Finnish oil refiner Neste plans to cut around 600 jobs due to declining renewable fuel prices and excess supply, resulting in a significant drop in quarterly profits. The firm also warned of ongoing market challenges and regulatory uncertainties in the U.S., delaying the Rotterdam refinery's commercial start.
Finnish oil refiner and biofuel maker Neste will slash around 600 positions as excess supply in the renewable fuel market caused a slump in quarterly core profit, it said on Thursday.
The company's shares fell 10% at 0815 GMT. "Our current financial performance is weak and not sustainable", CEO Heikki Malinen said in a statement.
Malinen warned of continuous challenges to the renewable market in 2025, adding that regulations in the United States are also causing uncertainty.
Falling prices of renewable fuel, hit by weak demand and a supply glut, have caused the Finnish group to cut its guidance on the renewable sales margin three times in 2024.
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Neste said it expects its sales volume for the renewable business in 2025 to be higher than in 2024, when it stood at 3.7 million tons, but provided no specific range.
It will push back the scheduled start of commercial operations in its renewable refinery in Rotterdam, Netherlands, the company said.
The total investment costs for the site had risen to 2.5 billion euros from 1.9 billion euros, it said.
In November, the company had to temporarily shut down its Rotterdam refinery due to a fire and the accident was expected to hit deliveries of renewable diesel for several weeks.
Neste on Thursday proposed a dividend payout of 0.20 euro per share for 2024, down from 1.20 euro it distributed a year ago. "We think scrapping the dividend payout policy is the right decision," RBC analysts said in a note to clients.
($1 = 0.9586 euros)