[Foreign Language]
Good morning, ladies and gentlemen. On behalf of the corporate office of investor relations, I'd like to welcome you to the Earnings Call of Grupa Azoty Group, and a warm welcome to today's speakers, who include Ms. Justyna Majsnerowicz, Vice President of the Board of Grupa Azoty Puławy; Mr. Marek Wadowski, Vice President of the Board of Grupa Azoty S.A.; Mr. Michał Siewierski, Vice President of the Board of Grupa Azoty Police; and Mr. Grzegorz Kuberski, Director of the Corporate Controlling Department of Grupa Azoty S.A. They will discuss the financial performance of Grupa Azoty Group companies for the second quarter and the first half of 2023. Let me now give the floor over to Mr. Marek Wadowski.
[Foreign Language]
Let me start by discussing the main events, the highlights of the period. One of them, the signing, was the signing of the agreement with the financial -- financing institutions of Grupa Azoty in order to waive the selected [commitments], and the financing agreements. We will discuss it later on during the presentation. We launched the production of polypropylene as part of commissioning at Polimery Police. We also signed new gas supply contracts with Orlen. Our fertilizers were successfully certified for compliance with the EU's latest requirements. Grupa Azoty also successfully passed Fertilizers Europe audit for fertilizer products. We signed a document on non-disclosure of information between Grupa Azoty, Grupa Azoty Puławy, and Orlen . Another highlight was the appointment of a temporary administrator for shares held by certain entities which are subject to sanctions.
Moving on to the summary of our financial performance, I would like to point your attention to the fact that over the past two years, and by which I mean 2021 and 2022, our performance was very solid. However, in 2023, considering an exceptionally unfavorable macro conditions, Grupa Azoty had to face a number of challenges. Therefore, you can see quite clearly that our performance deteriorated. However, I would like to point out that in the context of our production and output figures after the end of the second quarter, we -- I venture to say that the worst is behind us. The volumes are important. As you can see on this slide, those volumes or output volumes went down quite significantly year-on-year, mainly as a result of significantly lower results in terms of the demand.
We obviously are optimizing our performance to the demand in order to make sure that we use our financial resources as effectively as possible and generate the highest performance possible. Looking at the first half of the year, it was comparable to the performance in quarter two. However, quarter two was more challenging, and we had to face a lot of obstacles as a group, and it shows when you look at the figures on the slide and our production outputs are lower, mainly on the back of lower demand for our products. The actions that we are taking in order to address those unfavorable macro conditions include cost discipline. We are also putting a cap on our spending in order to make sure that we optimize the use of our financial resources.
We are obviously adjusting our production to the demand. We are optimizing the level of our stock, and we are intensifying our sales activities through our own network as well as our partners' networks. And as I said before, we signed an agreement with our financing institutions. As a result, despite this very challenging market situation, Grupa Azoty has been able to maintain our liquidity figures at a safe level, and our financial -- financing situation is also on the safe side.
A couple of words about our macro environment -- market environment. First of all, we need to emphasize that the first half of the year, and especially the second quarter, was a period when we had to face many challenges in our market environment. Those very difficult macro conditions are global by nature. Low demand on Grupa Azoty products persists.
Many branches of European economies are in a very difficult situation, especially in Germany. As we all know, German economy also faces a number of challenges. In China, we are still expecting the economic recovery. However, Chinese economy also faces a number of problems, mainly as a result of the weakening demand. In this context, the prices of feedstocks are relatively high, which puts our margins under pressure. Inflation rate still persists all over the world, and they're pretty high. Therefore, central banks all over the world are tightening their monetary policies, which reduces demand for many products and services.
However, we can see that after the end of the reporting period, there is a certain recovery on the fertilizers market, and you can see it quite clearly when you look at our output figures that we report on a monthly basis. The figures for sales of fertilizers are higher. What's very important to us are the prices of gas. In the second quarter of the year, and also in the first quarter of the year, but especially in the second quarter of the year, those prices were less volatile than in 2022. However, as I said before, we are still looking at a high level of those prices relative to the price of our products.
It is worth pointing out, especially that the price of gas still remain one of the main factors impacting the cost of production of our products. However, this element has lost some of its importance. As you can see, the level of those prices is lower compared to 2022. Other factors that impacted our performance obviously include the prices of CO₂ emission allowances, which have gone up quite significantly and they remain quite high. Obviously, interest rates are also important because interest rates affect the demand for a lot of our products. For instance, in the construction industry, we all know that interest rates impact the situation in this particular market and the way that the construction market functions.
