Neste Corporation, Half-year financial report, 24 July 2025 at 9 a.m. (EET)
Reliable operations with improved results, performance improvement program
delivering
Second quarter in brief:
· Comparable EBITDA totaled EUR 341 (240) million
· EBITDA totaled EUR 246 (119) million
· Renewable Products' comparable sales margin was USD 361 (382)/ton
· Oil Products' total refining margin was USD 10.0 (15.1)/bbl
· Cash flow before financing activities was EUR 226 (-466) million
January-June in brief:
· Comparable EBITDA totaled EUR 551 (791) million
· EBITDA totaled EUR 446 (561) million
· Cash flow before financing activities was EUR 0 (-819) million
· Cash-out investments were EUR 499 (758) million
· Leverage ratio was 37.8% at the end of June (31.12.2024: 36.1%)
· Comparable earnings per share: EUR 0.02 (0.28)
· Earnings per share: EUR -0.10 (0.02)
Figures in parentheses refer to the corresponding period for 2024, unless
otherwise stated.
President and CEO Heikki Malinen:
“During the second quarter, we succeeded in running our operations safely and
reliably. We saw positive developments in the biofuel regulation both in the US
and EU, largely supporting long-term renewables demand. However, the market
environment was volatile as geopolitical and global trade tensions continued to
impact commodity prices and exchange rates, and we expect this to continue. In
late June, the geopolitical events affected the oil markets and especially the
increased middle distillate prices had a positive impact on our quarterly
results.
We continue our measures to improve our financial performance. Our comparable
EBITDA in the second quarter reached EUR 341 (240) million and cash flow before
financing activities was EUR 226 (-466) million. The program to enhance our cost
competitiveness, production reliability and commercial performance globally
continues to deliver results. We have been able to generate EUR 107 million
EBITDA run rate impact by the end of the second quarter. Our improved working
capital efficiency supported cash flow generation. Our leverage ratio was 37.8%,
in line with our financial target.
In Renewable Products, our comparable EBITDA totaled EUR 174 (152) million in
the second quarter, thanks to increased sales volumes despite weaker margins
year-over-year. Our comparable sales margin was USD 361 (382)/ton while sales
volume increased to 1,096 (955) thousand tons, a new quarterly record. We
succeeded in leveraging our global commercial presence and maintained high
utilization rates at all refineries. Our sustainable aviation fuel (SAF) sales
increased close to 80% quarter on quarter, benefitting from additional SAF
production capacity at our renewables refinery in Rotterdam, the Netherlands.
During the second quarter, we strengthened our collaboration with many of our
customers, including Amazon Air and FedEx.
In Oil Products, comparable EBITDA totaled EUR 135 (62) million in the second
quarter. Operations were solid and sales volumes increased to 3,021 (1,524)
thousand tons as the 2024 comparison period was affected by a turnaround in
Porvoo. The total refining margin was low at USD 10.0 (15.1)/bbl, affected
negatively by higher supply costs and a tougher gasoline export market.
In Marketing & Services, our comparable EBITDA was EUR 32 (24) million in the
second quarter. Lower volumes in the main markets were balanced by successful
commercial operations.
Our strategic growth investment project in Rotterdam is proceeding according to
the updated plan. When completed in 2027, the refinery will be the world's
largest facility producing renewable diesel and SAF. It is optimally located to
serve the growing European markets.
We at Neste have invested heavily to contribute to the implementation of
renewable fuels mandates, such as ReFuelEU Aviation and Renewable Energy
Directive (RED III). National implementation of RED III is taking place in many
European countries, bringing much needed predictability. For example in Germany,
the key proposals would have a positive impact on biofuels demand. Our
flexibility to switch between road and aviation renewable fuel products
according to the market demand is an important capability in the current market
environment.
We are determined to improve our performance and are on the right track to
deliver. However, the markets continue to be challenging. In the current
uncertain and volatile operating environment, our top priority is to further
improve our competitiveness and financial position. We still have a lot of work
ahead of us, but I am confident in our actions and the Neste team's ability to
drive the required performance improvement.”
The Group's second-quarter 2025 results
Neste's revenue in the second quarter totaled EUR 4,511 (4,642) million. Lower
market prices had a negative impact of EUR -0.6 billion. Sales volumes
increased, impacting revenue positively by approximately EUR 1.2 billion, mainly
driven by the major turnaround in Porvoo in 2024. Currency exchange rates as
well as lower trading volumes had an approximately EUR -0.8 billion negative
impact on the revenue.
