Taaleri Oyj (TAALA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Taaleri's Half Year Report Webcast. My name is Linda Tierala, and I'm heading Investor Relations here at Taaleri. Thank you for joining us, both of you who are joining us online and you who are here in person. Presenting today's results, we have Ilkka Laurila, our CEO, who will provide the highlights for the second quarter; and Lauri Lipsanen, our CFO, who will review the key financial developments over the quarter. And in addition, we have Ari-Pekka Maattanen, who is CEO of Fintoil, who will present Fintoil's business and strategic outlook. Following the presentations, we will have a Q&A, and that session will be in 2 parts. We will begin with questions related to Fintoil and its operations with Ari-Pekka available to answer those. And after that, we will move forward with questions related to Taaleri's Q2 financials and performance, and Ilkka and Lauri will address those questions. And for those of you joining remotely, you may ask questions through the webcast platform, and you can do so at any time. Those of you joining here live may ask questions through the microphone. And with that, I'm happy to hand over to Ilkka.

Good morning on my behalf as well. And like usual, it's time to go through the latest operational and financial development. And this time, it's the development of the first half of '26. Starting with the highlights. First of all, growth in Garantia's insurance portfolio as well as in market share continued versus the year ago and utilization rate, especially in the rental -- residential mortgage guarantees increased by more than 20% compared to year ago period. We were also able to launch new international nonpayment insurance and been able to kind of underwrite several new contracts in that area. So internationalization also continues in Garantia's business. Next, the net income from the investment operations was strong. So the Garantia's investment returns were extremely strong. Obviously mainly supported by the good development in the equity market. Then on the other hand, revenue and operating profit in investment segment was negative due to certain fair value changes, which we will also cover during the presentation. In Private Asset Management, the operations proceeded according to the plan. So in renewable business, team and business focused on the active management of the funds, new investments and so on. Then on the other hand, we continued and progressed with the exit processes during the review period and in real estate, Eden Living completed several new investments. Completion of the Nordic Science Investments also happened during the second quarter. That was obviously published during the time, and it has been consolidated now in the numbers since the May. Further preparation for the fundraising for SolarWind IV were initiated, and as the investment activities concerning SolarWind III, so the previous vintages, has continued as planned earlier. Finally, we published during July that we have made a significant follow-on investment in Fintoil and participated in the financing round on that. That's one of the indications that we will continue our active allocation of capital within our balance sheet. So if we then compare these activities towards our strategic priorities for this year, starting with Garantia's growth potential. First of all, like I said, growth in the utilization rate of the residential mortgage guarantee is quite evident, so that has continued on a strong level and continued to improve. Growth in insurance service result is evident from the numbers. Like I said, we have been able to underwrite several new contracts on the international non-payment insurance market. In the Private Asset Management, completion of the Nordic Science Investments happened during the quarter. We have also published that we are launching private credit strategy later in this year and next year and further milestones on that we will publish later in the autumn. And then on the direct investments and development capital, like mentioned, the follow-on investment in Fintoil was quite significant, although happened after the review period during the July. We also published that we will have a smaller follow-on investment on Ren-Gas, the kind of the investment which was published at the end of last year. Then a couple of words of the Nordic Science Investments in a nutshell. So we acquired 51% of the management company. Nordic Science Investments is a Nordic venture capital manager focusing on early-stage investments in science-based technologies, mostly in university spin-outs. The strategy, obviously, is to scale the fund management operations later with the larger, much more significant fund sizes. Company itself was founded in 2022, launched first fund in 2024 with EUR 45 million, and has made more than 20 investments so far with the 6 partners who will remain in the operational roles. Following then, a couple of words on the expansion on the Nordic Private Credit. So we published that we are launching new strategy in private credit, which will primarily focus on direct lending to small and mid-size companies in Nordic countries and other neighboring markets. We obviously see quite significant synergies when it comes to fundraising, the fund management operations. But then on the other hand also, we have excellent expertise, long track record in credit risk assessment through Garantia, which we also believe that we are able to, from the competence perspective, leverage in private credit operations. As we all know, Nordic countries are traditionally quite bank-dominated market. Then on the other hand, there is the private equity investors operating in the market. And we believe that this sort of financing, when it is also that the regulation market is tightening. So working in cooperation with the private equity and then on the other hand, with the banks and other financial institutions, there is a clear demand for these kind of funding opportunities and financing opportunities in the Nordic and the neighboring markets. Next milestones with regards to private credit strategy will be announced later this year. Then on the numbers, key figures. I will focus on the lower side of the slide, so the longer term numbers. Starting with the revenue, growth in revenue was at 3.9%, from the previous 12-month period, so EUR 65.6 million, out of which continuing earnings increased 6.5% to EUR 42.6 million. Then on the other hand, operating profit, as we all know, in our case, especially the operating profit, but also total revenue will fluctuate on a quarterly basis quite significantly. Operating profit declined a bit, 4.9% from the previous 12-month period down to 27.6%. But still out of that, operating profit from continuing earnings increased 12.6% from the previous 12-month period. Then covering different business segments, starting with Garantia, and starting with the numbers on the right-hand side. Insurance service result was at EUR 3 million, up from 3.4, so 26.5% increase. Total net income from the investment operations amounted EUR 8.6 million, and the split between the P&L and other comprehensive income, you can see on the right-hand side. So claim expense ratio remained on a low level. Risk position, meaning solvency ratio, is still stable and improving. And that obviously resulted very strong profitability as the combined ratio was 36.7%. And we also saw, like discussed, increased activity in North European non-payment insurance markets, and successfully were able to underwrite some of new contracts in that area. Finally, the premiums received. So even though that is obviously in our case, highly linked to residential mortgage guarantees, and even though that we all know that the residential transaction market in Finland has been quite slow, and the volumes have been declining. Even in that sort of market, the growth in premiums that we have been able to receive has increased on an LTM basis almost 20%, which is a good proxy also concerning the cash flow of the operation. Very good development in that area as well. No major movement in Garantia's insurance portfolio split, still amounting that EUR 1.8 billion when rounded on that level. The investment portfolio, EUR 169 million, and no major movements in that either. Moving forward to Private Asset Management, and starting with the renewable energy. The continuing earnings there declined a bit due to the fact that in a comparison period, there were those SolarWind III related retroactive fees, which were recognized during the comparison period. From the operational perspective, funds management continued and investing activities continued on an active level. SolarWind III fund investment in Hallanvahti, which is the largest solar power plant in Finland, was completed during the quarter and commenced its operations. Then on the other hand, we made a write-down with regards to one fund, and that is related to certain market environment development in certain countries outside Finland. Exit processes continued quite active and we still expect to be able to see some of the closings of those transactions during this year. Other Private Asset Management business, NSI, is now consolidated on the numbers since May. Bioindustry continued its activities within the portfolio companies, participated in some of the follow-on investments in financing rounds. So good development in some of the portfolio companies. In real estate, despite the quite slow market, the occupancy rates have remained on a high level, and Eden Living, our JV with the Keva pension insurance company, acquired 3 additional assets during the second quarter. In venture capital business, Nordic Science Investments continued its investment activities, made new investments, and participated in additional follow-on financing rounds. No major movements in the numbers in other Private Asset Management business. Then finally, the investment segment. Obviously, numbers are dominated by the fair value changes. So therefore, the revenue is now negative and operating profit is negative, and that is clearly driven by the fair value changes in Truscott Gilliland East Wind, which like I said earlier, will fluctuate on a quarterly basis depending on how the NAV is developing in the fund that has made the investment in Texas. And obviously, key driver there, not the only one, but one of the key drivers obviously is the electricity price development and the forecast development on that in Texas. And like I said, we that -- during the review period, we agreed that EUR 30 million follow-on investment in Fintoil, which we expect to be completed during the third quarter this year. Finally, we also published follow-on investment for the earlier investments that we made in 2025 to Ren-Gas, as it was able to enter into long-term offtake agreement with avanca Energy, which is a significant step towards the final investment decision concerning the Ren-Gas production facility in Tampere. So the process obviously is such that first you need to have all the planning ready and you need to have a committed offtake agreement. Then you are able to collect the financing for the investments, and then you are able to do the final investment decision. So this is an important milestone for that company. No major changes in the total amount of the investments and fair values on that. As a reminder, obviously, the Fintoil investments can only be seen after completion of the investment. Out of the development capital investments, we already have covered most of those, but maybe worth mentioning is that Intori Parkki volumes have continued to increase during 2026, and that obviously is highly correlated in that business with the EBITDA, and therefore EBITDA has also grown and improving, and developing positively during 2026. In Oribalt, online pharmacy sales continued strong growth during the beginning of 2026, and that is also developing positively, and we can see clear positive development in that company as well. So moving forward with the presentation, I will invite Lauri Lipsanen, our CFO, to cover result and balance sheet development.

