The following is a summary of the Neste Oyj (NTOIF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Neste's Q4 2023 results exhibited strength in all business sectors, with renewable product sales margin recording $813 per tonne.
The company achieved a strong refining margin performance of $18.90 per barrel in Oil Products even with leaner refining margins than the previous quarter.
The cash flow of Neste also thrived, amounting to a free cash flow of €750 million in 2023.
Although the comparable EBITDA at €3.58 billion was slightly below the previous year, it remained robust.
Comparable ROACE fell to 24% due to assets increase resulting from online growth projects but it still outperformed the target of 15%.
Dividends of €1.2 per share were proposed, fitting the company's policy of paying competitive and gradually increasing dividends.
Business Progress:
Neste reported strong outcomes through optimized end-to-end value chains in both renewable and oil products and plans to increase Renewable Products' sales volume to approximately 4.4 million tonnes in 2024.
The company is also planning to accelerate investments in the cloud infrastructure, with an expected increase in capital expenditures throughout the coming year.
Neste has also initiated plans to improve efficiency, including a new simplified organization and operating model that is expected to create €50 million of cost savings.
After finalizing the ramp-up in Singapore and Rotterdam, expanding the feedstock base, and continuing efficiency improvement plans, the company aims for a substantial increase in 2024.
In 2024, Neste Oyj is expected to deliver between 500,000 and 1 million metric tonnes of extra Sustainable Aviation Fuel (SAF).
Moreover, Neste aims for an improved utilization rate in 2024 and plans a major overhaul in April-May 2024, with a total CapEx projected to be €390 million.
More details: NESTE OYJ IR
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