Neste core profit misses market expectations in Q2, shares fall
Q2 Financial Performance and Market Reaction
July 24 (Reuters) - Finnish biofuel maker and oil refiner Neste said on Friday its core profit soared in the second quarter as the Middle East crisis drove up prices, but failed to meet the market's high expectations.
Profit Results Compared to Expectations
Neste's adjusted earnings before interest, taxes, depreciation and amortization more than tripled from a year ago to €1.20 billion ($1.37 billion) in the quarter, while analysts had expected €1.23 billion on average.
Market Response and Analyst Commentary
The shares were down 8% at 0750 GMT. Analyst Petri Gostowski from Finnish research firm Inderes said the market had been waiting for a "clear earnings beat".
"I believe the market's expectations had recently exceeded consensus estimates and there was some speculative buying," Gostowski told Reuters in an email.
Impact of Middle East Crisis on Oil Markets
While demand for renewable oil has risen sharply since the onset of the war in Iran, uncertainty over the closure of the Strait of Hormuz has kept fossil fuel prices volatile.
CEO Statement on Market Environment
"The conflict in the Middle East dominated global oil and product markets through most of the period, creating an exceptional market environment for Neste," CEO Heikki Malinen said in a statement.
Business Segment Performance
Renewable Products
The group's renewable products sales margin rose to $1,223 per metric ton in the April-June period, comfortably beating analysts' forecast of $1,059 per ton, supported by supply constraints and biofuel-use regulations.
Renewables Business EBITDA
That led to quarterly comparable EBITDA of €859 million in the renewables business, but a core profit of €334 million in the oil products business missed consensus of €401 million.
Outlook for 2026
Neste maintained its full-year outlook for 2026 renewables sales volume to be around last year's level.
Additional Information
($1 = 0.8783 euros)
(Reporting by Boleslaw Lasocki in Gdansk, editing by Bartosz Dabrowski and Milla Nissi-Prussak)