Neste provides Financial Report for January-June 2020

Neste provides Financial Report for January-June 2020

Another strong quarter in Renewable Products while Oil Products was hit by an unprecedentedly weak refining market


Comparable operating profit totaled EUR 663 million (EUR 746 million)
Operating profit totaled EUR 405 million (EUR 741 million)
Cash flow before financing activities was EUR -366 million (EUR 140 million)
Cash-out investments were EUR 555 million (EUR 189 million)
Return on average capital employed (ROACE) was 24.5% over the last 12 months (2019: 26.6%)
Leverage ratio was 8.8% at the end of June (31.12.2019: -3.3%)
Comparable earnings per share: EUR 0.76 (EUR 0.77)
Earnings per share: EUR 0.47 (EUR 0.77)

The Group’s January–June 2020 results

Neste’s revenue in the first six months totaled EUR 5,842 million (7,826 million). The revenue decline mainly resulted from the lower crude oil price, which had a negative impact of approx. EUR 1.6 billion, and lower sales volumes of oil products, which had a negative impact of approx. EUR 500 million on the revenue. A stronger US dollar had a positive impact of approx. EUR 100 million on the revenue.


The Group’s comparable operating profit was EUR 663 million (746 million). Renewable Products’ six-month comparable operating profit was EUR 644 million (623 million), supported by higher sales volumes and a stronger US dollar than in the corresponding period of 2019.


Oil Products’ comparable operating profit was EUR 14 million (156 million), mainly due the exceptionally weak refining market and the planned refinery maintenance. Marketing & Services comparable operating profit was EUR 27 million (38 million), mainly due to lower sales volumes compared to the first half of 2019 and divestment of the Russian business.


The Others segment’s comparable operating profit of EUR -25 million (-71 million) was significantly better than in the corresponding period of 2019, mainly as a result of the minority shareholding in Nynas having been fully written-off in 2019.


The Group’s operating profit was EUR 405 million (741 million), which was impacted by inventory valuation losses of EUR 166 million (gains of 108 million), and changes in the fair value of open commodity and currency derivatives totaling EUR -91 million (-118 million), mainly related to inventory hedging. Profit before income taxes was EUR 400 million (696 million), and net profit EUR 362 million (588 million). Comparable earnings per share were EUR 0.76 (0.77), and earnings per share EUR 0.47 (0.77).


Second quarter in brief:

Comparable operating profit totaled EUR 255 million (EUR 367 million)
Operating profit totaled EUR 208 million (EUR 359 million)
Renewable Products’ comparable sales margin, including BTC, was USD 625/ton (USD 674/ton)
Oil Products’ total refining margin was USD 4.76/bbl (USD 9.42/bbl)
Cash flow before financing activities was EUR -246 million (EUR 132 million)


Neste’s revenue in the second quarter totaled EUR 2,572 million (4,057 million). The revenue decline mainly resulted from the lower crude oil price, which had a negative impact of approx. EUR 1.1 billion, and lower sales volumes of oil products, which had a negative impact of approx. EUR 400 million on the revenue.


The Group’s comparable operating profit was EUR 255 million (367 million). Renewable Products’ comparable operating profit was EUR 314 million (286 million), showing the segment’s resilience in the turbulent market. Oil Products’ comparable operating profit was EUR -60 million (83 million), mainly due to the unprecedentedly weak refining market caused by the COVID-19 pandemic. Marketing & Services comparable operating profit was EUR 19 million (25 million), mainly as a result of the divestment of the Russian business in the late 2019.


The Others segment’s comparable operating profit of EUR -16 million (-28 million) was better than in the corresponding period of 2019, mainly as a result of the minority shareholding in Nynas having been fully written-off in 2019.


The Group’s operating profit was EUR 208 million (359 million), which was impacted by inventory valuation gains of EUR 127 million (36 million), and changes in the fair value of open commodity and currency derivatives totaling EUR -172 million (-30 million), mainly related to inventory and margin hedging. Profit before income taxes was EUR 197 million (347 million), and net profit EUR 161 million (294 million). Comparable earnings per share were EUR 0.26 (0.40), and earnings per share EUR 0.21 (0.38).

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Source: Neste


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