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Neste delays start-up of Singapore refinery to Q1 2023
FINNISH biofuel producer and oil refiner Neste reported smaller-than-expected falls in second-quarter sales and profit on Thursday, driven by its renewables business, and sending its shares 8 per cent up to their highest ever level.
The stock jumped even as the company said it had delayed the expansion of its Singapore refinery, its biggest investment to date, citing the Covid-19 pandemic.
"Without taking possible new waves of infections into consideration, the estimated start-up of the plant is moved from the middle of 2022 to the first quarter of 2023," Neste said. The delay would raise the cost of the expansion to 1.5 billion euros (S$2.4 billion) from an earlier estimate of 1.4 billion euros.
The refinery produces renewable fuels mainly from waste and residues such as used cooking oil, animal fat from food industry waste, fish fat and residue from vegetable oil processing.
Neste said its April-June comparable operating profit fell to 255 million euros, beating the 221 million euros expected on average by analysts, Refinitiv Eikon data showed.
The company's renewables business unit, its main profit generator for years, reported comparable operating profit rising 10 per cent from a year ago to 314 million euros, while the other key unit of oil products reported a loss for the quarter.
Lower oil prices and weaker demand caused revenue to fall 37 per cent from a year earlier to 2.57 billion euros, above analysts' forecast of 2.36 billion.
"Sales volumes of renewable diesel are expected to remain relatively stable in the third quarter despite the market impacts of the Covid-19 pandemic," Neste said. REUTERS