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Add 'Refiner Neste Warns of Weaker Biofuel Outlook, Shares Drop'

Vida Herzog 2025-01-11 22:42:43 -06:00
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<br>Company makes third cut to renewables service outlook this year<br>
<br>Reduces both margin and volume outlook<br>
<br>[Weaker diesel](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) market hits [biofuel](https://www.marketscreener.com/quote/stock/MISSION-NEWENERGY-LIMITED-178469/company/) costs<br>
<br>(Adds analyst, background, detail in [paragraphs](https://www.crunchbase.com/organization/mission-newenergy) 2-3, 9-11)<br>
<br>By [Elviira Luoma](https://www.zoominfo.com/c/mission-newenergy/346542889) and Essi Lehto<br>
<br>HELSINKI, Sept 11 (Reuters) - Finnish refiner Neste on Wednesday cut the [margin outlook](https://www.zoominfo.com/c/mission-newenergy/346542889) for its [biofuel organization](https://pitchbook.com/profiles/company/51278-86) for the 3rd time this year due to [falling](https://www.google.com/search?kgmid=/m/0cqd_rb) rates and likewise decreased its expected sales volumes, sending out the business's share rate down 10%.<br>
<br>Neste stated a drop in the cost of regular diesel had affected what it can charge for the [biofuel](https://www.pinterest.com.au/missionnewenergy/) it makes in Europe and Singapore, while input expenses for waste and residue feedstock [remained](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) high.<br>
<br>A rush by U.S. fuel makers to recalibrate their plants to [produce sustainable](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) diesel has actually created a supply excess of low-emissions biofuels, hammering earnings [margins](https://www.crunchbase.com/organization/mission-newenergy) for refiners and threatening to hamper the nascent industry.<br>
<br>Neste in a declaration slashed the [anticipated average](https://www.abnnewswire.net/companies/en/31347/%E0%B8%9A%E0%B8%A3%E0%B8%B4%E0%B8%A9%E0%B8%B1%E0%B8%97-Mission-NewEnergy-%E0%B8%88%E0%B8%B3%E0%B8%81%E0%B8%B1%E0%B8%94.html/4) equivalent [sales margin](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) of its [renewables](https://biodieselmagazine.com/articles/felda-global-buys-missions-kuantan-port-plant-for-11-5-million-9053) system to between $360-$480 per tonne of [biofuel](https://stocktwits.com/symbol/MNEL), down from $480-$580 per tonne seen in July and well below the $600-$800 seen in February.<br>
<br>The company now likewise expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had forecasted since the start of the year, it included.<br>
<br>A part of the volume cut originated from the production of sustainable air travel fuel, of which it is now expected to sell between 350,000-550,000 tonnes this year, below between 500,000 and 700,000 tonnes seen previously, Neste said.<br>
<br>"Renewable products' sales costs have actually been negatively impacted by a considerable reduction in (the) diesel cost during the 3rd quarter," Neste stated in a statement.<br>
<br>"At the very same time, waste and residue feedstock rates have not reduced and eco-friendly item market cost premiums have actually stayed weak," the business added.<br>
<br>[Industry executives](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) and experts have stated quickly broadening Chinese [biodiesel](https://www.pinterest.com.au/missionnewenergy/) manufacturers are seeking brand-new [outlets](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) in Asia for their exports, while Shell and BP have actually [revealed](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) they are pausing growth plans in Europe.<br>
<br>While the cut in Neste's assistance on sales volumes of sustainable air travel fuel came as a surprise, the negative influence on [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) margins from a lower diesel rate was to be anticipated, Inderes expert Petri Gostowski said.<br>
<br>Neste's share rate had [reversed](https://www.sec.gov/Archives/edgar/data/1463471/000165495419013063/R31.htm) some losses by 1037 GMT however down 5.8% on the day and 48% lower year-to-date. (Reporting by Elviira Luoma, Essi Lehto and Boleslaw Lasocki