UPDATE: Neste Oil Sees Challenging 2010, Books 4Q Net Loss
04 Février 2010 - 9:24AM
Dow Jones News
Neste Oil Oyj (NTOIY) Thursday said refining markets are likely
to remain challenging in 2010 and it expects margins to increase
only gradually as it reported a below-forecast net loss for the
fourth quarter of 2009.
The Finnish oil refining company said the slow recovery of
demand, new capacity due to come onstream in 2010 and high
petroleum product inventories will weigh on a recovery in refining
margins.
"It is likely that refinery utilization rates will be limited
globally and that more capacity will be closed either temporarily
or for good," Neste Oil said.
The company booked a net loss of EUR1 million, an improvement on
the EUR290 million loss of the same period of 2008, but below a Dow
Jones Newswires poll of six analysts which pointed to a profit of
EUR31.03 million.
The result was impacted by lower sales as the refining margin
slumped to $5.85 a barrel from $15.05 a barrel a year ago, and a
series of negative non-recurring items including costs relating to
job cuts announced in late 2009.
Chief Executive Matti Lievonen said: "The refining industry had
a very difficult year in 2009, which was reflected clearly in our
result. A virtually unprecedented drop in oil demand, coupled with
increased new refining capacity, led to lower refining margins
compared to recent years."
Lievonen said 2010 "appears to be another challenging year due
to the slow pace of economic recovery."
Revenue was at EUR2.49 billion compared with EUR2.81 billion a
year ago, and the loss per share for the period was EUR0.01 from a
loss of EUR1.14 a share in the fourth quarter of 2008.
The company proposed a dividend of EUR0.25 a share for 2009.
Neste said it has built up a significant storage in anticipation
of its planned maintenance turnaround at the Porvoo refinery in
Finland in the second quarter. Storage depressed cash flow from
operations by around EUR250 million, leading to net cash from
operations of negative EUR225 million. That compares to positive
net cash of EUR486 million in the fourth quarter of 2008.
Neste Oil closed at EUR11.65 Wednesday, off the previous
12-month peak of EUR13.22 reached in October following news of
layoffs. The shares had made a steady recovery from July up to that
point, but fell again after the October high as depressed refining
markets continued to weigh on a more sustained recovery.
Company Web site: www.nesteoil.com
-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386;
elizabeth.adams@dowjones.com
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