Neste's Q1 profit declines amid weaker renewable fuels market
Neste Oyj reported a decrease in first-quarter profit, influenced by a weaker market for renewable diesel. Increased inventories and political strikes impacted cash flow.
Espoo, Finland – Neste Oyj's comparable earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to EUR 551 million in the first quarter of 2024, down from EUR 830 million in the same period last year. The company reported that political strikes in Finland had a negative impact of approximately EUR 10-15 million on its EBITDA.
The renewable products segment saw its comparable EBITDA drop to EUR 242 million from EUR 415 million a year prior. Neste attributed this to a significantly weaker market for renewable diesel, although sales volumes increased. The company also built up inventories for sustainable aviation fuel (SAF) production and prepared for upcoming major maintenance turnarounds.
In the oil products segment, comparable EBITDA was EUR 278 million, down from EUR 393 million. This was due to slightly lower refining margins and reduced sales volumes in anticipation of a planned refinery turnaround. The Porvoo refinery operated at a 91% utilization rate.
Neste is undergoing organizational changes aimed at improving cost efficiency, with projected annual savings of around EUR 50 million. The company's full-year guidance remains unchanged. Cash flow before financing activities was negative EUR 340 million, impacted by higher inventory levels.