Neste Oil's Capital Markets Day and short-term outlook
Neste Oil Corporation
Stock Exchange Release
21 September 2011 at 11.00 am (EET)
Neste Oil's Capital Markets Day and short-term outlook
Neste Oil is hosting a Capital Markets Day today, 21 September, in Rotterdam in the Netherlands. The event will feature management presentations covering areas such as Neste Oil's strategy, vision, and the latest developments in Oil Products and Renewable Fuels. An update on the company's financials will be also presented. The event will conclude with a visit to the recently commissioned renewable diesel facility in Rotterdam.
The main message of the Capital Markets Day is that Neste Oil remains fully committed to its strategy. The company has an updated vision of being 'the preferred partner for cleaner traffic fuel solutions' and will implement this through five value creation programs: Profitable growth, Productivity, Renewable feedstock, Customer focus, and Winning culture.
Leverage ratio and return on average capital employed after tax (ROACE) remain Neste Oil's key financial indicators. The target leverage ratio is 25-50% and the long-term ROACE target is 15%. Neste Oil's dividend policy remains unchanged and calls for a payout equivalent to at least one third of the company's comparable net profit.
Renewable fuels
Neste Oil has now completed its major program of investments in new renewable diesel production capacity, and the latest addition to its portfolio, the Rotterdam plant, came on stream earlier this month. The focus of the Renewable Fuels business from now on will be on achieving full capacity at all plants and making the business profitable.
Short-term outlook
Neste Oil has partially updated its short-term outlook, which was previously published in connection with the interim report for January-June 2011 on 28 July 2011.
Updated outlook:
- Neste Oil's reference refining margin averaged USD 4.6/bbl between July and mid-September, compared to USD 4.46/bbl in the second quarter
- Neste Oil's partly owned base oil facility in Bahrain is in the commissioning phase, with a start-up scheduled later in 2011. The market situation in high-quality base oils is positive, and the Bahrain plant is expected to reach maximum utilization quite rapidly after start-up
- Renewable Fuels' fourth-quarter sales volumes are expected to increase compared to the third quarter
- As a result, Renewable Fuels' comparable operating profit is anticipated to improve in the fourth quarter compared to the previous quarters, although the segment will remain loss-making
- Production costs of NExBTL renewable diesel, which were estimated at USD 175/t in 2009, have been updated to USD 220/t, mainly as a result of higher utility costs.
Unchanged outlook:
- Production Line 4 at the Porvoo refinery will be off-line for four weeks in the fourth quarter, due to decoking maintenance
- Oil Products' full-year 2011 comparable operating profit is set to be higher than in 2010
- Renewable Fuels' third quarter is expected to be weaker than the second quarter, as high unit costs and the start-up of the Rotterdam plant will impact results
- Renewable Fuels' third-quarter sales volumes are expected to be roughly double those booked during the second quarter
- Oil Retail's performance is expected to be similar to that in 2010
- Neste Oil's full-year fixed costs are estimated to be approximately EUR 650 million and cash investments EUR 300 million
Capital Markets Day presentation material in English will be available at www.nesteoil.com at around 11.00 am EET.
A video recording of the presentations will be available at www.nesteoil.com after the event.
Neste Oil Corporation
Hanna Maula
Director, Corporate Communications
For further information:
Ilkka Salonen, Chief Financial Officer, tel. +358 (0)10 458 4490
Neste Oil in brief
Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company produces a comprehensive range of major petroleum products and is the world's leading supplier of renewable diesel. The company had net sales of EUR 11.9 billion in 2010 and employs around 5,000 people. Neste Oil's share is listed on the NASDAQ OMX Helsinki.
Neste Oil has been selected into the Dow Jones Sustainability World Index and is also featured in the Ethibel Excellence investment register. The company is included in The Global 100 list of the world's most sustainable corporations. Forest Footprint Disclosure (FFD) has ranked Neste Oil as the best performer in the oil & gas sector. Further information: www.nesteoil.com.