AS Tallinna Vesi’s sales for the third quarter of this year amounted to €16.22 million, which is 3.9% more than in the same period last year. Net profit was €3.93 million, decreasing by €0.12 million mainly due to the increase in interest costs.
Aleksandr Timofejev, Chief Executive Officer of Tallinna Vesi, said the third quarter was characterised by continued progress with planned investments. “Summer is the only time of year for many investment related projects and our team made the most of it. The aim was to carry out the work in the city with the least possible disruption to residents, for example by using environmentally friendly no-dig methods and working closely with the city and other utility owners," he said. Timofejev pointed out that the positive impact of the investments made so far to ensure vital water services at affordable prices for consumers can already be seen. The total capital expenditure planned for 2024 was over €60 million, with some projects to be completed in early 2025. Based on the revised timetables, €50 million of fixed asset investments will be carried out this year, and by the end of the third quarter €33.4 million of investments had been completed.
“The early summer kept the waters of Lake Ülemiste warm from May to October, and this presented challenges in ensuring high drinking water quality. Throughout the quarter, ensuring high water quality was one of the priorities that our team successfully addressed. We took more than 700 water samples during the quarter and drinking water met 98.9 percent all quality requirements,” Timofejev explained. He said that clean tap water has been ensured by an efficient water treatment process and regular monitoring of the distribution network, as well as ongoing preventive maintenance activities and timely investments.
Wastewater treatment also worked very well, with the quality of the treated effluent discharged into the Baltic Sea exceeding the legal standards in all parameters.
In the third quarter of 2024, the company pumped 7.04 million m3 of clean drinking water into the distribution network and treated nearly 11.11 million m3 of wastewater. New prices for water services, approved by the Competition Authority, came into effect at the beginning of the third quarter of 2024 in the Tallinn, Saue and Maardu areas and affected sales in this quarter. Besides the continued need to invest in water and sewerage infrastructure and to reduce the environmental impact, the need for water price adjustments also resulted from the obligation under the Public Water Supply and Sewerage Act to move towards harmonized water prices for private and business customers.
The company’s operating profit for the third quarter was €5.13 million, remaining at the same level as the year before. Operating profit was impacted by an increase in the cost of securing the service and maintaining the infrastructure. Net profit was €3.93 million, which is €0.12 million less than in the same period of the previous year. The decrease in net profit was mainly driven by the increase in interest costs.
For more than a year, a new and efficient ice pigging technology has been used to maintain water pipes, using an ice slurry made from a solution of water and table salt, which is pumped through the pipeline. More than a quarter of the water pipeline (nearly 250 km) have now been cleaned using the new technology, which helps to maintain the high quality of water. In addition, water quality is supported by investments made in recent years in water pumping stations, which allow secondary chlorination in various parts of the city.
One of the objectives of the company's customer service is to notify customers of water interruptions well in advance. In the third quarter, customers were notified at least 1 hour before the unplanned water interruption in 100% of the cases, and one interruption lasted an average of 2 hours and 36 minutes — this is 16 minutes better than the year before. To reduce the inconvenience caused by water interruptions, AS Tallinna Vesi continues installing additional isolation valves on the water network.
In the third quarter of 2024, the effluent from the Paljassaare Wastewater Treatment Plant met all requirements in place. The excellent quality of the treated effluent is demonstrated by pollutant levels well below the limits set by law. During the third quarter of 2024, the company took out more than 170 tons of debris, 65 tons of grit, 452 tons of nitrogen, and 61 tons of phosphorus from the wastewater.
In recent years, the wastewater treatment plant has seen continuous investment to ensure a sustainable high quality of treatment performance. Planned investments in the wastewater treatment plant amount to €8 million in 2024.
Investments are ongoing to improve the biological treatment process by reconstructing the secondary clarifiers at the wastewater treatment plant. Major multi-annual projects also include the installation of mechanical screens at the headworks upstream of the plant and the replacement of screens at the wastewater treatment plant, which are important environmental projects to keep the Baltic Sea clean.
The test period for the start-up of the cogeneration plant at the Paljassaare Wastewater Treatment Plant continued in the third quarter. In addition to thermal energy, the cogeneration plant allows to produce from biogas a significant part of the electricity needed for the wastewater treatment process.