So you can see interest rates are quite high, and this does not only apply to Poland. Even despite the recent cuts in interest rates, we still need to emphasize that the level is high. But this applies to countries in a lot of European and in non-European countries as well. Moving on to certain one-off event, we have published this information. We're talking about the sale of CO₂ emission allowances. Our production was lower than initially expected due to low demand -- lower demand. We decided, therefore, to sell some of our CO₂ emission allowances, and the impact on our EBITDA figure was nearly PLN 300 million, and we therefore secured certain funds in order to optimize the use of our financial resources.
The relation of revenue versus costs in the second quarter, both revenue figures and cost figures went down quite significantly. Our prices were reduced, but I need to point out to the fact that there's a certain relation between certain cost elements in quarter two alone. You can see quite clearly that the share of energy costs is much higher year-on-year. The share of gas costs is lower, but the share of energy cost is higher.
The share of electricity costs is 8%, and the second quarter was 8% in the second quarter year before, but 20% in this year, in the quarter two of 2023. So the cost of electricity is gaining in importance for us. The situation in the first half of the year was similar. Both revenue and cost figures went down. However, the electricity costs in terms of their share and the amount are much higher. The Agro segment, which generates the highest share of our revenue. In the reporting period, you have to focus on the fact that we launched the new fertilizing season in June. As the season started we notice lower volatility in the gas prices, which made possible for us to go back to our pricing policy.
That is, a systematic increase of our fertilizer product prices as time goes by. This is a transparent cost path that the market sees. But in the reporting period, we can see that the prices of fertilizers went down, which was due to the situation in the gas market, as we have seen a significant drop in gas prices.
Therefore, the prices of fertilizers went down accordingly. And when the prices of fertilizer product go down, you can see obviously, that our customers waited for the situation to unfold, therefore, they decided to postpone their product, their purchases, or they would purchase our fertilizer products right before the application of fertilizer -- fertilizers on field. As a result, both in the first and in the second quarter, or in the entire half of the year, the demand for our fertilizer products was significantly lower.
The prices of grains went down as well, quite significantly, and cereals in general. However, on the other hand, we have to remember about additional support for farmers. We're talking about PLN 10 billion for the purchase of fertilizer products, fuels, or additional payments for subsidies. This money is being paid out and will continue to be paid out to farmers in order to help build an increase in the demand for products, for fertilizer products. When we look at market price trends, we can see quite clearly that the market sees a significant drop in fertilizer products, not only in Poland, but across the board. In terms of compound fertilizers, the situation in this area, both in terms of the prices and the figures, is quite significantly better.
The spread is on the positive side, which is due to, first of all, a drop in feedstock prices. In terms of the price trends, you can see quite clearly that there was a decline in prices. Compound fertilizers follow a different path in terms of the annual demand trends compared to nitrogen fertilizers. So we have to emphasize that the demand is still lower than in previous years. We're also showing you the figures on the import of fertilizers to Poland. We have to focus on the fact that the import of ammonium nitrate is lower than previous years, but the import figures for urea is quite important because it's quite high.
These statistics show both urea grade, technical grade urea and urea used for agricultural purposes, but still the imports of urea in general is higher than in previous years, and we have to remember about that. A short summary in terms of, a market situation in the Agro segment. We'd like to point out that when we look at the segments, in Fertilizer segment, the prices of electricity, as well as the prices of CO₂ emission allowances, gain or are gaining in importance. We opened the new fertilizer season, and this season is characterized by higher demand. We see quite a recovery in the fertilizer market, which obviously translates into our production outputs, and we have reported those figures, on a monthly basis.
An important factor are the falling prices of agricultural produce, and we hope these trends will be offset by additional payments and subsidies to cover the purchases of fertilizers or fuels. And we're talking about PLN 10 billion, as I said before. The Chemical segment. For the Chemical segment, the construction market is the most important segment here, and the economic situation here is much worse than in previous years, which obviously impacted the demand for many different products in this particular area of our business.
