treatment plant during 2022 that will allow us to generate 30% of electricity we use at the wastewater treatment plant and will cover 100% of heating energy we use at Paljassaare. Over the next years, the investments will be planned based on the public water supply and sewage development plan for the next 12 years.
That will be completed in cooperation with the city of Tallinn this year. Also at the moment, Tallinn Water, together with, Tallinn University of Technology, develops the plan for reconstruction of, water and wastewater pipelines for the future. To finance these investments, we plan to use additional loan capital and continue with the established dividend policy.
Kristi Ojakäär will go into details that are, connected with the finance. Using the opportunity, I would like to thank Kristi for her job done in Tallinn Water during the last years. As you all saw, there was yesterday the information about Kristi's leave from Tallinn Water in March. Thank you.
Thank you, Aleksandr. With the following, I would like to give you the overview of the financial performance of Tallinna Vesi in the last quarter of 2021. Compared to the fourth quarter in 2020, the total sales revenues increased by 13.4%, amounting to EUR 14.9 million. The sales of water services increased by 2.1% or EUR 0.2 million, and the construction services increased by nearly 111% or EUR 1.4 million.
The gross profit for the fourth quarter in 2021 was EUR 4.8 million, which was lower by 14% or EUR 1.2 million compared to the same period in 2020. The gross profit was mainly impacted by higher cost of goods and services sold. The most significant impact comes from increase of energy prices in the fourth quarter.
And as well by maintaining the provision of third-party claims on the last quarter's level, resulting in negative impact on the fourth quarter results amounting to EUR 1.2 million. Compared to the fourth quarter in 2020, the net profit of the company was EUR 2.2 million lower, caused by changes named before. Now, looking into the revenues and expenses in more detail.
The total sales revenues for the fourth quarter increased by 2.5%, amounting to EUR 13.6 million. Total revenues from water services were 2.1% or EUR 0.25 million higher than in the fourth quarter of 2020, amounting to EUR 11.9 million. The increase in water services revenues were mainly driven by higher storm water treatment and the disposal services revenues.
The private customers' revenues in main service area decreased compared to the same period in 2020 by 1.8% to EUR 5 million. The commercial customers' revenues in main service area increased compared to the same period in 2020 by 1.5% to EUR 3.9 million, driven by increase in consumption in entertainment facilities. Outside service area revenues increased by 5%, amounting to EUR 1.4 million. The change was mainly driven by higher consumption of wastewater service.
Storm water revenues from the main service area were higher by 23.7%, amounting to EUR 1.3 million, driven mainly by 21% higher storm water volumes. The revenues from construction services showed an increase of nearly 111% or EUR 1.45 million compared to the fourth quarter of 2020, and amounted to EUR 2.8 million. The increase was related to higher pipe and the road construction services revenues achieved due to tenders won on the market in Tallinn and surrounding municipalities.
This now takes us to the costs. The total cost of goods sold increased by 34.4% or 2.6 million euros in fourth quarter of 2021, amounting to EUR 10.1 million. The total direct production cost increased by 74.2% or EUR 1.2 million, mostly due to higher electricity cost, accompanied by increase in pollution tax and chemicals costs.
Electricity cost increased by 139%, mainly due to higher electricity price. Chemicals cost increased by 22.2%, driven mainly by higher price of methanol. Pollution tax expense increased by 50% due to higher load of nitrogen and BOD7 in the wastewater. Construction services cost increased in line with the revenues by 109% to EUR 2.2 million.
Other net income and expense amounted to a net outcome of EUR 0.2 million compared to the net income of EUR 1.2 million in the last quarter of 2020. As it was mentioned, it is related to maintaining the provision for possible third-party claims at the level of the end of the last quarter.
Now, taking a look into the cash flows. As of the end of the year 2021, the company's cash balance stood at EUR 36.6 million, forming 14.3% of the total assets. Compared to the end of last quarter, the cash balance has increased by half a million EUR as a result of higher contribution from main operations.
