Neste: Margins for Renewable Products under pressure
Neste's Q2 results were well below our expectations and the near-term outlook in Renewable Products, which was also affected by the challenges in Singapore, brought our estimates down significantly for the rest of the year. We also scaled up our medium-term projections for the sales margin of Renewable Products in the light of the change in Sweden's blending mandate and threats to supply growth. However, we expect the segment's earnings growth to remain buoyant as production capacity increases.
Neste produces transport fuel and renewable fuels. Today, the largest operations and extraction are held in the Nordic market, where the company is active in the entire value chain, from extraction to delivery to port depots. In addition, the opportunity is given for direct sales where customers can pick up fuel at selected stations. The largest market is in the Nordic region, and the company is headquartered in Espoo, Finland.
Read more on company pageKey Estimate Figures2023-07-27
| 2022 | 23e | 24e | |
|---|---|---|---|
| Revenue | 25,707.4 | 21,205.5 | 23,630.0 |
| growth-% | 69.7 % | -17.5 % | 11.4 % |
| EBIT (adj.) | 2,898.0 | 2,135.4 | 2,311.7 |
| EBIT-% (adj.) | 11.3 % | 10.1 % | 9.8 % |
| EPS (adj.) | 3.02 | 2.35 | 2.37 |
| Dividend | 1.52 | 1.10 | 1.15 |
| Dividend % | 3.5 % | 3.7 % | 3.9 % |
| P/E (adj.) | 14.3 | 12.6 | 12.5 |
| EV/EBITDA | 11.3 | 10.7 | 7.6 |
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