28 April 2009 10:00 [Source: ICIS news]
SINGAPORE (ICIS news)--Neste Oil’s renewable fuels business has posted a first-quarter operating loss of €10m ($13m) on lower product prices and the termination of a fixed-price feedstock contract, the company said on Tuesday.
“Biofuel prices were lower in the first quarter compared to the same quarter in 2008 and the price differentials between biofuel feedstocks have narrowed,” the Finnish company said in a statement.
The operating loss for the three months that ended 31 March reversed an operating profit of €1m in the previous corresponding period.
Revenue for the segment was up marginally at €24m, Neste said.
“The price premium of NExBTL renewable diesel over conventional biodiesel remained healthy. The segment's higher costs relate to expansion of the business and R&D,” Neste said without disclosing the exact costs in relation to the business arm.
NExBTL is Neste Oil’s proprietary technology that is able to fulfill fuel standards required by the American Society of Testing and Materials (ASTM). ASTM calls for lower cold-filer plug points (CFPP), which are the temperature fuel starts to congeal and clog up engines.
On the group level, Neste Oil reported a 53% year-on-year plunge in its comparable operating profit to €56m, which was largely due to a weaker total refining margin and “unfavourable US dollar hedging”, the company said.
Speaking previously to ICIS news, Jarmo Honkamaa, Neste Oil’s deputy CEO and executive vice president, said that the company was expecting to return to consistent profitability by the fourth quarter of 2009 following the start-up of new capacities.
($1 = €0.77)
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