MOSCOW (MRC) -- Biofuel producer and oil refiner Neste is "on the crest of a wave", its CEO said after the company set a December deadline for an investment decision on a new Singapore plant and posted quarterly results that sent its shares up by 9 percent, as per Reuters.
The Finnish company, which produces diesel and other fuels from renewable materials at plants in Singapore and Rotterdam, reported bigger than expected third-quarter profit thanks to progress at its renewables operation. "Renewable products exceeded the previous year's performance as a result of a favourable market and successful margin optimisation," CEO Matti Lievonen said in a statement.
Third-quarter core operating profit rose to 395 million euros (USD449 million) from 350 million euros in the same period last year, surpassing the consensus forecast of 356 million euros in a Reuters poll of analysts. Neste said it was on track for a "very strong" full year, though maintenance shutdowns will squeeze profit in the remainder of the year.
"This is a very strong result, especially in renewables ... they clearly succeeded in sales, production and raw material purchases in that business," said OP Bank analyst Henri Parkkinen, who has a "reduce" rating on the stock.
Neste, which also has two conventional oil refineries in Finland, is looking for future growth in renewable jet fuels and said it would make a final decision in December over its plan to build a new biofuel plant in Singapore. "We will decide in December," Lievonen told Reuters "We have been working on the investment constantly and spent tens of millions preparing."
The company had previously said it would make a final investment decision by the end of 2018. "Based on what's happening in the renewables market, that investment has always looked justified," said OP Bank's Parkkinen.
Neste CEO Lievonen says the company's strategy has been further supported by the much-publicised recent report from the United Nations Intergovernmental Panel on Climate Change (IPCC).
MRC