We have to point out as well that the market sees a lot of competition from Asian producers, especially considering that the construction segment -- sector in China, fares not too well in China, so in the construction segment, the producers and the operators will look for other producers in other markets. We'll go back to it. We also have to emphasize a decline in prices across the board, practically, considering all the products in the period.
A short summary on the Chemical segment. The macroeconomic situation is very important, it's the main driver for the Chemical segment because it translates directly into the situation in the construction industry. Globally speaking, the demand for our products is low. We see a downward trend. We are trying to adjust the supply to the demand, depending on the situation in the market, and the producers obviously look at their stock levels, the producers and processors. And as I said before, there is a fierce competition or quite a competition from Chinese producers, especially in the context of the problems faced by the construction industry in China. In the Plastic segment, the situation is similar. The main driver here is the macro situation.
In the second quarter of the year, we saw weak demand for our products. A slight recovery in the automotive business, and I'm mentioning and emphasizing that it's a slight recovery, obviously, in the Plastics segment. This does not compensate for the problems observed in the other segments, so the situation in the Plastic segment, in general, is a major challenge for us, and we are showing you the price trends as well. We see the decline in prices for the Plastic products, and I'd like to point your attention to the left-hand side graph. The prices do not show declines in this particular area, and it puts our margins in the pressure -- under pressure.
A short summary, difficult macro situation in the Plastic segment. We're trying to adjust our production and our output to the demand existing in the market. We have a lot of competition in terms of imports of products from Asia, and we showed you price trends in Asia, and you can see quite clearly that the production costs are much, much lower than in Europe.
Moving on to the performance by segment. You can see on this slide, our segments faced a lot of challenges in the second quarter alone and in the first half of the year, especially in the Agro segment. The energy segment reported a positive performance. However, in this particular segment, we account for the sales of CO₂ emission allowances, which obviously improved the figures reported for this particular segment. If we compare it to the first half of the previous year, the situation is similar.
Practically, all segments was negative in terms of its performance and the contribution to our EBITDA in the first half of the year. Well, obviously, this is the leader in this particular area, is the Agro segment. I mean, the negative leader in terms of the negative contribution to EBITDA. A couple of words about the financial support. We received financial support for energy-intensive segments in the first half of the year on the back of sudden and abrupt increases in the prices of gas and electricity. We're talking about PLN 244 million. This is broken down by segment on this slide. Given the fact that the prices of gas, especially gas, but other energy prices as well, the main contributor was the Agro segment, followed by the Chemical segment.
Moving on to the performance by segment, a ll our segments, and especially the Agro segment that you see on this particular slide, are facing lower demand and much lower demand than before. This obviously translates into lower sales. The volumes speak volumes, so to speak, in this particular segment. The effect or impact of both volume and prices is balanced. However, the volume is an important driver here, an important element, and it's worth pointing out that in the Agro segment, the situation is different after the reporting period due to higher demand for fertilizer products relative to the first or the second quarter of this year.
In the chemicals segment, the main driver here is, are the volumes, and you can see quite clearly the decline in volumes and decline in revenues for technical grade urea especially, which is the main contributor in our performance in this particular segment, the chemicals segment. The situation in the reporting period obviously went down, deteriorated. In the Plastic segment, the volume effect is quite important. Obviously, the prices and the demand as well, and the demand in the reporting period is low. The performance of this segment obviously is influenced by the prices of feedstocks, which are not correlated with the prices of products. Our financial -- financial situation.
A s I said earlier, we signed an agreement with 13 financing institutions on the Net Debt-to-EBITDA covenant. As you can see on this slide, it is a negative ratio for us. We are not within the level or the limits established in the agreements, therefore, we signed an additional agreement on the waiver. We keep negotiating on the upcoming periods, so the negotiations are underway. However, the first agreement has been signed, and it's an important element that we need to point to.
Grupa Azoty has a stable situation in terms of our financing strength. We are meeting our obligations on a timely basis. We do have resources, and we do have financing agreements in order to meet all our obligations, so there are no reasons to be alarmed in this respect. A couple of words about our investments. Our CapEx spending that we show, both in the second quarter and in the first half of the year, were determined mainly by the spending figures on Polimery Police project. This is the lion's share of our CapEx spending in the first half of the year and the second quarter. So any shifts in this particular area result from the shifts in spending on the Polimery Police project.
