Hello, ladies and gentlemen. Thank you for joining. I am Triin Veermäe, and I welcome you all to today's Tallinna Vesi's webinar. This webinar will be hosted by Aleksandr Timofejev, Chief Executive Officer, and Taavi Gröön, Chief Financial Officer. Firstly, Aleksandr and Taavi will introduce the highlights of the third quarter of 2026, and the presenters will also speak about Tallinna Vesi's operational and financial results of nine months. Aleksandr will give an overview about some of the investments made in the third quarter, and 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. I will hand over to Aleksandr and Taavi.
Good morning, everyone. Welcome to our presentation. The third quarter is over, and we can speak about the results. If we speak about Tallinna Vesi's financial results in the third quarter, then they were stable, and of course, the operational results were excellent. If we speak about the sales, then in the third quarter, the volume of sales was EUR 18.3 million, and the net profit, EUR 3.96 million. Tallinna Vesi continues to invest into the assets, as the continuity is very important for us and for our customers. During the third quarter, we invested EUR 16.4 million. If we speak about the water quality, then in the third quarter, 99.4% was the water quality in the city. If we speak about number of samples were taken in the city, it was over 700, and only three samples were not according to the limits.
If we speak about health and safety, then it is on a good level in the company, and during the third quarter, we had no working accidents. One of our focus is to produce also green energy from the biogas we produce at the wastewater treatment plant, and in the third quarter, we produced 2.8 GW h electrical energy at the wastewater treatment plant. This volume of energy approximately equal to 70% of electrical consumption at the wastewater treatment plant. The quality of the effluent was excellent, and it was 100%. One of the main projects for the customers is related to the smart meters.
We started to install five years ago to our customers, and by today, over 97% of our customers uses the smart meters, and by the end of the year, our aim is that over 99% of our customers have a smart meter at their locations. If we move on to the next slide, then it is important to speak about the investment projects and the main projects we have together with the city and other utilities. By today, we reconstructed approximately 30 km of pipeline during nine months, and of course, a lot of kilometers rebuilt using the no-dig trenchless method. It is important to use the trenchless method in the city, as this gives us an opportunity quicker finalize the projects, and the environmental impact is much smaller as well.
At the moment, we do some reconstruction work at Paldiski Road, Kolde Boulevard, and Sõle Street. There are some reconstructions of the wastewater pipelines in Mustamäe. If we speak about our plants, then there are some huge investments ongoing on the wastewater and water treatment plants. The wastewater treatment plant, we are in progress with the reconstruction of the secondary sedimentation tanks. Also the main pumping station reconstructions are almost on the final way. At the moment, we do some investments into the optimization of the wastewater treatment plant process, and we believe that in December, we can already gain from that. The optimization should give us an opportunity to control better dosing of the chemicals and usage of the electrical energy during the treatment process.
Some big projects at the moment are in the planning phase. During next years, we would like to reconstruct the ozonation process at the water treatment plant. The main idea is to improve the water treatment process by implementing the new microfiltration in the plant. If we move on to the next slide, then I would like to speak about our operational results in a little bit more details. As I already mentioned about the water quality in the network, then this is on a very high level this year, and we believe that by the end of the year, the percentage would be over 99.6%. The wastewater treatment plant is working well. If we speak about treatment process, then this is according to expectations.
We speak about the main pollutants as nitrogen or phosphorus. Our treatment process is very effective, and we treat almost two times better than the legislation says. The customer satisfaction in the third quarter was a little bit lower than was expected due to the changes in our customer system. We had some issues with the self-service and also with billing in July. The issues were related to the change of the IT system. By today, the challenges are solved, but it had an impact on our performance and, of course, on the feedback from the customers. By the end of the third quarter, the feedback from the customers was already positive, and the marks for the self-service were quite high.
The leakage rate in the third quarter was lower than last year, and it shows that the investments we do in the city are done in a proper way. The average duration of the water interruption is shorter than two hours, and this also shows that we plan our works in the best way and try to do everything that the impact on the customers is minimal. Rehabilitation of the networks is ongoing on the planned level, and we believe that by the end of the year, we will reconstruct over 35 km of pipes in total. Now, I will give over to Taavi, who will speak in details about our financial results. Thank you.
