Neste publishes financial results for first half 2017

Renewable diesel producer Neste has published its financial results for the first half of 2017. The Finnish company reports a continuation of its ‘solid’ performance alongside record sales volumes in renewables.

These results have come despite the uncertainty in early 2017 surrounding the US Blender’s Tax Credit.

"Neste's solid performance continued in the second quarter. Oil Products delivered good results, Renewable Products was able to increase its sales volumes to a record-high level, and Marketing & Services' operating profit was back on track. Neste recorded a comparable operating profit of EUR 236 million during the second quarter, compared to EUR 282 million in the corresponding period of 2016, which had been also positively impacted by the US Blender's Tax Credit,” said Matti Lievonen, Neste president and CEO.

“Oil Products posted a comparable operating profit of EUR 122 million, compared to EUR 149 million in the second quarter of 2016. Reference margin averaged USD 5.7/bbl, which was similar to the corresponding quarter last year. Our additional margin was USD 5.0/bbl, below the USD 5.6/bbl level achieved in the operationally excellent second quarter of 2016. We will be completing the ongoing strategic refinery investments during the third quarter, which will further support the additional margin going forward.”

Beyond oil products, Lievonen described other positive signs for Neste: “Renewable Products recorded a comparable operating profit of EUR 101 million, compared to EUR 119 million in the second quarter of 2016. The segment was able to keep its result at a good level with the support of higher sales volumes and more favorable market, despite the expiry of the US Blender's Tax Credit. The reference margin was 20% higher, but the additional margin was clearly lower compared to the corresponding period last year, mainly due to the lack of the Blender's Tax Credit. Renewable diesel sales volumes reached 674,000 tons, which is a new quarterly record. Second quarter sales allocation was quite typical: 68% of sales volumes were allocated to Europe and 32% to North America. Renewable diesel production facilities operated at a 96% utilization rate. Feedstock optimization continued and the share of waste and residue feedstock was high at 81% of total renewable inputs.

“In Marketing & Services our sales volumes were maintained at the previous year's second quarter level. Unit margins recovered from the first quarter, but were still lower year-on-year. The segment generated a comparable operating profit of EUR 19 million (23 million).

In terms of outlook for the rest of the year, the statement from Neste is a positive one.

“Our strategy implementation is proceeding well, we continue to focus on our customers and growth initiatives, and will be completing the already announced strategic investments in 2017. Therefore, we are confident that the year 2017 will be another successful one for Neste,” the company writes in its press release.