Speaking of Polimery Police project, the progress of work right now is at 99.69%, so we can say that we are close to the final stages or the closing of the entire project. But this stage, the final stage, is really important. We are already in the ready-for-startup phase. We reached it on February 28th, and this phase means that we are ready to launch the project and the commissioned projects. Therefore, we started the commissioning of individual elements of this installation. We produced the first portion of the product in June this year. Unfortunately, as it happens for investments of that kind, we have identified a number of unexpected technical glitches and problems. Therefore, we are still working on the solutions to those problems.
Those glitches will be eliminated, and we will move on to the commissioning. We assume that by the end of the year, we will have integrity tests and t his will be a milestone for us before we move on to the commercial use of the project. As you can see on this slide, it is quite clear that this project is ready for startup, but obviously it still needs a lot of tests, regulatory and technical, in order to make sure that it operates without any problems for a long time. Other key investments are related to our energy projects. We're talking about the energy unit at Puławy, will be discussed later on. We're also showing two new investments, the installation for the neutralization and production of new fertilizers based on nitric acids. Obviously, we will discuss it on a regular basis in our reports as time goes by.
The performance of our capital group companies, I will not discuss it in detail. We'll focus traditionally on a couple of our product of our companies in the group. But as you can see, all our capital group companies faced a lot of challenges this year, in the first half of the year. We are now ready to move on to the discussion of the performance of Grupa Azoty Puławy. So I will now give the floor over to the Vice President of the Management Board of Grupa Azoty Puławy.
[Foreign Language]
Thank you very much for this introduction. Our performance depends to a large extent to the overall situation in the economy in the macro conditions.
The current situation is determined by the situation in the construction business, especially in the industry in general. Both in the first and the second quarter of the year, the prices of agricultural products went down year- on- year. The objective data also points to the lack of optimism in the market in general across Europe. And there are also signals that the situation will not be very good in the third quarter of the year. For the entire euro area, it shows that the slowdown in market continues, especially in the largest economy of the European Union, that is Germany. From our perspective we are talking about the major customers. In terms of our macro environment, we have to remember about the regulatory matters, which we cannot impact, we have no influence on.
Therefore, we have to adjust our performance or operations with that. We had an oversupply of imports of chemical products, so we had to optimize the production output. We put a lot of work into the optimization of the stock figures as well. All the operations that we have in the chemical synthesis are interconnected, so we have to remember about the consequences of other operators. If we decided to cut our capacities and our output, we were always driven by our focus on the performance, but also we have remembered about the country's food security and energy security. Therefore, those difficult decisions that we made in order to cut our production, but we continued to maintain the main supplies that are necessary for the food industry to operate successfully and other industries as well.
We also sold our excess CO₂ emission allowances, which we had after the close of 2022. Despite challenging markets and macro situation, we continued our investments. In the first half of the year, we had 18 CapEx projects on -- in the R&D area in order to obviously make sure that we do have an impact on -- w e do reduce our impact on the environment. We also improved the efficiency of our products. We established two clusters, the Lublin Hydrogen Cluster and the Circular Economy Cluster i In order to use post-production waste.
We appointed the operators of those clusters. In June, we signed the tripartite agreement between Orlen , Grupa Azoty S.A., and Grupa Azoty Puławy in order to have a non-disclosure agreement in relation to the start of the negotiations of the potential acquisition of Grupa Azoty Puławy. After the close of the reporting period, we saw an improvement in the situation in the fertilizer market.
We saw that we are back in terms of the normal or standard market trends. Moving on to our financial performance after the second quarter of the year, obviously, the macro situation remained very difficult, and the demand for our products continued to be low. Therefore, there were a number of pressures on our margins and our prices, and we had to adjust our production outputs and our segments. These are the key variables and determinants that are shown on this slide, which impacted our financial performance, both in the second quarter and in the first half of the year. Our consolidated revenue came in at PLN 1.166 billion, going down by nearly 50%, that is 47.69% year-on-year. The change in terms of volumes and prices was quite significant. This is shown in the table.
On the graph, you can see that we had an additional impact on the sales of CO₂ allowances. The impact on EBITDA was at more than PLN 160 million, a significant decline in revenue from sales. Translated into a negative performance, which was much lower than in the second half of the previous year. Lower production outputs were adjusted to the market demand, considering the volatility of prices. The cost of use, the cost of our production was also impacted, which was determined obviously by the cost of gas and cost of other cost elements. On the other hand, the electricity cost contribution went up, as the electricity prices increased twofold, which was combined by lower volumes.
