Neste profit jumps as renewable diesel sruges
In Finland, Neste reported a 3rd quarter operating profit of EUR 435 million, which was its highest quarterly result ever. Renewable Products improved its sales margin compared to the previous quarter, and sales volumes were at a high level. Overall, Renewable Products’ comparable sales margin was USD 635/ton, and cash flow before financing activities was EUR 71 million. For the year to date, operating profit totaled EUR 1,184 million and cash flow before financing activities was EUR 211 million
CEO Peter Vanacker commented, “Neste had an excellent financial performance in the third quarter. We posted a comparable Oil Products’ comparable operating profit was solid despite the maintenance activities implemented in the third quarter. Marketing & Services had one of their best quarterly performances ever. Neste reached a ROACE of 21.0% over the last 12 months, and had a leverage ratio of 6.6% at the end of September.
Looking forward, Neste said that developments in the global economy have been reflected in the renewable fuel, feedstock and oil markets; and volatility in these markets is anticipated to continue. Vegetable oil price differentials are expected to vary, depending on crop outlooks, weather phenomena, and variations in demand for different feedstocks. Global oil product demand is expected to grow at a lower rate than in 2018, while global refining capacity additions are expected to grow driven by large projects in Asia and the Middle East. Based on our current estimates and a hedging rate of approx. 80%, Neste’s effective EUR/USD rate is expected to be within a range 1.12-1.15 in the fourth quarter of 2019.
Demand for renewable diesel is expected to remain strong in the fourth quarter in anticipation of the growing mandates in 2020. Feedstock markets are expected to continue on a strengthening trend. Utilization rates of the renewables production facilities are expected to remain high, except for the scheduled four-week catalyst change at the Rotterdam refinery in the fourth quarter of 2019.
Category: Fuels
