Neste release Interim Report for 1st Qtr. 2021
Neste’s revenue in the first quarter totalled EUR 3,132 million (3,270 million). The change in revenue resulted from higher prices, which had a positive impact approx. EUR 500 million, and lower sales volumes, which had a negative impact of approx. EUR 400 million. Additionally, a weaker US dollar had a negative impact of approx. EUR 200 million on the revenue compared to the corresponding period last year.
The Group’s comparable operating profit was EUR 302 million (408 million). Renewable Products’ comparable operating profit decreased to EUR 294 million (329 million), mainly due to the weaker US dollar than in the first quarter of 2020. Oil Products’ comparable operating profit decreased to EUR -8 million (74 million), due to the continued weak refining market. Marketing & Services comparable operating profit was EUR 16 million (8 million), as a result of higher unit margins compared to the first quarter of 2020. The Others segment’s comparable operating profit was EUR -1 million (-9 million).
The Group’s operating profit was EUR 458 million (197 million), which was impacted by inventory valuation gains of EUR 175 million (losses of 293 million), and changes in the fair value of open commodity and currency derivatives totaling EUR -20 million (82 million), mainly related to margin hedging. Profit before income taxes was EUR 415 million (203 million), and net profit EUR 374 million (201 million). Comparable earnings per share were EUR 0.31 (0.50), and earnings per share EUR 0.49 (0.26).
President and CEO Peter Vanacker, Comments;
Renewable Products posted a comparable operating profit of EUR 294 million (EUR 329 million) in the first quarter. The renewable diesel demand was robust, but the feedstock markets remained very tight. In this market situation we were very pleased to reach a healthy comparable sales margin of USD 699/ton, which was higher than in the corresponding period last year. As communicated earlier, we expect a lower contribution from margin hedging compared to 2020, which was an exceptional year. Our global sales volume allocation optimization model enabled us to deliver again good results. Our sales volumes were 743,000 tons, slightly higher than in the corresponding period last year. A weaker US dollar had a negative impact of EUR 37 million on the segment’s comparable operating profit year-on-year. During the first quarter our renewables production facilities operated at an average 104% utilization rate, and reached a new quarterly production record of 829,000 tons. Feedstock mix optimization continued, and the share of waste and residue inputs increased to 90%.
Oil Products posted a comparable operating profit of EUR -8 million (EUR 74 million) in the first quarter. The reference margin, reflecting the general market conditions, was still weak due to the COVID-19 pandemic. The reference margin was significantly lower than in the corresponding period last year, which had a negative impact of EUR 59 million on the comparable operating profit. Sales volumes were also about 18% lower than in the first quarter of 2020 due to lower demand and preparations for the Porvoo refinery major turnaround, and the Naantali refinery closure in March. The lower sales volumes had a negative impact of EUR 38 million on the comparable operating profit year-on-year. Our short-term cost reduction measures were effective.
Marketing & Services generated a comparable operating profit of EUR 16 million (EUR 8 million) in the first quarter. Although sales volumes were still impacted by the COVID-19 related restrictions, we were able to increase our unit margins, which, together with good cost management lead to an improved result.
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