Hello, ladies and gentlemen. Thank you for joining.

I am Kristiina Tamberg, 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 second quarter 2026. The presenters will also speak about Tallinna Vesi's operational and financial results of the quarter.

Aleksandr will give an overview about some of the investments made in the second quarter. After the presentations, you will have the opportunity to ask questions.

It is also possible to type in your question during the webinar, but this will be answered at the end part. To submit your question, please use the question box on the right side of the screen.

Now I will hand over to Aleksandr and Taavi. Here you go.

Thank you, Kristiina. Good morning, everybody.

Welcome to our webinar. We will introduce today the results for the second quarter of 2026.

Our results were very good. If we speak about financial results, then our sales were €18.6 million, and we also paid out in June dividend, the volume was €11.4 million, 57 cents per share.

We continue to invest into our assets, and we provide vital services to our customers, and it's very important that our assets are in good shape and our risks are at minimum. This year, we plan to invest about €60 million, and in the second quarter, we invested €16.56 million.

A lot of large investment projects ongoing, and I will speak about them a little bit in details on next slides. If we speak about the quality of the product, about the tap water quality, then it was excellent during the first 6 months of the year, and it was 100%.

During 6 months, we took 1,612 samples from our customer taps, and all the samples were according to the standard. If we speak about effluent and about wastewater treatment plant, then it's working well, and the results perform all limits that are coming from the legislation.

The wastewater treatment plant performed during the second quarter very well. At wastewater treatment plant, we produce from the wastewater sludge biogas, and from biogas, we produce electrical energy and also heating power.

100% of heating power we produce ourselves for the wastewater treatment plant, and approximately 60% of the electrical power we produce from the biogas and use at the wastewater treatment plant. If we speak about the second quarter, then it was production record for us.

We produced 3.2 GWh electrical energy. I have to say that during the second quarter, we had one working accident at work at the wastewater treatment plant, and the accident took place on the 1st of May during the filling of the methane tank with water.

By today, the person is back to work, and we improved our manuals that are contain how we have to behave when we do such works. If we speak about our customers, then we continue with the project of installation of smart meters.

By the end of this year, this project will be completed fully, and by today, already 91% of our customers use smart meters that help them every day. If we move on to the next slide, then I can say that we do a lot of construction works in Tallinn.

This year, we have been constructing in the center of Tallinn and also on the Endla-Paldiski mnt crossing. By today, we constructed already 17.8 km of pipelines, and 27% of that was constructed with no-dig method that is environmental friendly.

By the end of the year, we plan to construct over 40 km of pipes in the city of Tallinn. If we speak about ongoing projects, then as I mentioned before, we do some work on Tammsaare road, Paldiski road, and Järvevana road as well.

In the center, in the heart of Tallinn, in Rävala Boulevard, the construction works are pretty much completed. There are some finalising and documentation.

If we speak about the wastewater and water treatment plants, then a lot of investments happening in there as well. At wastewater treatment plant, we are ongoing with wastewater treatment sedimentation tank reconstruction.

By today, over 50% of that project is completed. This is the 3 years project with the cost of over €9 million.

Also, a lot of works have been done during previous years in the main pumping station of Paljassaare, and this year, we completed the first suction tank reconstruction. The second tank will go into the reconstruction when the weather will be suitable for that.

At the moment, we plan the fourth quarter for that. We do a lot of work also to improve contingency.

We rethink how to double the water production in the city of Tallinn if there will be any incidents in the Ülemiste water treatment plant. This year, we plan to construct some extra boreholes in the city of Tallinn to improve our contingency in the cases when there's emergencies at the water treatment plant of Ülemiste.

At the moment, we are almost on the last part of the ozonation reconstruction process. We made the procurement, and our plan is to reconstruct fully ozonation process in Ülemiste water treatment plant.

This is the huge investment project that is really important for the water quality of Tallinn. If we move on to the operational results, then our operational results are excellent.

We move on with our strategy to reduce the number of bursts or leaks in the city and also the number of blockages on the wastewater side. As I mentioned before, our rehabilitation program is ongoing, and in the second quarter, we built 13 km of pipes, and during first 6 months, over 17 km of pipes.

We also try to deal with emergencies as quickly as possible, and if we speak about the second quarter, the average water interruption took less than 2 hours. The leakage rate this year in the second quarter is a little bit higher than last year, and this is connected with the tough winter conditions.

If we speak about the quality of the product, then as mentioned before, the tap water is of the best quality, and our citizens can use over 70 taps over the city to get the drinking water 24/7. If we speak about the customer satisfaction, then in the second quarter, it dropped a little bit comparing with the last year, and this is mostly related with the upgrade of our self-service system.

Starting from the end of April, we use our new website that got a very good feedback from our customers. You can find from there a lot of information about our business and also about our daily activities in the city.

