Economic|Interim reports
The company’s Board of Directors proposes to increase the dividend.
Elevated production costs and refinery shutdowns weighed on fuel refinery Neste’s results last year. The company’s comparable operating profit was EUR 1.342 billion, compared to EUR 1.416 billion in the previous year.
The decline in earnings comes from the production of renewable fuels, which is by far Neste’s most important business area in terms of earnings. The segment’s comparable operating profit decreased by almost EUR 100 million from the previous year to EUR 1.238 billion.
Sales volumes increased and sales margins improved, but earnings were eroded by the weakening U.S. dollar and rising fixed costs, the company says.
However, the result exceeded expectations. Analysts expected comparable operating profit of EUR 1.282 billion.
Neste’s net sales were EUR 15.148 billion, EUR 3.4 billion more than in the previous year. Net sales were boosted by rising market and sales prices, but at the same time the major shutdown at the Porvoo refinery significantly reduced sales volumes.
The company managing director Peter Vanacker describes the company as excellent, however.
“Our business proved to be very resilient in conditions determined by the continuation of the corona pandemic, planned maintenance work and high raw material and consumable costs,” Vanacker says in a company release.
According to Vanacker, demand for renewable diesel remained strong, but competition for raw materials continued to intensify.
“Despite the increase in raw material costs, we were able to continue to increase our comparable sales margin, which averaged $ 715 per tonne,” he says.
The company’s Board of Directors proposes to increase the dividend. It proposes that a dividend of EUR 0.82 per share, a total of EUR 630 million, be distributed to shareholders from last year’s result. A dividend of EUR 614 million was distributed from the previous year. The dividend will be paid in two installments.
With liquid significant investments are underway and pending.
The refinery investment in Singapore is progressing on schedule, with the expansion scheduled to begin in March 2023. The new production line in Singapore will allow the company to produce up to one million tons of renewable aviation fuel per year.
The company is also planning a major investment in Rotterdam, next to the existing refinery. According to the company, the project is still in the planning stage, and the final investment decision will be possible in the coming months.
The outlook is still difficult to predict due to the corona pandemic.
“We expect significant volatility in the markets for petroleum products and renewable raw materials to continue,” the financial statements state.
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