Thank you, Ilkka. Hi. My name is Lauri Lipsanen, Taaleri Group CFO. And today, I'll present Q2 and H1 interim financials to you. In the second quarter of this year, revenue was EUR 13.2 million and operating profit, EUR 4.4 million, as stated by Ilkka. Continuing earnings not related to Garantia were EUR 7.5 million, but fell behind the comparison period, which was positively impacted by the retrospective management fee of EUR 1.6 million, which in turn means that the underlying growth continued. Performance fees were minus EUR 1.7 million, driven by the earlier mentioned write-down -- and no other major changes were recognized in terms of performance fees. Garantia's operating performance was strong and net result from insurance grew by over 25%. Net income from investment operations were driven by Garantia strong net investment income, mostly driven by strong equity or stock market-related gains. When comparing first half operating profit to the previous year, operating profit improved by EUR 1.6 million. First of all, continuing earnings increased by 2.2%, driven by Garantia, mainly due to, as stated, comparison period was positively impacted by the retrospective management fees. Secondly, the performance fee-related write-down of EUR 1.7 million was burning the result. Thirdly, net income from investment operations improved materially from EUR 0.4 million to EUR 4.8 million, driven by the strong net investment income from Garantia's portfolio. Net income from investment result was partially offset by negative fair value changes in investment segment, mainly driven by wind farm investment in Texas, of which fair value declined by EUR 2 million during the first half of this year. And this was also adversely impacted by the Joensuu Biocoal-related write-down of EUR 0.9 million in Q1 this year. In addition, net expenses increased by EUR 1.5 million, mainly because of the fact that Biocoal investment-related write-downs were EUR 0.8 million impacting Q1 cost base. Acquisition of Nordic Science Investments and related consolidation effect impacted cost base by EUR 0.3 million. And in addition, in order to execute our strategy, we have expanded our sales team. As visible on the left-hand chart, quarterly continuing earnings have been fairly stable, but the total revenue has been fluctuating. This has been mostly driven by fluctuation in net investment income, but in Q1, also by changes in performance fees. And the similar revenue fluctuation is visible in terms of operating profit on the right-hand side chart. When we're looking at the last 12-month basis figures, the composition of revenue is more balanced. Continuing earnings have been growing by 6.5%, whereas other and continuing earnings have been fluctuating on an LTM basis. For instance, Q2 and Q3 '25 LTM figures here are positively impacted by the renewable energy development portfolio gains and performance fees recognized for the last quarter of 2024. However, most of this recognized performance fee was written down in Q2 '26. This impact was, on the other hand, offset by the previously mentioned strong current net investment income. It should be emphasized that the operating profit from continuing earnings have been developing positively trend-wise as visible on the right hand. Then a couple of words regarding Garantia. As already discussed by Ilkka, despite the weak development of the Finnish housing market has continued. Garantia's insurance revenue has increased by almost 5% on a last 12-month basis, whilst insurance service expenses have remained fairly stable and recently even declined. These together have resulted in the positive net insurance result performance, which combined with the positive development of the net investment income have increased Garantia's operating profit above EUR 26 million on an LTM basis. And the underlying performance has been even stronger. So cash-based premiums received, which are colored here with the black increased by almost 20% on an LTM basis. However, the growth in terms of revenue has been modest, mostly due to the IFRS accounting principles causing delays in revenue recognition. On the right-hand side, it can be seen that the company annual ratio was again strong in the first half of this year and the claims ratio was low. It should be noted that expense ratio was impacted by the strategy development cost of EUR 0.4 million, equaling to 4 percentage points impact on expense ratio. Here you can see that Garantia's return on equity at fair value continued to be at excellent level and solvency ratio has remained strong as well as basic own funds have continued to grow and reached EUR 125 million in Q2. Garantia paid half of the dividend of EUR 18 million to the parent company, Taaleri plc in March and the second dividend payment will be made in September. Then a couple of words regarding Private Asset Management. As visible, continuing earnings grew by 4.3% on an LTM basis. And this development has been mainly driven by SolarWind III final closing that took place in Q4 '25. When looking at the chart on the right, you can see that both LTM operating profit and especially LTM operating profit margin have been declining and the declines accelerated in Q2 '26. Two drivers largely explain the decline in profitability. First of all, Q2 and Q3 '25 LTM profits are positively impacted by the earlier recognized performance fee of EUR 1.8 million, whereas most of this performance fee was written off during the last quarter. Secondly, LTM impact of retrospective fees relating to SolarWind III were lowest in the last quarter compared to the other LTM periods visible in this chart. What comes to Investment segment, fair value of the investment portfolio declined by EUR 3.1 million. During the last quarter, and it was mainly driven by the already mentioned negative fair value changes in the wind park in Texas, Truscott Gilliland East Wind investment. The total value of investments will increase materially, subject to the announced following investments in the Fintoil and Ren-Gas. And as a reminder, when looking at this table, fair value of the investment may deviate from the balance sheet value depending on the basis of accounting. And this is visible in Turun Toriparkki, of which fair value is currently EUR 16.6 million, whereas the balance sheet value is EUR 10.5 million. At the end, a short recap regarding Taaleri's balance sheet. Both balance sheet and equity ratio have remained strong. Total assets were EUR 304 million and equity ratio 71%. We entered into new financing arrangement of EUR 30 million in order to execute upcoming follow-on investment of EUR 30 million into Fintoil and in order to maintain flexible implementation of strategic initiatives. Investments were EUR 226 million at the quarter end, of which Garantia's investment portfolio accounted for 73% and development capital portfolio slightly below 20%. On top of these investments, we have a net cash position of EUR 50 million. And this in total exceeds our market cap of EUR 201 million as per the end of Q2. It should be noted that on top of the investments, which generate operative cash flow, our LTM operating profit from continuing earnings not related to the investment portfolio was EUR 11.2 million. Also, it is worth to highlight that Taaleri distributed the first dividend tranche of EUR 4.2 million in April and the second tranche will be paid in October. And now Ilkka will present an outlook for 2026.