Our performance in the first half of the year, you can see that this first and the second quarter performance had a major impact. The consolidated revenue went down by more than 50%, mainly by volume, especially in the Agro segment, as well as the decline in prices. The decline in costs was also significant. We're talking about the cost of gas prices. The gas prices were lower by around 20% year-on-year. In the first half of the year, at the same time, we reported higher costs of electricity, mainly due to an increase in electricity prices and the cost of coal as well. Also on the back of increases in coal prices, despite lower use by volume. Moving on to the performance by segments, you have to remember about the market factors.
A significant decrease in fertilizer prices and high imports translated into lower revenue by segment. In the two main segments, we're talking about a decline at around 67%. And, as a result, we reported negative EBITDA in our key segments. Obviously, the Agro revenue is the main contributor here. In the second quarter, it represented around 60% of our total revenue figure. And we're talking about PLN 720 million, going down quite significantly year-on-year. In terms of our Plastics segment. We are also showing a negative trend, and our sales were significantly lower. We're talking about around PLN 500 million, and the main declines were reported in our main products, that is UAN, fertilizer-grade urea. We're talking about drops of between 50%-70%, and the prices dropped significantly.
Obviously, this is due to unfavorable situation in the agricultural segment and the declines in the price of grains, as well as higher imports to Poland. And you have to remember that we had suspended prices in the European Union for urea. We adjusted our operations just as other EU producers. We decided to introduce significant cuts in the production of, for instance, nitrogen fertilizers and urea going down quite significantly. The same applies to our chemical production. The activity of our customers was limited, so we reported drops at around 67%, especially in terms of fertilizer-grade urea and melamine. In the Plastics segment, in the second quarter, we reported and we saw low purchasing activity in our key segments, that is the Construction and A utomotive segment, as well as the Packaging sector or segment.
Despite higher production and sales, rising sales of new cars in the European Union, we saw no positive trends in terms of the demand for our main product in the segment, that is Caprolactam. The fourth production of Caprolactam still remains suspended as of the beginning of this year. We're talking about 2 million versus 5 million year-on-year. In terms of Caprolactam installations in Europe, they did operate, however, across Europe. However, they adjusted their output to market demand. In terms of our energy segment-there was an impact of the energy segment on EBIT, on EBITDA, especially after the sales of the CO₂ emission allowances after the close of 2022. The segment performance in the first half of the entire first half of the year was similar.
We had a very unfavorable situation in especially Agro and Plastic segment, and the contribution was negative to EBITDA and EBITDA. The highest contribution, obviously, due to the Agro segment came from the Agro segment. At PLN 1.7 billion , which represented a drop by around 60% year-on-year, mainly due to lower volumes and negative trends for the price of products, for the other products. Urea prices and volumes were an important negative contributor here, also on the back of imports of urea to Poland. We're talking about 1 million tons of imports, 70% of which were used for agricultural purposes and the rest for technical-grade purchases. Our production of fertilizers, nitrogen fertilizer, was correlated with the situation going down, as well as our urea production going down year-on-year.
The main drops in terms of revenue were reported for our flagship product, products from Puławy, that is UAN, going down quite significantly. Ammonium nitrate. The prices of nitrate fertilizers went down as well, year-on-year by around 30%. The same applied to UAN. The drops represented in between 30%-40%. The demand at the moment is quite sluggish. We are doing our best to offset the situation or compensate for the situation by our experts. Obviously, we make use or take an opportunity to use the support from the government, subsidies to the farmers. We're waiting for the direct and area subsidies period. We're talking about around 1,000, between PLN 10 million-PLN 20 million . We have to remember about the trends in terms of grain prices as well.
In terms of the prices of our chemicals, we obviously reported declines for melamine, and the Agro segment reported a drop in terms of its contribution for the entire half of the year. In terms of melamine, the situation currently is as follows: there is no demand dynamic recovery, unfortunately. What we see at this moment are the actions taken in order to have the situation under control on an ad hoc basis. And the decline in terms of the demand for melamine is at around 30%-40% versus previous years. There are some signs of recovery, because the price gap between the European products and Asian products is getting narrower. And obviously, you have to remember that the time for the lead times for orders from Asia are very long.