At the water treatment plant, one of the most important projects is the renovation of the high-speed filters, which is now in the final stages. The preparation of design to upgrade the ozone production technology used in water treatment will continue until the end of 2024.
The water loss rate in the distribution network was a good 12.48% in the third quarter. However, this is higher than last year’s exceptionally low level. A year ago, the quarterly water loss rate was 9.98%. In order to reduce the rate of water loss and ensure high drinking water quality, it is important to carry on the continuous online monitoring of the water distribution network and the timely implementation of the network rehabilitation programme.
By the end of the third quarter, the company had rehabilitated and constructed more than 36 kilometers of pipelines, of which more than 16 kilometers were built using environmentally friendly no-dig methods. The company was working closely with the City of Tallinn and other cooperation partners, such as AS Utilitas Tallinn, to carry out as many works as possible at the same time to ensure environmental sustainability and minimise disruption to city life and traffic.
By the end of the third quarter, the company had installed over 12,800 smart meters, meaning that more than 57 percent of our customers now have remote water meters.
By the end of 2024, the company aims to have 60 per cent of its customers with a smart meter, and by the end of 2026 at the latest, all customers in Tallinna Vesi’s service area to have their water meters replaced with smart meters.
The company strives to provide its customers and consumers with a reliable service, part of which is the availability of important information about the service and the speed at which the enquiries are answered. In the third quarter, 99.8% of written enquiries were responded to within 2 days, which remains a high level.
Throughout the summer, nearly 60 public water taps in Tallinn provided clean drinking water for everyone. In addition, Tallinna Vesi supported a number of community and sports events, such as the Investment Festival and Ironman Tallinn — just to name those with the largest number of visitors — by providing tanks with fresh water.
In August, the company took part in the Opinion Festival for the first time, leading a discussion on sustainable consumption on the "Energetic Economy" stage. In the same month, a sporting event with a long tradition took place by Lake Ülemiste — the 52nd run around Lake Ülemiste hosted by Tallinna Vesi.
As a supporter of the Estonian Paralympic Committee, the company wholeheartedly cheered for the Estonian paralympic athletes at the Paralympic Games in Paris, which took place from 28 August to 8 September.
As a result of the co-operation project with the students from the Estonian Academy of Arts, an eye-catching street art was designed and produced that now decorate the facades of the four pumping stations operated by the company.
AS Tallinna Vesi is the largest water utility in Estonia, providing services to nearly 25,000 private and business customers and nearly 500,000 end consumers in Tallinn and its surrounding municipalities. Tallinna Vesi is listed on the main list of the Nasdaq Tallinn Stock Exchange. The largest shareholdings in the company are held by the City of Tallinn (55.06%) and the energy group Utilitas (20.36%). 24.58% of the company's shares are freely floating on the Nasdaq Tallinn Stock Exchange.
MAIN FINANCIAL INDICATORS
| € million except key ratios | 3rd quarter | 2024/2023 | 9 months | Variance 2024/2023 | ||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |||
| Sales | 16.22 | 15.61 | 13.48 | 3.9% | 46.71 | 45.62 | 38.53 | 2.4% |
| Gross profit | 6.91 | 6.64 | 3.58 | 4.0% | 19.30 | 18.16 | 12.38 | 6.3% |
