Neste reports improved performance for renewables division

By Erin Voegele | November 01, 2016

Neste recently released third quarter financial results, reporting its renewable products division recorded a comparable operating profit of €124 million ($137.13 million) during the quarter, up from €75 million during the same period of last year. The renewable products comparable sales margin was $375 per ton, compared to $239 per ton.

Matti Lievonen, president and CEO of Neste, noted the division’s reference margin was slightly higher than during the same period of last year. He said it continued to be able to achieve high additional margin by successfully margin management and sales allocation. According to the company, feedstock optimization also continued during the quarter, with the share of waste and residue feedstocks at 79 percent of total inputs.

In addition, Lievonen indicated its renewable products’ reference margin is expected to remain at approximately the average level of the year 2015, and additional margin is expected to remain strong. Utilization rates of the company’s renewable diesel production facilities are also expected to be high.

Within its financial report, Neste also credited the U.S. blenders tax credit with improving the reference margin during the third quarter. That tax credit was not in place during the same period of last year, the company noted.

Sales volumes in the renewable products division reached 544,000 tons, down 5 percent when compared to the same quarter of 2015, and still reflected normalization of inventories after the Rotterdam turnaround. Neste reported that approximately 65 percent of sales volumes went to Europe during the quarter, with 35 percent to North America.

Production reached an average utilization rate of 100 percent during the quarter, while the proportion of waste and residue inputs reached 79 percent. According to Neste, renewable diesel production reached 631,000 tons during the third quarter, up from 622,000 tons during the same period of last year.

Overall, Neste reported comparable operating profit of €264 million for the quarter, down from €281 million during the same period of 2015. Net revenue was at €3.034 billion, up slightly from €3.023 billion reported for the third quarter of 2015.