Neste posts EUR 914m profit in 2017

Finnish firm says the broadening of its low-sulphur marine fuel portfolio was a 'special focus' in 2017.

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Updated on 07 Feb 2018 12:19 GMT

Finnish firm Neste announced on Wednesday that it achieved a net profit of EUR 914 million in 2017, which represents a dip of EUR 29 million, or 3.1 percent, on the previous year.

In its overall results for the fourth quarter (Q4) of 2017, Neste posted a year-on-year (YoY) net profit decrease of EUR 18 million, or 6.9 percent, to EUR 244 million.

In an analysis of its research and development projects, Neste mentioned that the broadening of its product portfolio of low-sulphur marine fuels had been a "special focus" in 2017.

The company also explained that its patent portfolio in fuels and renewable feedstock had been strengthened with a "record high number of new patents and patent applications".

As previously reported, during 2017, Neste completed the revamp of its Naantali refinery, enabling it to produce less heavy fuel oil and "more valuable products".

Neste also installed a new solvent deasphalting (SDA) unit at its Porvoo refinery, which will enable the firm to produce a new product described as being an "RMG-type", "heavier" fuel with a sulphur content of less than 0.1 percent and a significantly higher viscosity than the products Neste currently has available.

Neste says the new SDA unit reached full design capacity utilization at the end of 2017.

Neste currently offers two low-sulphur fuels (Neste MDO DMB and Neste RMB), the sulphur content of which is less than 0.1 percent - meeting the requirements set out in the EU Sulphur Directive for ships operating in the Baltic Sea, North Sea and English Channel.

Neste distributes its low-sulphur marine fuels from its terminals in Naantali and Kokkola. Fuel can be trucked to all Finnish ports, and ships can be bunkered ex-pipe at the Porvoo and Naantali refinery harbours. The company has also time-chartered the M/T Lotus for bunkering in Helsinki.

In Sweden, meanwhile, Neste supplies DMB and RMB fuel in Sodertalje and Stockholm.

Discussing its future aims, Neste noted in its latest financial statement: "The strategic objectives remain unchanged: be the Baltic Sea champion and create global renewables growth. The company seeks value growth in all business areas in its home markets in the Baltic Sea area."

In an analysis of the oil maket, Neste commented: "Global oil product demand is expected to remain strong in 2018, driven by a solid macroeconomic growth, and to be reflected in both distillates and gasoline demand. Recent oil demand growth estimates for 2018 vary between 1.3 and 1.7 million bbl/d. Global crude oil inventories have started to decline from their peak levels in the second half of 2017, which has led to a crude price increase to above USD 65/bbl. OPEC's decision to continue its production cuts into 2018 is expected to support crude oil price and market structure also in the first half of 2018.

"Oil Products' reference margin is expected to be below the 2017 average in early 2018, but to get support from the start of the driving season in the spring. Oil product supply and demand are expected to be balanced with continued robust demand growth. Distillates margins are seen to be supported by lower inventory levels compared to the previous year. Crude oil supply limitations by producing countries are likely to lead to a slightly narrower Urals-Brent price differential compared to 2017."