Market announcement

Title

Tallinna Vesi´s first-quarter sales amounted to €17.99 million

Message

AS Tallinna Vesi's sales in the first quarter of 2026 were EUR17.99 million, which
is  an increase of 12.4% compared to the  same period last year. Growth in sales
was mostly driven by sales of construction services and changes in the price for
water service related to increased investment.

In  the first quarter,  investments totalling EUR7.86  million were made, which is
16% more  than  in  the  same  period  of  2025. Aleksandr Timofejev, the CEO of
Tallinna  Vesi,  said  that  in  the  first  quarter,  the  company  focused  on
strengthening operational continuity and preparing for the busy construction and
renovation  season in the upcoming summer. "Investments are crucial for ensuring
the  sustainability of  the water  infrastructure and  for coping  with changing
climatic  conditions -  for example,  the Kolde-Lahepea  detention pond in North
Tallinn  is due to be completed this  summer, which will help to reduce flooding
in  the area," Timofejev explained. He  said the construction and reconstruction
of  water, sewer and stormwater systems will  peak during the summer months, and
the  company aims to carry out all the work with as little disruption to traffic
and people's lives as possible.

"Important  projects are  also underway  at the  water and  wastewater treatment
plants.  At  the  water  treatment  plant,  we are progressing with an ozonation
project  aimed at  ensuring high-quality  water treatment, improving operational
reliability  and  reducing  the  plant's  energy  consumption. At the wastewater
treatment  plant,  work  is  continuing  on  the  renovation  of  the  secondary
clarifiers  and on  the implementation  of AI  to optimise treatment processes,"
explained  Aleksandr Timofejev. To improve the reliability of the water network,
the company is constructing more borehole pumping stations in the Lasnamäe area.
The total investment planned for this year amounts to EUR60 million.

Preparations  were also made during the  quarter for upgrades aimed at improving
customer  communications. These included a  new self-service portal and website,
as  well as a new  corporate identity. The upgrades  were launched in the second
half  of April.  Preparations were  also made  for the  start of  the public tap
season.  This time, a significantly larger number of taps was opened than before
-  78 in total. In addition  to Tallinn, taps were  also turned on for the first
time in Saue and Maardu.

The  quality  of  drinking  water  remained  high  throughout the first quarter,
meeting  all quality standards  100%. During the quarter,  the company took 761
water  samples. Clean tap water is  ensured through an efficient water treatment
process and regular monitoring of the water distribution network, along with the
ongoing  preventive maintenance activities and  timely investments. Revenue from
the  sale of  water services  increased by  8.7% year-on-year, or EUR1.29 million,
reaching  EUR16.14 million. Revenue from water services sold to business customers
decreased,   while  revenue  from  water  services  sold  to  private  customers
increased.  The change in the sales of water  services was mainly due to the new
prices  for  water  services  introduced  on  1 May 2025. These prices took into
account  both the legal obligation to  harmonise prices for private and business
customers   by   1 July   2026, and  the  need  for  investment  to  ensure  the
sustainability of water services.

Tallinna Vesi's return on assets over the last 12 months was 4.4%. The company's
net  profit for  the first  quarter of  2026 was EUR4.28  million, which  is EUR0.82
million  higher than in the same period of  the previous year. The growth in net
profit has been driven by operational efficiency and the justified profitability
of investments made to ensure a clean environment and service continuity.

"The  services provided by our subsidiary  Watercom and the successful operation
of  the combined heat and power plant  - which generated 100% of the heat energy
and  57% of the electricity required for the wastewater treatment process - have
made  a  significant  contribution  to  the  company's  financial  performance,"
explained  Aleksandr Timofejev.  The effective  operation of treatment processes
also had a positive effect on this result.

Tallinna Vesi aims to provide an excellent customer experience, future-proof its
infrastructure  and ensure the continuity of  the vital service it provides, all
the while keeping the price for the service affordable for consumers.

Construction  work on  a new  building has  begun at  the water treatment plant,
while  the  Paljassaare  building  is  still  in the design phase. Another major
project  is the  ongoing construction  of the  energy complex  in Paljassaare by
Utilitas.  The energy complex  will start producing  heat for Tallinn's district
heating network using wastewater and seawater in early winter 2026.

By  the  end  of  the  first  quarter,  we  had rehabilitated and constructed 5
kilometres   of   pipelines,   of   which   0.5 kilometres   were   built  using
environmentally friendly no-dig techniques. We are working closely with the City
of  Tallinn and other partners so that we  can complete as much work as possible
at the same time.