| Gross profit margin % | 42.60 | 42.54 | 26.53 | 0.1% | 41.32 | 39.80 | 32.12 | 3.8% |
| Operating profit before depreciation and amortisation | 7.28 | 7.12 | 4.15 | 2.2% | 19.99 | 19.23 | 13.49 | 4.0% |
| Operating profit before depreciation and amortisation margin % | 44.86 | 45.57 | 30.80 | -1.6% | 42.81 | 42.15 | 35.00 | 1.5% |
| Operating profit | 5.13 | 5.10 | 2.44 | 0.7% | 13.71 | 13.30 | 8.52 | 3.1% |
| Operating profit - main business | 4.78 | 4.72 | 2.06 | 1.4% | 13.12 | 12.44 | 7.81 | 5.4% |
| Operating profit margin % | 31.63 | 32.64 | 18.07 | -3.1% | 29.36 | 29.15 | 22.12 | 0.7% |
| Profit before taxes | 4.07 | 4.20 | 2.32 | -3.2% | 10.51 | 11.13 | 8.21 | -5.6% |
| Profit before taxes margin % | 25.07 | 26.90 | 17.24 | -6.8% | 22.51 | 24.40 | 21.30 | -7.8% |
| Net profit | 3.93 | 4.05 | 2.22 | -3.1% | 9.13 | 9.87 | 6.05 | -7.4% |
| Net profit margin % | 24.23 | 25.96 | 16.44 | -6.7% | 19.55 | 21.63 | 15.70 | -9.6% |
| ROA % | 1.33 | 1.54 | 0.89 | -13.2% | 3.12 | 3.79 | 2.40 | -17.6% |
| Debt to total capital employed % | 61.82 | 57.42 | 56.37 | 7.7% | 61.82 | 57.42 | 56.37 | 7.7% |
| ROE % | 3.45 | 3.62 | 2.06 | -4.8% | 7.84 | 8.77 | 5.41 | -10.7% |
| Current ratio | 0.83 | 1.09 | 1.59 | -23.9% | 0.83 | 1.09 | 1.59 | -23.9% |
| Quick ratio | 0.78 | 1.03 | 1.52 | -24.3% | 0.78 | 1.03 | 1.52 | -24.3% |
| Investments into fixed assets | 15.38 | 12.40 | 7.93 | 24.0% | 33.42 | 22.84 | 15.66 | 46.3% |
| Payout ratio % | - | 79.41 | 78.52 | - | 79.41 | 78.52 | ||
Gross profit margin – Gross profit / Net sales
Operating profit margin – Operating profit / Net sales
Operating profit before depreciation and amortisation – Operating profit + depreciation and amortisation
Operating profit before depreciation and amortisation margin – Operating profit before depreciation and amortisation / Net sales
Net profit margin – Net profit / Net sales
ROA – Net profit / Average Total assets for the period
Debt to Total capital employed – Total liabilities / Total capital employed
ROE – Net profit / Average Total equity for the period
Current ratio – Current assets / Current liabilities
Quick ratio – (Current assets – Stocks) / Current liabilities
Payout ratio – Total Dividends per annum/ Total Net Income per annum
Main business – Water services related activities, excl. connections profit and government grants, construction services, doubtful receivables.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| € thousand | |||||||||
| ASSETS | Note | as of 30 September 2024 | as of 31 December 2023 | ||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | 3 | 6,364 | 14,736 | ||||||
| Trade receivables, accrued income and prepaid expenses | 10,168 | 8,608 | |||||||
| Inventories | 1,204 | 1,137 | |||||||
| TOTAL CURRENT ASSETS | 17,736 | 24,481 | |||||||
| NON-CURRENT ASSETS | |||||||||
| Property, plant, and equipment | 4 | 283,025 | 256,108 | ||||||
| Intangible assets | 5 | 1,434 | 1,293 | ||||||
| TOTAL NON-CURRENT ASSETS | 284,459 | 257,401 | |||||||
| TOTAL ASSETS | 302,195 | 281,882 | |||||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Current portion of long-term lease liabilities | 887 | 697 | |||||||
| Current portion of long-term loans | 3,467 | 3,594 | |||||||
| Trade and other payables | 14,439 | 10,886 | |||||||
| Prepayments | 2,905 | 3,604 | |||||||
| TOTAL CURRENT LIABILITIES | 21,698 | 18,781 | |||||||
| NON-CURRENT LIABILITIES | |||||||||
| Deferred income from connection fees | 49,535 | 44,653 | |||||||
| Leases | 2,368 | 1,892 | |||||||
| Loans | 106,092 | 92,835 | |||||||
| Provision for possible third-party claims | 6 | 6,018 | 6,018 | ||||||
| Deferred tax liability | 378 | 505 | |||||||
| Other payables | 102 | 128 | |||||||
| TOTAL NON-CURRENT LIABILITIES | 164,493 | 146,031 | |||||||
| TOTAL LIABILITIES | 186,191 | 164,812 | |||||||