Thank you, Aleksandr. Let's first take a look at our water and wastewater volumes. Sales volume development is stable. Year-to-date private customer volumes increased slightly, pretty much staying on the same level as previous the year, increasing by 0.3%. Business customer volumes normally can have a little bit more volatility, but changes are still minimal, a 2.9% increase compared to the same period in 2025. Outside service area increased by 5.1%. Next, let's look at the development of revenues. On a year-to-date basis, private customer revenue in the main service area has increased by 9.4%, and at the same time, business customer revenue has decreased 4.7%. This is a result of price harmonisation, where private and business customer prices were harmonized by July 1st of this year. The result of this was that private customer prices slightly increased and business customer prices decreased.
From 1st of July, all customer segment prices are harmonized, meaning that same water price is applied to private and business customers. Wastewater price is applied in two pollution groups, lower pollution level and higher pollution level, and is specified by a specific pollution load measured in the wastewater. Outside service area revenues also increased 7%, primarily driven by the price adjustment and mentioned volume changes in previous slides. Next, taking a quick look at our cost development, starting with total cost of goods sold. Total cost of goods sold increased from EUR 10.3 million to EUR 10.6 million in the quarter. Direct production cost increased by 7.6%. The primary components there are chemical expenses and pollution tax. Chemical expenses are, for one aspect, impacted by increase in methanol prices, and pollution tax is a result of pollution load, which is delivered through the wastewater treatment plant.
In other cost items, staff cost increased by 6.6%, and construction services decreased at the same time 31%. Construction services are closely related to construction revenue, which we'll take a quick look at on total revenues in the next slide. In other expenses, we had almost a 35% increase, and here we implemented different measures to improve site security, which impacted also the cost changes in Q3. Next, looking at net profit level, we've briefly covered that changes in sales revenue, primarily driven by changes in water service price, which increased by 4.5%. At the same time, construction revenues for the quarter decreased by EUR 1.3 million, and the total change in the sales is around 0.8% increase compared to last year, same quarter. Construction revenue timing is very much tied to specific project development and offset the increase in water revenues for the third quarter.
Cost of goods sold, we briefly covered on previous slide. In the cost item marketing and general expenses, we saw primarily changes in staff costs, but also administrative IT services that are outsourced. One significant impact on our net profit level is also derived from net financial expenses, which is directly impacted by higher base rate in interest. Our loans are primarily tied to six-month Euribor, and the increase in base rate has a direct effect on our financial expenses as well. At the same time, of course, also our investment activities and increase in our loan portfolios. Next, we can right away take a quick look at our cash position development in the third quarter.
We can see that the investing activities with a cash outflow of EUR 16.4 million is primarily covered from operating cash flows, but also at the same time from financing cash flow in the extent of EUR 4.8 million. We maintain an optimal cash balance and apply for financing as needed. Total investments year-to-date can be seen on the next slide. Our total investments for year-to-date have reached EUR 40.8 million. It is comparable to the pace of previous year.
We expect annual volume of close to EUR 60 million of the investments this year. Around 80% of those investments made are also having, will in the future have a direct impact on our Regulated Asset Base, which is the primary component of our profitability. Regulated Asset Base is renewed during the price approval process, and the changes in investments and Regulated Asset Base is applied after next price approval process.
Finally, to summarize a topic that we have issued several notices in the past weeks, Tallinna Vesi has signed a settlement agreement with Tallinn University of Technology for a settlement in a historic water price dispute. This is a dispute where the source of is reaching back to 2011 to 2019 period. We have sought to resolve these proceedings and have signed a settlement agreement with Tallinn University of Technology and also four other companies, Olerex and three EfTEN Group companies. We have made proposals for settlement with all the claims in the courts today, but the result of those proposals will be clear in coming weeks. Thank you very much. With this, I will conclude my overview for today.
Yes. Thank you both for the presentation. Now we will proceed with the questions. You will have now few minutes to submit your question. Please feel free to type in any questions you might have. Seems like we do not have questions. The recording of the presentation will be available in Tallinna Vesi's YouTube channel in a webinar playlist shortly, and presentation materials and reports can be found on our webpage. Taavi and Aleksandr, thank you for the overview, and thank you all for joining. Have a good day.