HELSINKI, Sept 11 (Askume) – Finnish refiner Neste (NESTE.HE) cut its profit outlook for its biofuels business for a third time on Wednesday and lowered its forecast sales due to falling prices, sending its shares down 10%.
Falling prices of regular diesel have impacted the price of biofuels produced in Europe and Singapore, while input costs for waste and residual feedstock remain high, Neste said.
The race by US fuel makers to rebalance their plants to produce renewable diesel has led to a surge in supply of low-emissions biofuels, hurting refinery margins andHindrance to the growth of emerging industries .
In a statement, Neste cut its expected average comparable sales profit for biofuels from its renewable energy unit to $360-480 per tonne , well below $800, from $480-580 per tonne in July and $600 per tonne in February.
The company also now expects renewable energy sales to be around 3.9 million tonnes in 2024, compared with 4.4 million tonnes forecast at the beginning of the year.
Neste said the drop was partly due to production of sustainable aviation fuel, with sales this year expected to be between 350,000 and 550,000 tonnes, up from a previous range of 500,000 to 700,000 tonnes.
“The significant drop in diesel prices in the third quarter had a negative impact on the selling price of renewable products,” Nestor said in a statement.
“At the same time, waste and residual feedstock prices have not declined and market premiums for renewable products remain weak,” the company said.
Rapidly expanding Chinese biodiesel producers are looking for new export pipelines to Asia , while Shell (SHEL.L) and BP (BP.L) have announced expansions in Europe, industry executives and analysts said.Plan . Catch up.
Petri Gostowski, an analyst at Inderes, said that while it was surprising that Neste lowered its sustainable aviation fuel sales guidance, the negative impact of falling diesel prices on biodiesel profit margins was expected.
Neste shares were down by 1037 GMT but were down 5.8% on the day and 48% year to date.
