London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950
info@mrcplast.com

Our Clients

Order Informer

 
Home > News >
 

Renewables niche reaps profits for Finnish refiner Neste

February 15/2019

MOSCOW (MRC) -- Biofuel producer and oil refiner Neste reported a bigger than expected fourth-quarter profit after seeing robust demand for its renewables fuels, which it expects will continue to grow, reported Reuters.

The Finnish company, which produces diesel and other fuels from renewable materials at plants in Singapore and Rotterdam, said sales at its renewables business in the first quarter would likely surpass those of the fourth quarter of 2018, adding that utilization rates would be high.

Chief Executive Peter Vanacker said the companys main growth drivers going forward would be rising jet fuel sales, and marine fuel sales as shipping companies prepare for new sulfur emissions rules coming into force in 2020.

"In 2018, we have already produced the first 5,000 tonnes of renewable jet fuel and we see a big market coming up in the aviation industry," Vanacker told Reuters in a phone interview.

Nestes cooperation with furniture giant Ikea on bio-based plastics, announced last June, would be another growth area, he said.

The companys shares rose as much as 6 percent after its results and were up 4 percent at 85.46 euros by 1343 GMT.

Neste, which also has two conventional oil refineries in Finland, said margins for its oil products business would be low in the first quarter due to a weak gasoline market, but would strengthen towards the end of that period.

Renewables account for 70 percent of group profits and Neste said its total fourth-quarter core operating profit rose 12 percent to 349 million euros (USD398 million), beating analysts average expectation of 321 million in a Reuters poll.

Operating profit at its renewables operations rose to 281 million euros, beating analysts forecasts in the poll, which ranged from 198 million to 258 million.

Neste announced in December plans to build a new 1.4 billion euro refinery in Singapore, expecting to expand its total renewables production capacity to 4.5 million tonnes annually by 2022 from 2.7 million tonnes currently.

"As you can see from the Singapore investment, quite a lot of our efforts are going into expansion in the renewables space where we still see quite a lot of opportunities for the future," Vanacker said.

Neste said its cooperation with Ikea aimed "to utilize renewable residue and waste raw materials as well as sustainably produced vegetable oils in the production of plastic products".

The company sees room for growth in its marine fuel business ahead of the new sulfur emissions limits, which will fall to 0.5 percent in bunker fuel from 3.5 percent currently.

"We are very well positioned because here in the Baltic Sea the regulation is already even lower than 0.5 percent, its 0.1 percent," Vanacker said, referring to the new emissions limit for ships.

"This will have a positive influence on our additional margin," he said, adding some industry consultants has estimated the effect at between USD1.8 and USD2 per barrel.

As MRC wrote before, Neste Oyj and Borealis Polymers Oy, in co-operation with the energy companies Fortum Power and Heat Oy, Helen Oy, Vantaan Energia Oy and Porvoon Energia Oy - Borga Energi Ab, will conduct a preliminary study on recovering and utilizing excess heat generated at the Neste and Borealis industrial manufacturing facilities in Kilpilahti, as per Neste's summer 2018 press release. The study will focus on the technical and economic impacts of recovering excess heat at these facilities and recirculating it into district heating systems in Porvoo and the Helsinki metropolitan region.

Neste (NESTE, Nasdaq Helsinki) creates sustainable solutions for transport, business, and consumer needs. The company's wide range of renewable products enable our customers to reduce climate emissions. The company is the world's largest producer of renewable diesel refined from waste and residues, introducing  renewable solutions also to the aviation and plastics industries. It is also a technologically advanced refiner of high-quality oil products.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, Borealis, Neste oil, Finland.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe