trending Market Intelligence /marketintelligence/en/news-insights/trending/os1wiqnsfixavnu-yo7i6g2 content esgSubNav
In This List

Neste's revenue rises on higher sales prices, volumes; profit declines 6.9%

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Volume of Investment Research Reports on Inflation Increased in Q4 2021

Blog

Price wars in India: Disney+ Hotstar vs. Amazon Prime Video vs. Netflix

Blog

Using ESG Analysis to Support a Sustainable Future


Neste's revenue rises on higher sales prices, volumes; profit declines 6.9%

Neste Oyj's profit declined 6.9% in the fourth quarter of 2017 from a year earlier, but revenue rose 6.3% year over year because of higher sales prices and volumes.

The oil refining and marketing company reported profit attributable to owners of €244 million, or a diluted 96 euro cents per share, for the fourth quarter of 2017, down from €262 million, or €1.02 per share, in the year-ago quarter.

Operating profit decreased 2.0% year over year to €296 million from €302 million in the year-ago quarter. The company said it was impacted by inventory losses of €1.0 million and a €13 million fall in the fair value of open commodity and currency derivatives mainly related to the hedging of inventories.

Neste's revenue rose 6.3% year over year to €3.64 billion from €3.42 billion because of higher sales prices and sales volumes which together had a positive impact of about €400 million that more than offset a negative impact of approximately €200 million due to a weaker U.S.-dollar exchange rate.

Operating profit of the company's renewable products segment decreased to €144 million from €158 million in the year-ago quarter. The segment's revenue increased 6.2% year over year to €924 million from €870 million as sales volumes reached a new quarterly record of 713,000 tons, up 8% from the year-ago quarter.

The oil products segment's operating profit increased to €140 million from €126 million in the year-ago period because of higher sales and a strong additional margin of US$5.40 per barrel due to improved operational performance. The segment's revenue rose 9.1% year over year to €2.36 billion from €2.16 billion.

Operating profit of the marketing and services business declined to €11 million from €19 million, but the segment's revenue increased to €1.03 billion from €964 million.

For full year 2017, the company reported profit attributable to owners of €911 million, or €3.55 per share, down from €939 million, or €3.66 per share, in 2016.

Neste expects the oil, renewable fuel and feedstock markets to remain volatile in 2018 against the backdrop of a weak U.S. dollar. It projects strong demand for oil in 2018 due to solid macroeconomic growth and said the extension of OPEC's production cuts into 2018 should support crude oil price and market structure in the first half of the year.

Market volatility in feedstock prices is expected to affect the profitability of its renewable products segment. The reference margin of the company's oil products business in early 2018 is expected to be below the 2017 average and the sales volumes and unit margins of its marketing and services segment should follow the seasonal pattern of previous years.