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Pääanalyytikko
Neste's Q1 figures were almost in line with our expectations, while the outlook for the Renewable Products’ sales margin in particular for Q2 turned the overall picture of the report to the positive side. We made minor revisions to our short-term estimates, while we made no changes to our longer-term volume-driven earnings growth estimates for Renewable Products.
Neste will publish its Q1 report next Friday at around 09.00 am. We have lowered our short-term estimates in both Renewables and Oil Products, but the estimate changes that were limited to the current year weren’t major on an annual basis.
The Q4 result reported by Neste yesterday was a smidgen better than our expectations, which was due to Renewable Products’ sales margin. This, as well as Oil Product margins that remained strong, were reflected positively in our 2023 estimates, but we did not make any substantial changes to our medium-term estimates.
The Q3 result reported by Neste yesterday exceeded expectations considerably. The earnings overshoot was the result of a clearly higher than expected performance in Oil Products while the result of Renewable Products was below expectations. We believe this explains the market's indifferent attitude to the report. After the report, we only made slight revisions to our estimates that we had raised after the preliminary result.
We have raised our short-term estimates to reflect the strong margin outlook for Oil Products and expect another excellent result in Q3. In addition to the short-term outlook, we will also focus our attention on possible comments on the ramp-up of production at the US joint venture and on the progress of the finalization of the Singapore expansion.
Q2 figures reported by Neste were even stronger than our high expectations, when in addition to Oil Products that benefited from the market disruption, the performance of Renewable Products was also high. We raised our short-term estimates, and also our longer-term earnings growth expectations for Renewable Products.
We have increased our short-term earnings estimates particularly for the Oil Products segment, reflecting the favorable market situation. However, we haven’t made any changes to our longer-term forecasts, as we don’t expect the sharp rise in the refining margin to be sustainable in the long run.
Neste's Q1 figures reported on Friday were strong as expected and the company's short-term outlook also seem to meet our expectations.
Neste announced an investment that strengthens the long-term growth outlook and market position of the Renewable Products segment on the global market for renewable products. The investment raises the medium-term earnings growth of the segment to an excellent level, which raises the expected return.