During 12 months of 2021, total operating cash flow amounted to EUR 22.5 million, and the company's collection of receivables continues to be very high, being at 99.7% on average. The net cash flows from investing activities during the 12 months of 2021 resulted in a cash outflow of EUR 10.8 million, which is EUR 2.8 million less than in the same period of last year.
Investments into fixed assets were EUR 15.6 million, and the compensations received for the construction of pipes and connection points were EUR 2.9 million. The company's financing cash outflow during the 12 months of 2021 were EUR 19.6 million compared to the last year same period. Cash outflows decreased by EUR 9.6 million, mainly related to lower dividend and interest payments.
Thank you, Aleksandr and Kristi, for the overview. 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. Please feel free to type in your questions. Thank you for the questions. We will start with questions from Max Ripshin. The first question is: Did the company file for permission to increase tariffs with relevant authorities? Kristiina?
Our tariffs. Thank you for the questions. The tariffs have been approved in 2019 by the Competition Authority, and we have not filed any further applications.
Thank you. The next question is: Is it possible to increase tariffs for non-regulated activities like construction or for business customers? Aleksandr?
Thank you for the question. If we think about the construction business, then this is non-regulated business, and we usually participate in different procurements. Our subsidiary, Watercom, should look at the market, and we try to offer to our customers the prices what's suitable to them, so we can win the construction sites and can construct them as well.
We do our best, and our last year results show that we are on trend. Regarding the business customer tariffs, then all customers pay for their water and sewage services according to the tariff that is approved by the competition authority. Without competition authority, we cannot change the tariffs.
Thank you. Another question: When is it reasonable to expect an increase in tariffs? Any chance to increase in 2022 already? Kristiina?
Thank you. Please let us explain that the regulated tariff is a combination of different factors, like regulated asset base, cost of the capital, operating and fixed costs, water services consumption and so on. We can ensure that the relevant factors are closely monitored and managed, and as soon as it is feasible for the company to go for a tariff application, we will inform investors accordingly.
Thank you. How does increase in cost of electricity and raw materials impacting your bottom line?
I believe that to this question, we already answered in the overview we gave, just couple of minutes ago.
Mm-hmm. Thank you. Then we have three questions sent in during the webinar, and these are from Sander Danil. The first one is: Why you decided to freeze the reversal of provisions for potential third-party claims? Do you see higher risks related to pending court cases? Kristiina?
The answer here would be that we don't see any higher risk in the pending court cases. It is rather the accumulated amount of the cases which has driven the accounting estimates. There is no increased risk in our assumptions.
Thank you. Another question, is the company fully operates on exchange based electricity prices with no portion fixed? Kristi?
At the moment, yes, it is true that we have not fixed the prices due to the fact that the pricing offers made throughout the last year were not competitive enough to fix. As soon as there is a reasonable moment to go for the fixed price, we will consider it.
Thank you for the answer. The third question, can you name some of the larger construction projects that drove fourth quarter revenues from construction services, and what is the outlook for 2022? Aleksandr?
Well, if we speak about the construction services, then, as mentioned before, our subsidiary doing a very good job. If we speak about last year and Q4 then, such a big sites as Padise and Haabneeme, pipeline construction was completed by Watercom.
Also, a lot of work was done in the city of Tallinn, where we constructed the roads. If we speak about 2022, then at the moment it's also looking very positive and at the moment we prepare ourself to start construction in Pääsküla. This is a big construction site and the cost of that project is approximately EUR 600,000.
Mm-hmm.
Thank you.
Thank you for the answer. We will give you two more minutes to type in your questions. We have one more question from Sander Danil, and it is: when we could expect a dividend proposal for this year? Aleksandr?
First quarter results will be discussed in Supervisory Council on 28th of April, and after that there will be the proposal.
Thank you. Thank you, Aleksandr and Kristi, and thank you all for sending in your questions. Seems like we don't have any more questions, so the recording of the presentation will be available in the Nasdaq Tallinn YouTube channel webinar playlist shortly. Presentation materials and reports can be found on Tallinna Vesi webpage. Thank you for the overview, and thank you all for joining. Have a good day.