We suspended the production of Caprolactam in the first half of the year, and obviously, this impacted a lot of our ratios in the plastic segment for EBIT and EBITDA. The current demand for Caprolactam all across Europe remains more or less the same. That is sluggish. We see quite an increase in terms of number of orders after the vacation or holiday period. However, we do not see any structural recovery in this area. In terms of supply, the market is quite balanced. There was a force majeure event announced by Belgium, but it did not increase the demand for this product, and the costs remain high. The expected increase in the contract prices for benzene will represent another challenge for the producers of Caprolactam.
Obviously, there will be pressures on an increase in the prices of Caprolactam, but obviously the amount of that increase will depend on the situation in the market. The market forecasts are quite cautious. There's a lot of uncertainty in terms of the situation in the future, in terms of demand for end products. This applies especially to the automotive business, so this is a very uncertain macroeconomic situation. In China, we see the continuing increase in prices of Caprolactam. The increase is due to higher, due to higher price of benzene and limited availability of Caprolactam, as certain production lines at big producers were put on hold. The increase in the prices, the local prices, impacted prices temporarily. However, this does not mean that the import, export, sorry, of Caprolactam to China will be profitable for us.
We have to remember about fierce competition, both for Caprolactam and polyamides. Moving on to production volumes, as I mentioned, in the first half of the year, the production volumes of our main installations were dependent and was correlated with the situation in the market. We also took action in order to adjust our stock levels, especially for urea and melamine. We resumed production into melamine lines in the second quarter, and the volumes are directly correlated to the situation in the market. The stabilization in the fertilizer market translates into our production-related decisions. You can see it in the preliminary results published for the month of August. There was an increase in the production, and it was the very first increase this year, year-on-year. In terms of our investments and CapEx spending, we are progressing here as planned.
On this slide, we are showing the key investments at Grupa Azoty Puławy, as well as their stage of completion. In terms of our flagship or biggest project, that is the construction of the power generation unit. The project has been completed. We have launched, or we launched the commissioning. We will have a number of tests, and we'll move on to the 30-day commissioning or test commissioning phase. We reported the launch of steam turbines. Problems or certain glitches that were eliminated, and after the elimination of those problems, we launched this installation, and we had test product production runs. After that, we will have a test commissioning, and then a final acceptance of the project. And according to the information we got from the Polimex Mostostal, this will take place in mid-December.
As far as our CapEx figures, quarter-on-quarter and a comparison between the first half of 2022 and 2023, you can see quite clearly the breakdown between our various types of our CapEx spending.
[Foreign Language]
Thank you very much. Now we can move on to discussing the performance at Grupa Azoty Police. Mr. Michał Siewierski, the floor is yours.
[Foreign Language]
Thank you very much. Ladies and gentlemen, the presentation on Grupa Azoty Police Capital Group starts with the summary of highlights in the second quarter of the year. We secured agreement with the financing institution of Grupa Azoty Police to waive certain covenants. In the second quarter, we also signed an annex, the framework agreement for the supply of gas with Orlen . We also launched the production of polypropylene as part of the commissioning at Polimery Police project. We also signed an initial agreement with Ultra Safe Nuclear Corporation and Hyundai Engineering on the cooperation on the development of nuclear power in Poland, as well as the technology, MMR technology. We also passed the Fertilizers Europe audit in order to confirm that we meet the highest standards for our fertilizer products.
We also launched the hydrogen economy in cooperation with the Pomeranian University of Technology, Technology in Szczecin, in order to train highly specialized personnel in hydrogen technologies. The situation in the fertilizer market showed certain signs of improvement after the reporting period. Moving on to discussing the consolidated performance for the second half of the year, we can say that our EBITDA came in at -PLN 27 million, and our net profit at PLN 6 million. Both the revenue and other performance figures were lower year-on-year. In the reporting quarter, we saw continuing unfavorable global macroeconomic conditions, which translated into low demand in the markets of our customers and its further processing markets. The low demand put pressure on the decrease of our product prices and also on our volumes.
