Neste Corporation, Half-year financial report, 24 July 2025 at 9 a.m. (EET)
Reliable operations with improved results, performance improvement program delivering
Second quarter in brief:
- Comparable EBITDA totaled EUR 341 (240) million
- EBITDA totaled EUR 246 (119) million
- Renewable Products' comparable sales margin was USD 361 (382)/ton
- Oil Products' total refining margin was USD 10.0 (15.1)/bbl
- Cash flow before financing activities was EUR 226 (-466) million
January-June in brief:
- Comparable EBITDA totaled EUR 551 (791) million
- EBITDA totaled EUR 446 (561) million
- Cash flow before financing activities was EUR 0 (-819) million
- Cash-out investments were EUR 499 (758) million
- Leverage ratio was 37.8% at the end of June (31.12.2024: 36.1%)
- Comparable earnings per share: EUR 0.02 (0.28)
- Earnings per share: EUR -0.10 (0.02)
Figures in parentheses refer to the corresponding period for 2024, unless otherwise stated.
President and CEO Heikki Malinen:
"During the second quarter, we succeeded in running our operations safely and reliably. We saw positive developments in the biofuel regulation both in the US and EU, largely supporting long-term renewables demand. However, the market environment was volatile as geopolitical and global trade tensions continued to impact commodity prices and exchange rates, and we expect this to continue. In late June, the geopolitical events affected the oil markets and especially the increased middle distillate prices had a positive impact on our quarterly results.
We continue our measures to improve our financial performance. Our comparable EBITDA in the second quarter reached EUR 341 (240) million and cash flow before financing activities was EUR 226 (-466) million. The program to enhance our cost competitiveness, production reliability and commercial performance globally continues to deliver results. We have been able to generate EUR 107 million EBITDA run rate impact by the end of the second quarter. Our improved working capital efficiency supported cash flow generation. Our leverage ratio was 37.8%, in line with our financial target.
In Renewable Products, our comparable EBITDA totaled EUR 174 (152) million in the second quarter, thanks to increased sales volumes despite weaker margins year-over-year. Our comparable sales margin was USD 361 (382)/ton while sales volume increased to 1,096 (955) thousand tons, a new quarterly record. We succeeded in leveraging our global commercial presence and maintained high utilization rates at all refineries. Our sustainable aviation fuel (SAF) sales increased close to 80% quarter on quarter, benefitting from additional SAF production capacity at our renewables refinery in Rotterdam, the Netherlands. During the second quarter, we strengthened our collaboration with many of our customers, including Amazon Air and FedEx.
In Oil Products, comparable EBITDA totaled EUR 135 (62) million in the second quarter. Operations were solid and sales volumes increased to 3,021 (1,524) thousand tons as the 2024 comparison period was affected by a turnaround in Porvoo. The total refining margin was low at USD 10.0 (15.1)/bbl, affected negatively by higher supply costs and a tougher gasoline export market.
In Marketing & Services, our comparable EBITDA was EUR 32 (24) million in the second quarter. Lower volumes in the main markets were balanced by successful commercial operations.
Our strategic growth investment project in Rotterdam is proceeding according to the updated plan. When completed in 2027, the refinery will be the world's largest facility producing renewable diesel and SAF. It is optimally located to serve the growing European markets.
We at Neste have invested heavily to contribute to the implementation of renewable fuels mandates, such as ReFuelEU Aviation and Renewable Energy Directive (RED III). National implementation of RED III is taking place in many European countries, bringing much needed predictability. For example in Germany, the key proposals would have a positive impact on biofuels demand. Our flexibility to switch between road and aviation renewable fuel products according to the market demand is an important capability in the current market environment.
We are determined to improve our performance and are on the right track to deliver. However, the markets continue to be challenging. In the current uncertain and volatile operating environment, our top priority is to further improve our competitiveness and financial position. We still have a lot of work ahead of us, but I am confident in our actions and the Neste team's ability to drive the required performance improvement."
The Group's second-quarter 2025 results
Neste's revenue in the second quarter totaled EUR 4,511 (4,642) million. Lower market prices had a negative impact of EUR -0.6 billion. Sales volumes increased, impacting revenue positively by approximately EUR 1.2 billion, mainly driven by the major turnaround in Porvoo in 2024. Currency exchange rates as well as lower trading volumes had an approximately EUR -0.8 billion negative impact on the revenue.
