Neste experienced a noticeable decline in their comparable EBITDA at the end of 2023 compared to the previous year.
The liquid comparable EBITDA slightly surpassed expectations at the end of the year, reporting 797 million euros for the period of October through December.
EBITDA, the company’s actual operating profit before depreciation, financing items, and taxes, is a key indicator of business performance.
Analysts had projected the company’s comparable EBITDA to hold steady at EUR 784 million.
Despite this, there was a sharp decrease in EBITDA from the previous year. In the midst of an energy crisis at the end of 2022, Neste’s comparable EBITDA reached as high as 894 million euros.
For the past year, Neste’s board of directors suggests a dividend of 1.2 euros per share, a lower amount than anticipated. Analysts had predicted a dividend proposal of 1.4 euros per share.
The results were met with disappointment from investors, causing the stock to drop nearly 12 percent in the first 15 minutes of trading.
During the October to December period, the total refining margin of petroleum products was 18.9 dollars per barrel. This is down from the previous year’s margin of 23.5 dollars per barrel. The energy crisis sparked by Russian aggression pushed the margin up to 30 dollars per barrel in 2022.
The company’s renewable products had a comparable sales margin of 813 dollars per ton, an increase from USD 755 per ton the previous year.
CEO Matti Lehmus cited geopolitical tensions and high inflation as major influences on the past year. Lehmus shared that the most favorable market conditions were in the July to September period. However, the market weakened towards the end of the year, especially for renewable products.
Neste anticipates that the total sales volume of renewable products will rise to roughly 4.4 million tons this year. Last year, the sales volumes of renewable diesel and renewable jet fuel were about 3.3 million tons.
Sales volume for renewable aviation fuel is projected to be around 0.5–1.0 million tons this year. Last year, approximately 843,000 tons of renewable diesel and jet fuel were sold.
Due to the planned major shutdown of the Porvoo refinery in the second quarter of the year, Neste expects a decrease in the total sales volume of petroleum products compared to last year. Consequently, the total refining margin of oil products is also expected to drop.
The shutdown is forecasted to cost EUR 390 million, with an impact of approximately EUR 190 million on comparable EBITDA in oil products and around EUR 40 million in renewable products.
Neste also reported that a two-day strike at the start of February impacted customer deliveries at the Porvoo refinery. The strike affected production for a period of 5–7 days.