Neste (NESTE) Q4 2023 earnings summary

Executive summary

• FY comparable EBITDA was €3,458m vs €3,537m; Q4 comparable EBITDA was €797m vs €894m.

• FY cash flow before financing activities improved to €751m from -€390m, while strong Renewable Products performance was offset by lower Oil Products earnings.

Financial highlights

• FY revenue was €22,926m vs €25,707m; Q4 revenue was €6,303m vs €6,562m. Lower market and sales prices reduced FY revenue by ~€4.3bn, partly offset by volumes and trading.

• FY EBITDA was €2,548m vs €3,048m; net profit was €1,436m vs €1,891m, and EPS was €1.87 vs €2.46.

• FY inventory valuation losses were €827m and fair-value changes in open commodity and currency derivatives were -€98m, reducing reported EBITDA versus comparable EBITDA.

• Q4 operating profit was €415m vs €589m; comparable EPS was €0.66 vs €0.84. FY comparable EPS was €2.88 vs €3.04.

Outlook and guidance

• 2024 Renewable Products sales volume expected at 4.4 Mt (+/-10%), including 0.5–1.0 Mt SAF; comparable sales margin guidance is $600–800/ton.

• 2024 Oil Products sales volume and refining margin expected below 2023, with the Q2 Porvoo turnaround a key impact.

• 2024 cash-out capex excluding M&A estimated at €1.4–1.6bn; maintenance and strategic investment expected to represent 40% and 60%.

• Porvoo turnaround capex estimated at €390m, with comparable EBITDA impact of ~€190m for Oil Products and ~€40m for Renewable Products.

• Fixed costs expected to be somewhat higher in 2024, with growth leveling off as savings and efficiency measures moderate the trend; market volatility expected to remain high.