All right. Thank you, Lauri. We haven't made any changes to the outlook for '26. So repeating the previous outlook is such that in renewable energy business, we expect the continuing earnings decline versus the comparison period and versus the '25 due to the fact of those subsequent management fees, which were recognized in '25. Obviously, other than that, it's very much dependent on the exit processes and how those will develop during the year, and that will have a major impact on the operating profit and the result of that operation. Then in other Private Asset Management, we expect to operating profit remain still negative in '26 as we are investing in growth and new asset classes and new activities in that area. In Garantia, insurance revenue is expected to grow in '26 and profitability of the reinsurance operations expected to remain stable. Then on the other hand, the other side of the business, the investing operations, obviously, development in that area is very much dependent on the overall interest market and the equity market development. In the Investment segment, like we saw also during this quarter, the result that both the revenue and the operating profit is very much dependent on the fair value changes as the other revenue as well as the other cost structure is quite limited in that segment. And on the cost structure, no major changes are expected during '26. So to summarize, like the headline title of this report was that the strategy execution is proceeding quite rapidly. We also have a good operational development in our business. Obviously in our case that good strategy execution and the operation development are not always shown in a short-term quarterly numbers. But in the longer term, we strongly believe that as we continue the high activity level that we are and we continue to execute our strategy that can be seen in a positive development of our numbers through the incoming quarters. That will conclude this section. And moving forward to the next section of the presentation, is to cover shortly the Fintoil and our investment on that. So like I said, we have made a decision to invest EUR 30 million in Fintoil as a part of the bigger, much larger financing round. So the EUR 25 million out of that is paid on completion and then EUR 5 million is then conditional on the Fintoil strategic investments. That will result approximately 35% ownership in Fintoil post transaction, subject to certain final conditions and final development and timing and so on and so forth. And the expected completion is to happened during this quarter, so the third quarter '26, and that is subject to customary authority and other conditions. But with that, it's my pleasure to invite Ari-Pekka Maattanen, the CEO of Fintoil to the stage to go through what Fintoil actually is, what are the operational and how we see the future development and the company sees the future development now going forward. But with that, Ari-Pekka, please, stage is yours.

