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Investing.com -- Shares of Neste Oyj (HE:NESTE) surged 12% following the announcement of its first-quarter earnings, which revealed a renewable product (RP) margin significantly exceeding market expectations.
While the group’s EBITDA of €210 million was in line with consensus, the RP margin reached $310 per ton, surpassing the anticipated $242 per ton.
In the first quarter, Neste’s performance was bolstered by its renewable products, which outperformed despite a weaker showing in its oil products (OP) segment. The reported RP margin of $310 per ton exceeded consensus estimates.
Despite a quarter-over-quarter decrease in sustainable aviation fuel (SAF) sales volume to 130 kilotons, Neste’s SAF production more than doubled in the same period.
The U.S. volume mix for the first quarter stood at 31%, which includes both renewable diesel (RD) and SAF, marking a decrease from the anticipated 2024 average of approximately 50%.
Looking ahead, Neste has maintained its guidance for fiscal year 2025, with expectations for higher RP and OP volumes compared to 2024 and total fixed costs projected to be below the 2024 figures.
Capital expenditures, excluding mergers and acquisitions, are estimated to be in the range of €1.1 to €1.3 billion.
"While the results were mixed in different segments, we think the better-than-expected $310/ton RP margin is an important reference point for 2025, especially in the context of significant market uncertainty and lack of company guidance," Barclays (LON:BARC) analysts commented.
"This provides confidence for the near-term outlook, together with expectation that SAF demand could improve in 2H."