The Group's comparable EBITDA was EUR 341 (240) million. Renewable Products'
comparable EBITDA was EUR 174 (152) million, a net positive development of
higher sales volume and lower sales margin compared to the second quarter of
2024. Oil Products' comparable EBITDA was EUR 135 (62) million, where the
positive effect from increased sales volumes more than offset the lower margin
compared to the second quarter of 2024. Marketing & Services comparable EBITDA
was EUR 32 (24) million. Comparable EBITDA for Others was EUR 2 (-1) million.
One-off costs related to organizational restructuring, totaling EUR 6 million,
were booked in the second quarter results. These one-off costs have been
eliminated from comparable EBITDA.
The Group EBITDA was EUR 246 (119) million, impacted by inventory valuation
losses of EUR 111 (losses 118) million, and changes in the fair value of open
commodity and currency derivatives totaling EUR 22 (-4) million. Profit before
income taxes was EUR -52 (-169) million, and net result EUR -36 (-144) million.
Earnings per share were EUR -0.05 (-0.19).
The Group's January-June 2025 results
Neste's revenue in the first six months totaled EUR 9,528 (9,443) million. Lower
prices had a negative impact of approximately EUR -1.3 billion. This was more
than compensated by volume increases in Renewable Products and Oil Products that
resulted in EUR 1.4 billion positive impact. Currency exchange rates as well as
lower trading price level in Oil Products had an approximately EUR -0.1 billion
negative impact on the revenue.
Group comparable EBITDA was EUR 551 (791) million. Renewable Products' January
-June comparable EBITDA was EUR 246 (394) million, impacted by lower sales
margins and higher sales volumes. Oil Products' comparable EBITDA was EUR 256
(339) million, driven by increased sales volumes and lower sales margin.
Marketing & Services comparable EBITDA was EUR 49 (47) million. Other's
comparable EBITDA was EUR -2 (8) million.
One-off costs related to organizational restructuring, totaling EUR 30 million,
were booked in the first six months results. These one-off costs have been
eliminated from comparable EBITDA.
Group EBITDA was EUR 446 (561) million, impacted by inventory valuation losses
of EUR -67 (-246) million and changes in the fair value of open commodity and
currency derivatives totaling EUR -8 (26) million. Profit before income taxes
was EUR -108 (20) million, and net result was EUR -76 (18) million. Earnings per
share were EUR -0.10 (0.02).
Outlook
Market outlook for 2025
The uncertainty in global trade and geopolitics and their impact on the global
economic outlook are causing market volatility. Markets for both renewable fuels
and oil products are sensitive to oil price development. The market in renewable
fuels is expected to remain oversupplied in 2025.
Guidance for 2025 (unchanged)
· Renewable Products' sales volumes in 2025 are expected to be higher than in
2024.
· Oil Products' sales volumes in 2025 are expected to be higher than in 2024.
Additional information
· There will be two scheduled maintenance turnarounds in 2025: a 6-week
(previously 5 weeks) turnaround in Rotterdam in Q4 2025 and a 6-week turnaround
starting in mid-December 2025 in Singapore. There are no planned turnarounds in
Porvoo in 2025.
· The Group's comparable total fixed costs in 2025 are expected to be below
2024 level excluding one-off costs.
· The Group's full-year 2025 cash-out capital expenditure excluding M&A is
estimated to be approximately EUR 1.0 - 1.2 billion (previously EUR 1.1 - 1.3
billion).
Conference call
A conference call in English for investors and analysts will be held on 24 July
2025, at 3 p.m. Finland / 1 p.m. London / 8 a.m. New York. In order to receive
the participant dial in numbers and a unique personal PIN, participants are
requested to register using this link: https://events.inderes.com/neste/q2
-2025/dial-in. The conference call can also be followed as a
webcast (https://neste.events.inderes.com/q2-2025).
Further information:
Heikki Malinen, President and CEO, tel. +358 10 458 11
Eeva Sipilä, Chief Financial Officer, tel. +358 40 727 6766
Anssi Tammilehto, SVP, Strategy, M&A and Investor Relations, tel. +358 50 458
8436
Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates solutions for mitigating climate change
and accelerating a shift to a circular economy. The company is the world's
leading producer of sustainable aviation fuel (SAF) and renewable diesel,
enabling its customers to reduce their greenhouse gas emissions. Neste refines
waste, residues and other renewable raw materials to high-quality renewable
fuels at its refineries located on three continents. The company's annual
renewable fuels production capacity will be increased to 6.8 million tons in
2027.
Neste has high standards for sustainability and the company has consistently
been recognized by several leading sustainability indices. In 2024, Neste's
revenue stood at EUR 20.6 billion. Read more: neste.com (http://www.neste.com)