Neste, a Finnish biofuel and oil refinery company, announced Thursday it would be cutting its staff by 600 people.
The company’s core profit for the fourth quarter fell below market expectations.
Neste is likely to have cut jobs as part of an overall cost-cutting program in order to boost its financial performance, given the challenging conditions on the market.
Weak financial performance
Heikki malinen, CEO of Heikki Group said:
The current performance of our financial position is not good enough to sustain it.
Finnish company forced to reduce its projected renewable sales margin by three times in 2024.
The falling price of renewable fuels is a direct consequence of both a weak market demand and resulting oversupply.
As reflected by its earnings before tax, depreciation and amortization (EBITDA), the company’s fourth-quarter financial performance was below expectations.
The key indicator, which gives insight into the operational profitability of the company, has seen a 78% decline compared with the prior period. It now stands at 168 millions euros.
This was a far cry from the 308 million euro average that analysts had projected in a poll conducted by the company. According to Reuters, this is a significant miss, and raises concerns over the business’s underlying health.
Sales volumes may rise
Neste is a leader in renewable energy. Neste also released its projected sales volumes for its renewable businesses by 2025.
In 2024 the company expects to sell more than the 3.7 million tonnes it sold in the year before.
Neste, however, has not provided a range of expected sales in 2025.
The company may be confident about its growth but there could still be uncertainties which can affect exact sales numbers.
The uncertainty could be caused by a variety of factors, such as the market, the regulatory environment, and the rate of adoption of renewable energies around the globe.
Neste has a positive outlook for the future of renewable energy and is committed to growing its business.
A delay has been announced by the company in its planned start-up of commercial operations for its Rotterdam renewable refinery, located in Netherlands.
The company stated that this setback was due to the fact that the estimated total costs of the project have increased from 1.9 billion euro to 2.5 billion euro.
A fire in the Rotterdam refinery caused an unexpected disruption of operations for the company.
Operating challenges
It was not just the immediate challenges of the fire that caused concern, but the potential disruptions to the supply chain and the safety checks and repairs needed before the refinery can resume its full operation.
The incident caused a temporary closure of the plant, and it was expected to negatively impact the ability of the company to supply renewable diesel over a few weeks.
Neste Corporation announced its dividend proposal of 0.20 euros per share, for fiscal year 2024.
The dividend per share is down from 1.20 euros in the prior year.
The following post explains why Neste oil refinery is cutting 600 positions. This post may be updated as new information unfolds
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