The unfavorable relation of product prices versus feedstock prices decrease our margins and also our revenue from sales. We have to remember about major cuts on the production of our fertilizers and titanium white, due to a significant decrease in demand. The costs of production were high, and they translated into lower volumes versus the second half of 2022. On the other hand, a positive contributor was the sale of CO₂ emission allowances, and the proceeds from the sale improved both, individual and consolidated EBITDA and EBITDA figures for the second half of the year at PLN 91 million. As a summary of the consolidated performance for the first half of the year, Police reported EBITDA at -PLN 56 million and net profit at -PLN 44 million. Both the revenue and the profit figure were lower, was lower than the year before.
In the first half of 2023, most of our products sold at lower or actually negative margins due to the unfavorable relation of product prices versus the products, versus the price of feedstocks. Both the volumes and sales were lower year-on-year, mainly due to low demand and no possibility to cover the costs for most of our products. The financial support was a positive contributor, which was part of the assistance for energy-intensive sectors on the back of spikes in both gas and electricity prices, as well as the sales of CO₂ emission allowances. The proceeds from this sale was at or impacted our EBIT and EBITDA figures at PLN 91 million . Our financial costs or finance costs increased year-on-year, especially in terms of the cost of interest on our loans, as well as reverse factoring.
The positive contribution in our associates, which are valued based on equity method, was at PLN 69 million . This applied to GA Polyolefins and Chemipol, at PLN 57 million and PLN 12 million , respectively. In terms of the performance by segment in the second quarter, we will start with the information that we reported a loss at the EBIT level at - PLN 27 million for the fertilizer segment, and at - PLN 26 for the pigment segment. In both segment, the activity on the purchase side, on the market was low, and therefore, we reported lower sales. Those unfavorable relations prices versus costs put a pressure on our margins. We had to remember that the prices of some feedstocks, including the price of gas or potassium, chloride, or phosphate, went down.
However, the prices of energy carriers put a lot of pressure on our figures. The situation in agriculture remained unfavorable. By June 17, we had a suspension on the ag duties on urea and ammonia, and we also saw higher imports of fertilizer products to both Europe and Poland. In the second half of 2023, we saw limited demand for titanium white and related products. The construction segment saw a slowdown. And we also remember that certain segments also continued to face the aftermath of the pandemic. The automotive segment started to recover gradually. In terms of the prices of titanium white, they stabilized in the second quarter. However, the utilization of capacities, production capacities, still remained limited.
There was a difference in prices between Chinese and European products in terms of titanium white, and we had to remember that we have to be careful not to be dependent too much on the supply from China. The pigment segment still depended on the relatively high prices of feedstocks and energy carriers. Our EBIT figure was at, in other operations, was at PLN 93 million , mainly due to the sale of excess CO₂ emission allowances, which impacted an increase or translated an increase in EBIT EBITDA at PLN 91 million . In the first half of the year, we reported a loss on the EBIT level at - PLN 141 million in the fertilizer segment.
The prices of nitrogen products went down significantly, and we have to remember that we saw high, continuously high energy utilities prices, especially in terms of coal and electricity. The level, the level of sales continued to be low, mainly on the back of low demand, which was too low to cover the cost of production and to generate positive margins on the sales. Obviously, we received a compensation on the increase of gas prices in 2022, of which 65% was attributable to the fertilizer segment. In the pigment segment, we reported a loss of PLN 54 million. The volume of sales of titanium white went down 25% year-on-year.
The performance in the pigment segment were mainly determined by high production costs, especially titanium-related feedstocks, as well as utilities, as well as a low demand on titanium white. The demand for titanium white is significantly lower and has been significantly lower since July 2022, mainly due to high availability of cheaper titanium white from China and a slowdown in main segments. We see that the increase in the feedstocks used for the production of titanium white has been stopped, but still it remains at a high level. The Chinese construction market is in a deep slowdown phase, and it's exacerbated by problems in the developers market.
In the first half of 2023, we reported EBIT at PLN 73 million, mainly on the back of the sale of excess CO₂ emission allowances, which we purchased in the market, in the previous market, in the previous periods, and the related revenue was at PLN 165 million, and an increase in EBITDA, as I said before, by PLN 91 million. As a result, we reported an increase in 17% in terms of revenue across the capital group on this particular, in this particular area. In terms of volumes, the volumes of main product groups in the second quarter and in the first half of the year were lower year-on-year. We adjusted our production level to the market situation and the possible sales opportunities.
