Neste reports "excellent third quarter" with "outstanding performance" in renewable products
Finland-headed oil refiner and renewable fuel producer Neste Oyj has reported an “excellent third quarter" with "outstanding performance in renewable products.
"We maintain our view that we expect 2018 to be a very strong year for Neste," said Matti Lievonen, President and CEO of Neste who will hand over the reins to Peter Vanacker on November 1.
Renewable products exceeded the previous year’s performance as a result of a “favorable market” and “successful margin optimization” posting a comparable operating profit of EUR 228 million (EUR 171 million). A higher comparable sales margin had a positive impact of EUR 115 million on the operating profit compared to the corresponding period last year.
During the third quarter renewable diesel production facilities operated at an average 93 percent utilization rate. Sales volumes were 547 000 tonnes, about 14 percent lower than in the corresponding period last year impacted by the scheduled maintenance activities at the Rotterdam refinery in the second quarter, and by the preparations for the Singapore turnaround in the fourth quarter.
During the third quarter, 71 percent of renewable fuel volumes were sold to the European markets and 29 percent to North America. The share of 100 percent renewable diesel, HVO100, delivered to end-users continued up on 2017 levels reaching 29 percent of total volumes which is well aligned with the company’s 50 percent in 2020 target.
Feedstock mix optimization towards lower-quality raw materials continued, and the proportion of waste and residue inputs was 84 percent. The vegetable oil market is expected to remain volatile, and Neste continues to expand the use of lower-quality waste and residue feedstock.
Vegetable oil price differentials are expected to continue to vary, depending on crop outlooks, weather phenomena, and variations in demand for different feedstocks, which will have an impact on the Renewable Products segment’s profitability going ahead.
We maintain our view that we expect 2018 to be a very strong year for Neste, said Matti Lievonen, President and CEO of Neste.
For Neste celebrating its 70th year of operations and already ranked the world’s 2nd most sustainable company, the report was a show of strength. Likewise for Matti Lievonen who will step down at the end of October after a decade-long tenure as Neste’s President and CEO. Peter Vanacker, who has been on board since September 1, will assume the responsibility on November 1.