Thank you, Ilkka. So pleased to be here, and good morning on my behalf also. My name is Ari-Pekka Maattanen, and I'm a CEO at Fintoil since last 2 years. I joined the company 1st of July 2024. Before that, I was heading Andritz EMEA business, EUR 1.7 billion sales, pulp and paper and power and a strong background on forest industry because before Andritz, I was at Stora Enso, having a long career there. And the last position there was running the containerboard business unit, where we created quite a significant growth in 8 years. But the Fintoil story itself, who we are? We are the most modern crude tall oil refining company in the world. We are located well in logistic-wise next to the port and good connections to the railway and road transportation. The bio industry, pulp mills who are producing the crude tall oil are located near to us and so is our customers who are producing biofuels are also close to us. So we have a perfect logistics setup with this Hamina-Kotka port. Our technology is based on a NEXPINUS technology, which is very cost efficient. It's a low energy setup as such. So we actually utilize 40% less energy in our refining facilities compared to the competitors. So what is crude tall oil? Crude tall oil is originated from the forest. It's an extractives from pine and spruce, which is separated in the pulping process in our pulp mills. Then crude tall oil is delivered to fin oil facilities where we fractionate that to 4 different kind of products. One is a turpentine, which goes to aromatics and hygiene products. Then the main product is fatty acids, and that goes to the renewable diesel feedstock. And there, the demand is really high today, and we are really focusing on that. The third product is rosin, which goes to the adhesives, inks, paints, coatings and similar applications. And last but not least, we have 2 different kind of pitch products, which currently goes to the bioenergy, but the bioenergy is actually a bit of the outlet for us, and it's the lowest value-added application for the pitch. So we are having more and more of the high value-added applications like construction asphalt, sterils and that kind of things. And that is the market optimization what we are currently doing. And what we have achieved so far. As said, we are a leading producer of the crude tall oil derivatives. And our capacity is roughly 10% of the global refining capacity with 200,000 tonnes of the capacity at Hamina-Kotka. Our purpose is to replace fossil-based materials, and we can do that in our customers' applications up to 400,000 tonnes of equivalent CO2 -- fossil CO2 tonnes. To put that in the context, that means roughly 45% of Finnish road traffic emissions, CO2 emissions. So it's quite a significant amount, what we are doing. We are a very lean organization. We are only 47 people, which means on a turnover-wise, EUR 4 million per single employee. And with the full capacity, it's EUR 5 million per single employee. We have a proven track record last 3, 4 years in operations. It functions well. It's a very effective, flexible and cost efficient. And with that, we have also created during the last year quite a significant growth. As we can see here, in 2025 in comparison to 2024, we grew 43% in our top line. So we have a heavy market acquisition during those days. Currently, by the end of Q2, last 12 months in comparison year-on-year, we have already grown another 23%. And we will, for sure, this year, exceed more than 30%. So we have '25, '26 really aggressive growth years at the moment. Here, we can see that the big part of our business is located in Finland, and there is a reason for that one. And that's the pitch. We need to have an outlet market for the pitch nearby at the moment. When you are growing aggressively, the market mix, it's not optimum at all at this stage. And that's why the profitability starts to follow gradually the growth rates, but that will come later when we have optimized our market and customer footprint. And that's why we have these multiple earning and growth levers, which we can see in here. Our capacity is 75% at the moment, what we are utilizing. There are still more room for the sales volumes because the market is not the bottleneck in here. Market exists. We have a broad customer base in general, and we can improve our customer and product mix and market mix. And of course, with the innovation, we could have high return investment opportunities in the future. So by saying that, I will go to our next steps, what the future will bring us. We have set the strategy in the stages, so different milestones. And that's clear because you cannot do everything at once. You have to do it step-wise systematically. The first step is already behind us, and that's a start-up stage. And we -- in the start-up phase, we had a limited market access due to the offtake contracts, but actually, that secured our business for the first years, initial years. Now we are already in a fast growth stage, which really means that our top line is growing really rapidly. And the enabler is that we have broadened our customer base quite aggressively from the totally different applications, different categories. And with that, we are understanding the market much better than we had understood before. And by understanding the market, we start to create an innovation and R&D work towards the next steps and really find the right customers, right markets, right applications where we can make most out of the value with our customers in these applications with our products, with the crude tall oil value chain. And then we are entering to the optimization stage. There, we're actually selecting the right customers who to partner with, right applications and improve our customer and market mix quite rapidly. At the same time, we need to have a right geographical footprint, which means that we understand what are the key markets and what are so-called outlet markets for us and how we set up our organization to support the strategy. Then when you enter into the new business, the first question is always that is the business profitable? Can you make it profitable? And that's a yes. We can make this profitable because the demand is growing. There is a RED III directive, which increases the demand of bio-based fuels quite rapidly in coming years. '26, '27, we are in balance, but '28 advanced feedstock, it's already scarce in the market in '28 based on this one. The second question, which is a more important question is that can you differentiate from the competitors? Yes, we can. And we have set up our innovation work. And as a proof point of that, we have filed our application of the environmental permit for the next investment stage 6 weeks ago. And with that, we are differentiating further from our competitors towards that and are able to adapt to the changing market environment. And as once again said, I'm really pleased to have HitecVision, the private equity investment -- leading investor in the energy sector on board and especially Taaleri's support to this business to really remove the barriers in our balance sheet to execute our strategy towards the profitable growth. Thank you so much to letting me be here to tell the Fintoil story. Thank you.

