Loading prices...
SEATTLE (Oil Monster): Finnish energy company Neste (NESTE.HE) on Tuesday warned of a drop in sales and profit for the third quarter as it deals with higher feedstock and crude oil prices as well as planned refinery maintenance, sending its shares down more than 5%.
Major sources of biofuel feedstock such as waste and residue have seen a steady increase in prices, given the growing emphasis on renewable energy globally.
A rise in crude oil prices due to production cuts by the OPEC+ countries and recovering demand driven by the vaccine rollouts is also expected to weigh on its refining business.
The company, however, reported a rise in second-quarter operating profit, which rose to 463 million euros ($546.2 million) from 208 million euros a year ago on gains in inventory valuations.
The company's revenue also rose 17% to 3.02 billion euros, while analysts had expected it to drop to 2.55 billion euros.
While oil products accounted for just 8 million euros, renewable products, such as biodiesel and aviation fuel, turned an operating profit of 443 million euros.
However, when cleared from inventory valuation gains, comparable operating profit for renewable products fell 5.5% from a year earlier to 241 million euros.
The oil product unit saw its operating profit fall to 8 million euros from 40 million due to a 12-week maintenance turnover at Neste's oil refinery in Porvoo in southeast Finland.
It also said a turnaround at Neste's Singapore refinery will cut operating profit by 90 million euros and a catalyst change at its Rotterdam facility will lower operating profit by 50 million euros.
"These maintenance turnovers were known to happen which means the estimated drop in volumes is not a surprise," Inderes analyst Petri told Reuters.
Gostowski does not see the slight drop in comparable operating profit as very significant, but said shareholders may have reacted to the vague outlook on a decrease in margins and volumes.
Courtesy: www.reuters.com
MemberFull access to:
$49 USD/MONTH