The Group's comparable EBITDA was EUR 341 (240) million. Renewable Products' comparable EBITDA was EUR 174 (152) million, a net positive development of higher sales volume and lower sales margin compared to the second quarter of 2024. Oil Products' comparable EBITDA was EUR 135 (62) million, where the positive effect from increased sales volumes more than offset the lower margin compared to the second quarter of 2024. Marketing & Services comparable EBITDA was EUR 32 (24) million. Comparable EBITDA for Others was EUR 2 (-1) million.
One-off costs related to organizational restructuring, totaling EUR 6 million, were booked in the second quarter results. These one-off costs have been eliminated from comparable EBITDA.
The Group EBITDA was EUR 246 (119) million, impacted by inventory valuation losses of EUR 111 (losses 118) million, and changes in the fair value of open commodity and currency derivatives totaling EUR 22 (-4) million. Profit before income taxes was EUR -52 (-169) million, and net result EUR -36 (-144) million. Earnings per share were EUR -0.05 (-0.19).
The Group's January-June 2025 results
Neste's revenue in the first six months totaled EUR 9,528 (9,443) million. Lower prices had a negative impact of approximately EUR -1.3 billion. This was more than compensated by volume increases in Renewable Products and Oil Products that resulted in EUR 1.4 billion positive impact. Currency exchange rates as well as lower trading price level in Oil Products had an approximately EUR -0.1 billion negative impact on the revenue.
Group comparable EBITDA was EUR 551 (791) million. Renewable Products' January-June comparable EBITDA was EUR 246 (394) million, impacted by lower sales margins and higher sales volumes. Oil Products' comparable EBITDA was EUR 256 (339) million, driven by increased sales volumes and lower sales margin. Marketing & Services comparable EBITDA was EUR 49 (47) million. Other's comparable EBITDA was EUR -2 (8) million.
One-off costs related to organizational restructuring, totaling EUR 30 million, were booked in the first six months results. These one-off costs have been eliminated from comparable EBITDA.
Group EBITDA was EUR 446 (561) million, impacted by inventory valuation losses of EUR -67 (-246) million and changes in the fair value of open commodity and currency derivatives totaling EUR -8 (26) million. Profit before income taxes was EUR -108 (20) million, and net result was EUR -76 (18) million. Earnings per share were EUR -0.10 (0.02).
Outlook
Market outlook for 2025
The uncertainty in global trade and geopolitics and their impact on the global economic outlook are causing market volatility. Markets for both renewable fuels and oil products are sensitive to oil price development. The market in renewable fuels is expected to remain oversupplied in 2025.
Guidance for 2025 (unchanged)
- Renewable Products' sales volumes in 2025 are expected to be higher than in 2024.
- Oil Products' sales volumes in 2025 are expected to be higher than in 2024.
Additional information
- There will be two scheduled maintenance turnarounds in 2025: a 6-week (previously 5 weeks) turnaround in Rotterdam in Q4 2025 and a 6-week turnaround starting in mid-December 2025 in Singapore. There are no planned turnarounds in Porvoo in 2025.
- The Group's comparable total fixed costs in 2025 are expected to be below 2024 level excluding one-off costs.
- The Group's full-year 2025 cash-out capital expenditure excluding M&A is estimated to be approximately EUR 1.0 - 1.2 billion (previously EUR 1.1 - 1.3 billion).
Conference call
A conference call in English for investors and analysts will be held on 24 July 2025, at 3 p.m. Finland / 1 p.m. London / 8 a.m. New York. In order to receive the participant dial in numbers and a unique personal PIN, participants are requested to register using this link: https://events.inderes.com/neste/q2-2025/dial-in. The conference call can also be followed as a webcast.
Further information:
Heikki Malinen, President and CEO, tel. +358 10 458 11
Eeva Sipilä, Chief Financial Officer, tel. +358 40 727 6766
Anssi Tammilehto, SVP, Strategy, M&A and Investor Relations, tel. +358 50 458 8436
Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates solutions for mitigating climate change and accelerating a shift to a circular economy. The company is the world's leading producer of sustainable aviation fuel (SAF) and renewable diesel, enabling its customers to reduce their greenhouse gas emissions. Neste refines waste, residues and other renewable raw materials to high-quality renewable fuels at its refineries located on three continents. The company's annual renewable fuels production capacity will be increased to 6.8 million tons in 2027.
Neste has high standards for sustainability and the company has consistently been recognized by several leading sustainability indices. In 2024, Neste's revenue stood at EUR 20.6 billion. Read more: neste.com