Thank you for the presentation, Ari-Pekka, and thank you also, Ilkka and Lauri for your presentations earlier. We will now move forward to the Q&A session. And as mentioned earlier, we will start with a Q&A with Fintoil's CEO, Ari-Pekka Maattanen, as he's here on stage with me. So if you have any questions online, please continue to submit those through the platform, and we're happy to take questions here also from the audience. So please go ahead. We have the first question here from the audience.

Yes. Samu Wilhelmsson from Nordea Grid Research. Thank you, Ari-Pekka for great presentation. Maybe a few questions regarding Fintoil. First of all, regarding the new growth strategy, are you expecting to these investments tackle into more creating like new sites? Or does it focus more on expanding the existing Hamina site?

The first stage, it is an existing site. But in the future stage, we are not excluding also other options for the profitable growth.

Okay. Got it. Then you mentioned in the announcement, the EBITDA margin target of 20% by 2030 from around 9%. So just trying to understand, does that mainly stem from the new multisite strategy? Or does it include some internal efficiency measures from existing sites?

The first stage is really that we need to optimize our customer and market mix because we are not optimal at all with such an aggressive growth, there is an acquisition cost of the markets, and we are actually carrying that acquisition cost at the moment. And to get rid of that one, it takes 1.5 years, a couple of years to the optimization part and then the profitability will start to follow. But on the top of that, there are also the investments behind that 20%.

Okay. Then the final question regarding the crude oil availability because we know that it's a tight market. And you said that now because what is happening in the Middle East, the capacity utilization has been low in Fintoil now because of availability concerns. Have this impacted the market prices of CTO? And are you managing these price-related risks? And is there a risk that these price increases would force you to downgrade your capacity even further if the prices would increase further?

That's an interesting thing in general because actually, crude tall oil producers are following our pricing. So first, we add up the pricing, and they are actually following us. So this is a totally new business environment for me because Normally, it's vice versa in here. But at the same time, I would say in our strategy, we have to concentrate in investments to upgrade our products further to increase the crude tall oil paying capability, and we have to be much better than the competitors in that sense. And not just increasing the fractionation capacity.

Yes, yes, of course.

And we have a question here from the audience as well.

