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2015-04-24

Neste Oil Oyj: Neste Oil's Interim Report for January-March 2015

Neste Oil Corporation

Interim Report
24 April 2015 at 9 am. (EET)

Neste Oil's Interim Report for January-March 2015

Excellent start for the year as a result of strong refining market and good
internal performance

First quarter in brief:

·Comparable operating profit totaled EUR 215 million (Q1/2014: EUR 50 million)
·Total refining margin was USD 11.66/bbl (Q1/2014: USD 8.44/bbl)
· Renewable Products' comparable sales margin was USD 205/ton (Q1/2014: USD
182/ton)
· Net cash from operations totaled EUR -185 million (Q1/2014: EUR -178
million)
· Return on average capital employed (ROACE) was 12.6% (2014: 10.1%)
· Full-year 2015 guidance revised upwards on 21 April

President&CEO Matti Lievonen:

"The year has started positively in a very favorable refining margin
environment. We are also pleased with the internal performance in all our
business areas. Neste Oil recorded a strong comparable operating profit of
EUR 215 million during the first quarter, compared to the EUR 50 million
during the corresponding period last year.

Oil Products generated a high comparable operating profit of EUR 156 million,
compared to EUR 32 million in the first quarter of 2014. Neste Oil's
reference margin strengthened during the first quarter, and averaged USD
7.5/bbl. Reference margin ended USD 4.1/bbl higher than in the corresponding
period last year. Gasoline margins were particularly strong, supported by
weak crude oil market, good demand, contango storage building, strikes and
refinery outages in the US. Our Porvoo refinery operated at a high
utilization rate, and preparations for the major turnaround proceeded
according to plan.

Renewable Products recorded a comparable operating profit of EUR 42 million,
compared to EUR 12 million in the first quarter of 2014. Renewable Products'
reference margin remained clearly below the levels seen during the
corresponding period last year. We were able to maintain our additional
margin at a good level by successful margin management and feedstock
flexibility. Weaker euro also had a positive effect on our result. Our sales
volume increased by 5% from the first quarter of 2014. After successful
debottlenecking in 2014, we have increased our renewable diesel nameplate
production capacity from 2.0 million to 2.4 million tons per year, which has
also lead to lower production costs.

Oil Retail's markets continued competitive, but we were able to increase
profits by introducing new products, such as low sulphur marine fuel, and by
improving margins particularly in Northwest Russia. The segment generated a
comparable operating profit of EUR 17 million, higher than the EUR 14 million
booked in the first quarter of 2014.

As a result of the strong performance during the first quarter and based on
the current market outlook for the remainder of the year, Neste Oil revised
its guidance on 21 April, and now estimates the Group's full-year 2015
comparable operating profit to remain robust and to be higher than that
reached in 2014. Previously Neste Oil expected the full-year comparable
operating profit to remain robust, although probably lower than that reached
in 2014.

On 1 April the Annual General Meeting decided the company name to be Neste
Corporation from the beginning of June. Therefore, this will be the last
interim report under Neste Oil name. During the recent years our company has
changed remarkably, and the new name reflects this change. We are moving
forward."

The Group's first-quarter 2015 results

Neste Oil's revenue in the first quarter totaled EUR 2,744 million (EUR 3,510
million). The decrease mainly resulted from lower overall sales prices due to
the oil price decline. All segments improved their result from the first
quarter of 2014, and the Group's comparable operating profit came in at EUR
215 million (EUR 50 million). Oil Products' result was positively impacted by
reference refining margins, which were clearly higher than in the first
quarter of 2014. Also Renewable Products improved as a result of successful
margin management, feedstock optimization and favorable USD/EUR exchange
rate. Oil Retail's result was positively impacted by higher margins,
particularly in Northwest Russia. The Others segment recorded a higher
comparable operating profit compared to the first quarter of 2014.

Oil Products' first-quarter comparable operating profit was EUR 156 million
(32 million), Renewable Products' EUR 42 million (12 million), and Oil
Retail's EUR 17 million (14 million). The comparable operating profit of the
Others segment totaled EUR 3 million (-11 million).

The Group's IFRS operating profit was EUR 233 million (50 million), which was
impacted by inventory losses totaling EUR 76 million (3 million), changes in
the fair value of open oil derivatives totaling EUR 18 million (5 million),
and non-recurring items totaling EUR 77 million (-2 million), mainly related
to the capital gain from the disposal of the Porvoo electricity grid. Pre-tax
profit was EUR 205 million (33 million), profit for the period

EUR 181 million (26 million), and earnings per share EUR 0.70 (0.10). The
Group's effective tax rate was 12% (21%) mainly due to the tax-exempt items,
such as the sale proceeds of the shares of Kilpilahden Sähkönsiirto Oy,
electricity grid company.

Outlook

Developments in the global economy have been reflected in the oil, renewable
fuel, and renewable feedstock markets; and volatility in these markets is
expected to continue.

Global oil demand is anticipated to continue increasing with growth estimates
generally at approx. 1 million bbl/d for 2015. At the same time, refining
capacity growth of more than 1 million bbl/d in Asia and Middle East is
expected to create some pressure on global product supply demand balance
particularly during the second half of the year. Transatlantic supply demand
balance is also dependent on the planned and unplanned refinery shutdowns.
The forward reference refining margin is currently reasonably strong for the
coming quarters, also reflecting the upcoming driving season, which typically
supports the gasoline market in spring.

Vegetable oil price differentials are expected to vary, depending on crop
outlooks, weather phenomena, and variations in demand for different
feedstocks, but no fundamental changes in the drivers influencing long-term
average feedstock price differentials are expected. Feedstock prices have
been on a downward trend, but vegetable oil price differentials have remained
narrower than the historical average. Market volatility in feedstock and oil
prices is expected to continue, which will have an impact on the Renewable
Products segment's profitability.

In 2015, the Group's investments are expected to total approx. EUR 450
million, including some EUR 100 million for a major turnaround at the Porvoo
refinery. The Porvoo turnaround has started in April and is expected to last
for approx. 8 weeks. The turnaround is expected to have an approx. EUR 100
million negative impact on Oil Products segment's comparable operating
profit.

Crude oil price changes, supply and demand balances, together with
uncertainties related to political decision-making on biofuel mandates, the
US Blender's Tax Credit and other incentives will be reflected in the oil and
renewable fuel markets. The US Environmental Protection Agency (EPA) has
announced that it will propose Renewable Fuel Standard volume requirements
for 2014, 2015 and 2016, as well as the biomass-based diesel volume
requirement for 2017, by 1 June, and finalize them by 30 November, 2015.

As a result of the strong performance during the first quarter and based on
the current market outlook for the remainder of the year, Neste Oil revised
its guidance on 21 April and now estimates the Group's full-year 2015
comparable operating profit to remain robust and to be higher than that
reached in 2014. Previously Neste Oil expected the full-year comparable
operating profit to remain robust, although probably lower than that reached
in 2014.

Further information:

Matti Lievonen, President&CEO, tel. +358 10 458 11
Jyrki Mäki-Kala, CFO, tel. +358 10 458 4098
Investor Relations, tel. +358 10 458 5292

News conference and conference call

A press conference in Finnish on first-quarter 2015 results will be held
today, 24 April 2015, at 11:30 a.m. EET at the company's headquarters at
Keilaranta 21, Espoo.www.nesteoil.comwill feature English versions of the
presentation materials. A conference call in English for investors and
analysts will be held on 24 April 2015 at 3 p.m. Finland / 1 p.m. London / 8
a.m. New York. The call-in numbers are as follows: Finland: +358 (0)9 6937
9590, rest of Europe: +44 (0)20 3427 1909, US: +1646 254 3364, using access
code 8790300. The conference call can be followed at the company'sweb site.
An instant replay of the call will be available until 1 May 2015 at +358 (0)9
2310 1650 for Finland, +44 (0)20 3427 0598 for Europe and +1 347 366 9565 for
the US, using access code 8790300.

Neste Oil in brief

Neste Oil Corporation is a refining and marketing company specializing in
high-quality fuels for cleaner traffic. The company produces all of the most
important oil products and is the world's leading supplier of diesels made of
renewable raw materials. In 2014, the company's net sales stood at EUR 15
billion, and it employs some 5,000 people. Neste Oil shares are listed on the
NASDAQ Helsinki.

Neste Oil has been accepted into the Dow Jones Sustainability World Index. The
company has also been on the Global 100 list of sustainable companies for
several years in succession. CDP Forest has selected Neste Oil as one of the
best companies taking care of their forest footprint in the oil and gas
industry.www.nesteoil.com

Neste Oil Interim Report Q1_2015
http://hugin.info/133386/R/1914376/684044.pdf

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Neste Oil Oyj via Globenewswire

HUG#1914376

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