Work  continued on  several major  construction projects  in the  first quarter,
including  the construction of a stormwater  detention pond near the junction of
Lahepea  Street  and  Kolde  Avenue  in  North  Tallinn,  which will help reduce
flooding  in the area. Pipes  are also being replaced  at Paljassaare Street and
Paljassaare  Lane. Construction work  on Peterburi Road  is being carried out in
cooperation  with the  City of  Tallinn and  Rail Baltic.  Work has begun on the
reconstruction  of  A.  Lauteri  Street  in  the  City Centre, as well as on the
construction  of a new stormwater  detention tank in the  area around A. Laikmaa
Street, Maakri Street and Rävala Avenue.

A  stormwater management scheme  has been developed  for the Mustamäe area. This
scheme  uses nature-based solutions to increase the retention time of stormwater
and  create  a  greener  urban  environment.  These stormwater solutions help to
reduce the risk of flooding during periods of heavy rainfall.

In  the first quarter,  the quality of  the effluent treated  at the Paljassaare
Wastewater  Treatment  Plant  outperformed  the  effluent standards. To keep the
Baltic  Sea clean, the company uses efficient treatment processes that helped to
remove  around  286 tonnes  of  solid  waste,  36 tonnes  of grit, 527 tonnes of
nitrogen and 63 tonnes of phosphorus from wastewater during the first quarter of
2026.

The rate of water loss in the water distribution network remained at roughly the
same  level in the first  quarter as a year  ago, standing at 15.99 per cent. In
order  to keep water loss  rates low, the company  carries out continuous online
monitoring  of the  water distribution  network and  continues with  its planned
water network rehabilitation programme.

By  the end  of the  first quarter  of 2026, Tallinna  Vesi had  installed smart
meters  for  around  85 per  cent  of  its  customers,  and  the project will be
completed  during 2026. The new meters provide information on water consumption,
allowing  leaks in customers'  pipes to be  detected as early  as possible. This
will  help to protect the  environment and minimise the  risk of property damage
caused by water accidents. The switch to smart meters has received very positive
feedback  from customers, and the meters provide  the water company with a clear
picture of water consumption in the service area.

In the first quarter, we set up ice rinks in Haabersti, Nõmme, North Tallinn and
Saue, and helped build snow castles in Mustamäe and Lasnamäe with the support of
Tallinna Vesi and volunteers from the rescue services. To raise awareness of the
work  involved in providing vital  water services, the company  took part in the
family  day at the  Nõmme Snow Park  to spark young  people's interest and raise
their awareness of water and environmental care.

As  a long-standing  supporter of  para-athletes, Tallinna  Vesi has renewed its
cooperation  agreement with the  Estonian Paralympic Committee  for this year to
support  the  preparation  of  para-athletes  for  the Winter Paralympics and to
advance  sporting opportunities and the overall  quality of life for people with
disabilities in Estonia.

We  made donations to the Estonian  Agrenska Foundation, the Autismikool Charity
Fund, The Gift of Life cancer treatment fund, the Tallinn Women's Crisis Centre,
the Food Bank and the Tallinn Children's Hospital Foundation after achieving the
target for the annual campaign inviting our staff to move.

AS  Tallinna Vesi is the largest water utility in Estonia, providing services to
around  25,000 private and business customers and about 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.

Additional information:

Taavi Gröön
Chief Financial Officer
AS Tallinna Vesi
(372) 626 2200
[email protected] (mailto:[email protected])


MAIN FINANCIAL INDICATORS

                                                    Quarter 1
 EUR million
 except key ratios                                  2026  2025  2024  2026/2025
-------------------------------------------------------------------------------
 Sales                                              17.99 16.00 15.11     12.4%

 Gross profit                                        7.63  6.59  6.08     15.7%

 Gross profit margin %                              42.38 41.18 40.23      2.9%

 Operating profit before depreciation and
 amortisation                                        8.12  6.96  6.39     16.8%

 Operating profit before depreciation and
 amortisation margin %                              45.15 43.48 42.29      3.9%

 Operating profit                                    5.45  4.48  4.13     21.6%

 Operating profit margin %                          30.27 27.99 27.37      8.1%

 Profit before taxes                                 4.32  3.49  3.04     23.8%

 Profit before taxes margin %                       24.02 21.81 20.09     10.1%

 Net profit                                          4.28  3.44  3.02     24.3%

 Net profit margin %                                23.77 21.49 19.97     10.6%

 ROA %                                               1.17  1.08  1.38      8.0%

 Debt to total capital employed %                   64.95 61.42 58.10      5.7%

 ROE %                                               3.40  2.82  3.11     20.3%

 Current ratio                                       1.34  1.08  1.44     24.1%

 Quick ratio                                         1.29  1.01  1.37     27.7%

 Investments into fixed assets                       7.86  6.76  6.65     16.3%

 Payout ratio %                                        na    na    na
-------------------------------------------------------------------------------

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

                                                         as of       as of

 EUR
 thousand                                             31 March 31 December

 ASSETS                                          Note     2026        2025

 CURRENT ASSETS
--------------------------------------------------------------------------
   Cash and cash equivalents                      3     14,996      11,294