| EQUITY | |||||||||
| Share capital | 12,000 | 12,000 | |||||||
| Share premium | 24,734 | 24,734 | |||||||
| Statutory legal reserve | 1,278 | 1,278 | |||||||
| Retained earnings | 77,992 | 79,058 | |||||||
| TOTAL EQUITY | 116,004 | 117,070 | |||||||
| TOTAL LIABILITIES AND EQUITY | 302,195 | 281,882 | |||||||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| € thousand | ||||||||||||
| Note | Quarter 3 | for the 9 months ended 30 September | ||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Revenue | 7 | 16,217 | 15,614 | 46,706 | 45,619 | |||||||
| Cost of goods and services sold | 9 | -9,308 | -8,972 | -27,410 | -27,462 | |||||||
| GROSS PROFIT | 6,909 | 6,642 | 19,296 | 18,157 | ||||||||
| Marketing expenses | 9 | -205 | -182 | -680 | -603 | |||||||
| General administration expenses | 9 | -1,514 | -1,267 | -4,539 | -3,887 | |||||||
| Other income (+)/ expenses (-) | 10 | -60 | -96 | -363 | -371 | |||||||
| OPERATING PROFIT | 5,130 | 5,096 | 13,714 | 13,296 | ||||||||
| Financial income | 11 | 19 | 36 | 168 | 72 | |||||||
| Financial expenses | 11 | -1,083 | -933 | -3,368 | -2,235 | |||||||
| PROFIT BEFORE TAXES | 4,066 | 4,199 | 10,514 | 11,133 | ||||||||
| Income tax | -136 | -146 | -1,380 | -1,267 | ||||||||
| NET PROFIT FOR THE PERIOD | 3,930 | 4,053 | 9,134 | 9,866 | ||||||||
| COMPREHENSIVE INCOME FOR THE PERIOD | 3,930 | 4,053 | 9,134 | 9,866 | ||||||||
| Attributable profit to: | ||||||||||||
| Equity holders of A-shares | 3,930 | 4,053 | 9,134 | 9,866 | ||||||||
| Earnings per A share (in euros) | 13 | 0.20 | 0.20 | 0.46 | 0.49 | |||||||
CONSOLIDATED STATEMENT OF CASH FLOWS
| € thousand | for the 9 months ended 30 September | |||||||||
| Note | 2024 | 2023 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Operating profit | 13,714 | 13,296 | ||||||||
| Adjustment for depreciation/amortisation | 9,10 | 6,279 | 5,935 | |||||||
| Adjustment for revenues from connection fees | 10 | -516 | -445 | |||||||
| Other non-cash adjustments | -88 | -131 | ||||||||
| Profit (-)/loss (+) from sale of property, plant and equipment, and intangible assets | -63 | -22 | ||||||||
| Change in current assets involved in operating activities | -1,627 | 143 | ||||||||
| Change in liabilities involved in operating activities | 147 | 323 | ||||||||
| TOTAL CASH FLOWS FROM OPERATING ACTIVITIES | 17,846 | 19,099 | ||||||||
| CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||||
| Acquisition of property, plant, and equipment, and intangible assets | -25,955 | -20,414 | ||||||||
| Compensations received for construction of pipelines, including connection fees | 1,517 | 2,966 | ||||||||
| Proceeds from sale of property, plant and equipment, and intangible assets | 111 | 24 | ||||||||
| Interest received | 168 | 73 | ||||||||
| TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES | -24,159 | -17,351 | ||||||||
| CASH FLOWS USED IN FINANCING ACTIVITIES | ||||||||||
| Interest and loan financing costs paid | -2,617 | -1,289 | ||||||||
| Lease payments | -916 | -902 | ||||||||
| Received loans | 15,000 | 45,500 | ||||||||
| Repayment of loans | -1,818 | -39,318 | ||||||||
| Dividends paid | 12 | -10,069 | -6,515 | |||||||
| Withheld income tax paid on dividends | 12 | -131 | -85 | |||||||
| Income tax paid on dividends | 12 | -1,508 | -1,352 | |||||||
| TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES | -2,059 | -3,961 | ||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | -8,372 | -2,213 | ||||||||
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 3 | 14,736 | 12,650 | |||||||
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 3 | 6,364 | 10,437 | |||||||
Additional information:
Taavi Gröön
Chief Financial Officer
AS Tallinna Vesi
(372) 62 62 200
kommunikatsioon@tvesi.ee
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