You can get from that information where we have some bursts or challenges on the network, and also from there, it's possible to get information about water tanks that are situated in the city during the emergencies, and also get some information about water interruptions. Starting from the end of April, we started to use new self-service as well for our customers, and by today, a lot of bugs have been solved in the system, and today, the system should work correctly.

Our aim is to improve IT systems as our customers are in touch with them daily, and we feel that during the third quarter, all these systems would be upgraded, and all mistakes that have been there at the starting point would be solved. Thank you very much.

I will hand over to Taavi, who will speak in details about our financial results. Thank you.

Thank you, Aleksandr, and welcome to everyone to our second quarter webinar. In the next slides, I will give a short overview of our sales revenue and cost developments, and a quick glance at our investment progress thus far.

First, starting off with water and wastewater volumes are in all our key segments—private customer, business customer, and outside service area. The volume trends are stable or slightly increasing, both for the second quarter and also for the 6 months.

Private customer and business customers have more stability in their numbers. Outside service area is a little bit subject to the rainfall volumes, and again, have a little bit more fluctuation in the numbers, and based on the 6 months figures, the increase is 2.5% compared to last year, which also reflects that the overall development is very stable.

On the next slide, we will be looking at revenue aspects. What affects our revenue aspects is the price adjustment that was performed in 2025 May.

It affects more private customers. Private customer revenues have increased more because there's a price equalization mechanism that is based on the current regulation that required that prices between private and business customers are on the same level from 1st of July 2026.

With latest price adjustment that took place from 1st of July, now private and business customer pricing is the same. We do have a pollution-load-based pricing for wastewater, but that is not subject to customer segment, but the pollution load of the wastewater.

Both of these price equalization aspects are valid for the second quarter and also for the 6 months. This is main reason you see private customer revenues increasing more and business customer revenues staying close to the same level.

On the next slide, let's look at total cost of goods sold in Q2. Total direct production cost remained broadly on the same level compared to 2025, which is a good outcome.

We have some increases in chemicals cost primarily due to methanol, but at same time, slight decrease in electricity. As Aleksandr also mentioned, the main contributor here is the own-produced electricity, which is produced in the wastewater treatment plant CHP, or combined heat and power plant.

The difference that you can observe here compared to last year second quarter is minimal, but the overall impact for the quarter is significant as we produced 3.2 GWh of energy. Staff costs increases have also impacted the total cost of goods sold, increasing by 6%.

Depreciation increases reflect the investment activities that we are carrying on. Construction services cost that have decreased by €1 million reflect very much the construction services that we provide on the market through our subsidiary company, Watercom.

On the next slide, we'll look a little bit also on revenue impact of that. Basically, it means that construction services that were accrued for in the second quarter were €1 million lower than in same quarter last year.

It's very much related to the revenue and cost timing of construction services. In overall, the result is that total cost of goods have slightly decreased by 2%.

On the next slide, now let's take a look at the net profit level and the main impacts. In the second quarter of '26, we had a net loss of €0.1 million.

It's €1.1 million lower compared to Q2 2025. As previously mentioned in previous slide, the one key aspect is the timing of both services and revenue and construction services cost.

When comparing quarter-to-quarter—meaning comparing first quarter to second quarter—then we have to keep in mind that in the second quarter, we paid out the dividend in total volume of €11.4 million, which is also triggers the corporate income tax cost, which was for the second quarter €3 million. Year-to-date net profit was €4.2 million, and this is very much in line with our annual business targets.

Administrative and marketing expenses showed an increase of 20% compared to 2025, and were primarily driven by IT outsourced services and personnel cost. Also, financial expenses have increased as we have increased our debt to finance our investment activities, and also, the base rate for our loans has increased in the first half of 2026.

Now on the next slide, let's take a quick look on our cash flow developments in the second quarter. You see that the operating profit level is 5.7, comparable to same quarter last year, but slightly lower, mainly because of the aspects described earlier.

Investment activity cash flow is €13.1 million, and financing activity operations close to zero. This is a net outcome of debt received and at the same time also repayments and dividend payments and financing costs.

On the last slide, a quick look at our investment progress. With the 6 months of 2026, we have invested €24.4 million, which is on target with our annual estimate of €60 million.

It's close to the same levels compared to last year, and we expect that total investment volume for the year will be close to €60 million. That includes an estimated 81% of investments that will be included in regulated asset base.

Regulated asset base is reviewed during the price approval process, latest of which took place in the first half of this year, and new price is applicable from 1st of July, also taking into account the investments that we are making this year. With this, I will conclude my summary, and back to you, Kristiina.

Yeah.

Thank you both for the presentation, and now we will proceed with the questions. We will have a few minutes to type in any question you might have.

It seems that we don't have any questions right now, and then we will close this meeting. Recording of the presentation will be available on Tallinna Vesi's YouTube channel, and webinar presentation materials and reports can be found on Tallinna Vesi's web page.

Taavi and Aleksandr, thank you both for your overview, and thank you all for joining. Have a good day.

Thank you.