Neste reports continued strong demand for renewable diesel

By Erin Voegele | July 27, 2021

Neste released financial results for the first half of 2021 on July 27, reporting solid performance for its renewable products segment. Demand for renewable diesel was robust, but feedstock markets were tight, the company reported.

Peter Vanacker, president and CEO of Neste, said that the company’s renewable products business segment continued to be resilient during the first half of the year and was able to maintain a healthy sales margin.

Neste’s renewable products segment posted a comparable operating profit of EUR 287 million for the second quarter he said, down from EUR 314 million during the same period of last year. “The renewable diesel demand was robust, but the feedstock markets remained very tight as expected,” he added. “We were able to reach a healthy comparable sales margin of USD 700/ton. Our sales volumes were 732,000 tons, impacted by the scheduled Porvoo units’ maintenance and postponement of some end-June deliveries. The Porvoo maintenance had a negative impact of approximately EUR 40 million on the segment’s comparable operating profit. Feedstock mix optimization continued, and the share of waste and residue inputs increased to 93 percent.”

Vanacker said work to expand renewables capacity at the Singapore refinery is proceeding according to schedule. “It should expand our annual renewables production capacity by up to 1.3 million tons during the first quarter of 2023,” he continued.

Neste is also progressing with work to increase the production capacity of sustainable aviation fuel (SAF) at the Rotterdam facility. That expansion project will allow the refinery to produce up to 500,000 tons of SAF annually by the end of 2023.  “We are now in the definition phase in preparation for a possible next renewable products refinery in Rotterdam, and aim at investment decision readiness late this year or early 2022,” Vanacker said.

Moving into the third quarter, Neste expects renewable diesel sales to be lower due to a large scheduled maintenance project scheduled at the Singapore refinery. The company also expects waste and residue markets to remain tight. Third quarter sales margins are expected to remain healthy, but lower than in the second quarter.

Renewable products comparable operating profit for the second quarter was EUR 287 million, down from EUR 314 million. Neste attributed the decrease to the weaker U.S. dollar and lower sales volumes. For the first six months of 2021, Neste rereported its renewable products segment achieved operating profit of EUR 580 million, down from EUR 644 million. The reduction is attributed primarily to the weaker U.S. dollar.

Neste reported revenue of EUR 3.022 billion for the second quarter of this year, up from EUR 2.542 billion during the same period of last year. Revenue for the first half of 2021 was at EUR 6.155 billion, up from EUR 5.842 billion reported for the same period of 2020.