   Trade receivables, accrued income and prepaid
   expenses                                             11,358      10,762

   Inventories                                           1,104       1,163
--------------------------------------------------------------------------
 TOTAL CURRENT ASSETS                                   27,458      23,219



 NON-CURRENT ASSETS
--------------------------------------------------------------------------
   Property, plant, and equipment                 4    334,646     338,654

   Intangible assets                              5      3,284       2,699
--------------------------------------------------------------------------
 TOTAL NON-CURRENT ASSETS                              337,930     341,353
--------------------------------------------------------------------------
 TOTAL ASSETS                                          365,388     364,572



 LIABILITIES AND EQUITY



 CURRENT LIABILITIES
--------------------------------------------------------------------------
   Current portion of long-term lease
   liabilities                                             743         765

   Current portion of long-term loans                    3,735       3,742

   Trade and other payables                             13,818      17,604

   Prepayments                                           2,204       2,781
--------------------------------------------------------------------------
 TOTAL CURRENT LIABILITIES                              20,500      24,892



 NON-CURRENT LIABILITIES
--------------------------------------------------------------------------
   Deferred income from connection fees                 53,205      52,112

   Leases                                                1,355       1,502

   Loans                                               155,427     155,391

   Provision for possible third-party claims      6      6,018       6,018

   Deferred tax liability                                  742         697

   Other payables                                           69         165
--------------------------------------------------------------------------
 TOTAL NON-CURRENT LIABILITIES                         216,816     215,885
--------------------------------------------------------------------------
 TOTAL LIABILITIES                                     237,316     240,777



 EQUITY
--------------------------------------------------------------------------
   Share capital                                        12,000      12,000

   Share premium                                        24,734      24,734

   Statutory legal reserve                               1,278       1,278

   Retained earnings                                    90,060      85,783
--------------------------------------------------------------------------
 TOTAL EQUITY                                          128,072     123,795
--------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                          365,388     364,572

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                for the 3 months

                                               ended on 31 March

  EUR thousand                            Note      2026      2025



  Revenue                                7      17,993    16,004

  Cost of goods and services sold        9     -10,366    -9,413
-----------------------------------------------------------------
  GROSS PROFIT                                   7,627     6,591



  Marketing expenses                     9        -267      -255

  General administration expenses        9      -1,865    -1,787

  Other income and expenses              10        -49       -61
-----------------------------------------------------------------
  OPERATING PROFIT                               5,446     4,488



  Financial income                       11         24        33

  Financial expenses                     11     -1,148    -1,032
-----------------------------------------------------------------
  PROFIT BEFORE TAXES                            4,322     3,489



  Income tax                                       -45       -53



  NET PROFIT FOR THE PERIOD                      4,277     3,436
-----------------------------------------------------------------
  COMPREHENSIVE INCOME FOR THE PERIOD            4,277     3,436
-----------------------------------------------------------------


  Attributable profit to shareholders            4,277     3,436

  Earnings per share (in euros)          12       0.21      0.17

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                     for the 3
                                                                         months

                                                                 ended 31 March

 EUR thousand                                                Note    2026    2025



 CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------------------------------------------------
   Operating profit                                               5,446   4,488

     Adjustment for depreciation/amortisation               9     2,496   2,281

     Adjustment for revenues from connection fees           7      -193    -182

     Other non-cash adjustments                                     -36       0

     Profit (-) / loss (+) from sale of property, plant
     and equipment, and intangible assets                             0     -46

   Change in current assets involved in operating
   activities                                                      -538   1,204

   Change in liabilities involved in operating activities           -82    -343
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS FROM OPERATING ACTIVITIES                       7,093   7,402



 CASH FLOWS USED IN INVESTING ACTIVITIES
-------------------------------------------------------------------------------
   Acquisition of property, plant, and equipment,
   and intangible assets                                        -12,648 -12,547

   Proceeds from targeted funding of property, plant, and
   equipment.                                                     8,827   5,454

   Compensations received for construction of pipelines,
   incl connection fees                                             654     207

   Proceeds from sale of property, plant and equipment,
   and intangible assets                                              0      46

   Interest received                                                 24      33
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES                   -3,143  -6,807



 CASH FLOWS USED IN FINANCING ACTIVITIES
-------------------------------------------------------------------------------
   Interest and loan financing costs paid                           -33     -32

   Lease payments                                                  -215    -230

   Loans received                                                     0   5,000
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES                     -248   4,738


-------------------------------------------------------------------------------
 CHANGE IN CASH AND CASH EQUIVALENTS                              3,702   5,333


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE
 BEGINNING OF THE PERIOD                                    3    11,294   3,589


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE END
 OF THE PERIOD                                              3    14,996   8,922