As the market situation was dynamic, this strategy prevented the accumulation of high stock on excessively high stock. As far as our CapEx expenditures and our investments are concerned, we completed a number of major investments, especially in terms of the upgrade of our power station, in order to connect the propane dehydrogenation unit as well as the polypropylene production unit. We also completed the project in order to make our production independent, in terms of the demineralized water production, of the variable salinity in the Odra River.
We also took action in order to meet the expectations of our customers even better, especially by upgrading our logistics base, stage two, phase two, in order to build a new warehouse for our fertilizers with the surface of 4,000 square meters, which will allow us to store around 4,000 tons of our products in big bag formats. We also increased or upgraded the storage and distribution facilities for TiO2, that's the titanium dioxide. In the first half of the year, we reported PLN 42 million in terms of our CapEx spending, of which PLN 23.3 million in quarter two alone. In the first half of the year, we were working on 63 projects in total. Thank you very much for your attention. Thank you, and a short summary of the presentation.
First of all, I'd like to point out that we still see, and we have seen in the reporting period, a very challenging situation in terms of the markets for our main products. We are adjusting our production to the level of the demand in order to optimize our cash situation across the group. We are taking action in order to improve the cost discipline, in order to optimize our costs, to make sure that the situation, the macro situation, affects our operations and performance to the least possible extent. However, the costs of feedstocks remain high, quite high, which puts pressure on the margins. Thanks to our efforts, our liquidity is at a safe level.
We signed an agreement with our financing institutions in order to waive certain covenants and Net Debt/ EBITDA. We are negotiating, or we keep negotiating, this agreement, for the upcoming periods. It is also worth pointing out that as of the third quarter, we have seen higher demand for fertilizer products. You can see that if you look at our output production, output figures, which we are reporting month by month. That will be all in terms of our presentation. I think we are now ready to move on to the Q&A session.
[Foreign Language]
Thank you very much. We're moving on to the Q&A session then. Question number one: Can we count on a positive EBITDA for your products in the third quarter? And a related question, whether the improved situation in the company will translate into a positive performance in the third quarter. Mr. Kuberski will answer that question.
[Foreign Language]
In the Agro segment, we see quite a significant improvement in demand versus previous periods of this year, which obviously translates into our results. Considering the additional support from the government, subsidies for products, grain products or fuels and fertilizers, we are keeping our fingers crossed, and we think that the situation will improve in the third quarter of the year.
[Foreign Language]
Thank you very much. Another question, do you have enough steam, technological process steam, and propane for your Polimery Police project?
[Foreign Language]
In terms of the supply of propane, we signed supply agreements, and they are implemented as planned, or the supplies are met. Obviously, we're adjusting our supplies to the commissioning phase, and as we said earlier, the supply of propane is secured based on agreements that we had signed.
[Foreign Language]
Another question: When can you expect that all the finance, financing, institutions agree to the waiver of the net debt-to-EBITDA ratio? And what if they don't give such a consent?
[Foreign Language]
We are negotiating currently in terms of the extension of the agreement or the waiver in the upcoming periods. We signed the agreement at the end of June this year, and considering the stage of our negotiations, I do believe that we can be quite optimistic. I believe you asked about the end of this year and not the next year, because this is what we need right now. I can say that all institutions taking part in this negotiation or these negotiations are quite optimistic. We can be quite optimistic, and I do believe that we will be able to arrive at an agreement with all those institutions, and it's possible.
[Foreign Language]
Thank you very much. Next question: What is the availability of free credit lines or available credit lines, and is there any possibility to have new credit lines from the market?
[Foreign Language]
Both free credit lines and our cash situation or free cash situation, and as you can see, we have limits at PLN 4.2 billion and nearly PLN 1.5 billion in free cash flows. So I do believe that, the situation is, quite safe here.
[Foreign Language]
Next question: Is the general contractor for the Polimery Police project expected to launch the project on full capacity? Is it secured in the contract?
[Foreign Language]
Yes, we do have an agreement with the general contractor and, which is Hyundai, and obviously, yes, this is a turnkey agreement.
[Foreign Language]
Thank you very much. This was the last question today. This will be all for our today's conference call. I would like to invite you all to investors chat with Mr. Wadowski. It will take place today at Stock, Stock Watch platform at 1:30 P.M. Thank you very much, and goodbye.