Neste Oil reports strong Q2 performance in renewable fuel segment
Neste Oil has released its interim financial report for the first six months of 2013, reporting continuing good performance in its renewable fuels segment. The company’s operating profit for the first half of the year was €223 million ($295.65 million), up from €119 million during the same period of 2012. On a quarterly basis, Neste Oil reported an operating profit of €88 million for the second quarter of 2013, compared to €40 million for the same quarter of last year.
“We recorded a solid result during the second quarter. The group's comparable operating profit was EUR 88 million, largely thanks to good performance at Renewable Fuels. Our leverage ratio also improved as a result of strong cash flow from operations,” said Matti Lievonen, president and CEO of Neste Oil.
Lievonen added that renewable fuels continued to make very good progress during the first half of the year, recording an operating profit of €33 million. “The market fundamentals remained favorable and we continued to make good progress on our entry into the North American market. Also our efforts to extend feedstock range and flexibility were successful. Overall, we are positive about the Renewable Fuels business going forward,” he said.
According to information released by Neste Oil, renewable diesel demand to be stable during the second half of this year. In its financial release, the company also noted that its focus in the renewable fuels segment will continue to be on sales, feedstock and production optimization.
Neste Oil has also announced it is participating in a 1-year fleet demonstration program for a new diesel blend in Corburg, Germany. The new blend of fuel, known as Diesel R33, will contain 26 percent Neste Oil’s NExBTL renewable diesel, 7 percent conventional biodiesel, and 67 percent fossil diesel.
While the European Union limits the blend of biodiesel to 7 percent, there is no such limit for renewable diesel. "Unlike conventional biodiesel, there are no technical limitations to blending Neste Oil's NExBTL renewable diesel, which opens up the potential for creating diesel blends that have high bio content and result in lower GHG and tailpipe emissions," said Kaisa Hietala, Neste Oil vice president of Renewable Fuels.
According to Neste oil, the demonstration project will include approximately 280 types of vehicles, including buses, cars and trucks. It will test the performance of the Diesel R33 blend in traffic and the contribution it makes to reducing tailpipe emissions and greenhouse gas emissions.
The project is a follow-up to a trail conducted in 2010 and 2011, and is financed by Bavarian State Ministry of the Environment and Public Health, the European Union, and various other partners. In addition to Neste Oil, the project's partners include German universities, research institutions, automotive manufacturers, and other companies.
In late July, Neste Oil also announced it had added corn oil to the feedstocks used to produce NExBTL. According to information published by the company, Neste Oil trailed the use of corn oil earlier this year and has determined the feedstocks meets the company’s strict sustainability criteria. Technical corn oil is now being used on a commercial basis, with feedstock supplies currently sourced from the U.S.
"Our strategic aim is to constantly extend the range of renewable feedstocks we use to produce renewable fuels, and in particular the volume of waste- and residue-based materials we use," said Matti Lehmus, Neste Oil executive vice p resident, of oil products and renewables. "Technical corn oil is an excellent addition to our feedstock base, as it is officially approved for producing renewable fuel intended for the growing North American market."