Yes. Sauli Vilen from Inderes. About the top line potential of the current side, can you give us any insight, obviously, in the -- Taaleri has said that you're aiming for double-digit growth annually, but that doesn't tell much about the potential.

Our target was EUR 180 million to achieve that one, but it seems that we are already achieving that this year. So we have upgraded our targets in this strategic round, but it will be clear above the EUR 200 million in one side.

And is that the level where you think you could achieve the profitability target also?

No, not only, not only because then we need these investments what we are actually currently starting on or even additional capacity to be acquired.

By acquiring more capacity, do you mean expanding the current site or --

Not only. There are also other options. You can also acquire downstream.

Right. Okay. And then about the investment, maybe can you shed more light on the -- what kind of CapEx you are actually making now once you have the notable amount of wiggle room, so to speak, and you are not restrained anymore with the balance sheet. So obviously, yes, the greenfield operation was maybe down -- far down in the future, but like for the next 24 months, can you open up more what you are planning to do with the cash pile?

I don't want to speculate too much about the CapEx at this stage, but it's not that significant in the first stage. But the thing is that we want to upgrade our so-called commodity products towards the market, which is growing really rapidly in coming years. And I hope that we are up and running in 2028 with that one.

So what you're basically saying that you actually have excess capital at this stage since you clearly hasn't been earmarked.

In general, that's my belief that the CapEx is not the bottleneck today. The perfect business ideas and innovation is the bottleneck. And I think that we have find something now to go further with that one. But we are expecting the final investment decision by the end of this year, latest January next year when we have done our feasibility study regarding this business case.

Okay. Then about your new partner, the HitecVision, about their role. Obviously, Taaleri has been at the helm during the past 6 years or so, but now the HitecVision will be the main owner. So how you see they -- what kind of role they will be playing into your operations?

They are very strong in the energy sector in general. And I think that that's the value what they are going to bring us to the POD work as such to really, let's say, challenge us in the right way and then give the right guidance, what should we do on that side? We have our strategy, our opinions on that side, but I'm really waiting forward this strategy round and very fruitful discussion regarding the energy sector in general.

And they, of course, will operate mainly from the Board, I would assume.

Yes. That's the case.

And we have a question online as well. So this is regarding the regulatory risk related to Fintoil's operations, for example, related to what's in Finnish called sekoitevelvoite or blending obligations.

Blending mandate.

Blending mandate. So is there something that you could elaborate on that?

Yes, it is always a risk as such. But as I said, that's why we have 2 market segments. We have a segment for biofuels and biochemicals, and we will keep the biochemicals alive for sure. It's going to be a niche business, but anyway, we are keeping that alive. So if the market environment is rapidly changing because of the regulatory things, we can quite quickly adapt to the changing market environment and conditions as such. And that's what we need to have the agility build in this business.

Thank you, Ari-Pekka. And we will now move to the second part of this Q&A. So please join me here on stage, Ilkka and Lauri for the financial Q&A. And again, if you would like to ask the question, you can do so through the platform. We have a question here online. So please go ahead.

It's Patrick Campbell from Nordea. Just going back to Fintoil and the arrangement. My question relates to other Private Asset Management. So you're still guiding for negative profitability despite the expectation of some performance fees. Can you kind of break down this more clearly, please?

The performance fees mainly relate to the renewable energy as well as we have that from -- regarding Fintoil, we have some upsides there. But part of the profit related to Fintoil relate to other division, not other Private Asset Management.

All right. Then just going back to SolarWind I and the kind of reversal of the performance fees there. Can you kind of explain a bit more the rationale behind this decision? And maybe a follow-up regarding this is what are kind of the implications for the other funds currently in the exit phase?

Yes. First, as a reminder, first, you need to understand that is a market-related question. And in SolarWind I, it's good to note that there is one investment in Jordania, in Middle East. One investment in Serbia and 2 investments in Sweden. So for example, there's no investments in Finland. That's maybe good to highlight. And the write-down relates to sort of the market development in those areas, especially in Middle East, we all know what's the geopolitical situation in there. And then on the other hand, I think all that are following the energy market knows that what's the renewable energy market situation in Sweden as there has been in certain cancellation of the investments, especially in the Northern Sweden area.