27/10/2011 (Helsingin Sanomat) - When the wheels of the world economy are turning fast fuel is needed. At present, however, the outlook is somewhat unclear, to say the least. This is why Neste Oil President and CEO Matti Lievonen exercised a certain amount of caution when speaking about the company’s end-year prospects on Tuesday. “The uncertainty is expected to continue as solutions to the challenges of the world economy are still being searched for”, Lievonen said.

Nonetheless, for Neste the beginning of the autumn has been better than expected. The company’s stock price went up by no less than 13 per cent on the Helsinki Stock Exchange on Tuesday as investors digested Q3 results that took them quite by surprise. For July-September the oil refinery firm’s comparable operating profit came in at an encouraging EUR 66 million, against a more modest EUR 57 million a year earlier. The result exceeded clearly the predictions by analysts interviewed by the news agency Reuters. The company’s net sales grew by more than a third reaching EUR 4.1 billion. This was down to the fact that the price of oil has gone up, but also because the company’s sales have increased.

Nordea analyst Pasi Väisänen explains the skyrocketing of the Neste share price less by the profits and more by the improved outlook for renewable fuels. At the start of the autumn, renewable fuels were still a liability, but the long-term prospects have since brightened. In connection with its Q3 interim report, Neste estimated that in the remaining part of the year it would increase its renewable fuel sales by 50 per cent. This will “lead to an improvement in Renewable Fuels’ fourth-quarter result”, Lievonen said. “Many investors have reckoned that the biodiesel sector will continue to operate at a loss also next year and that it will amount to nothing. Now the probability for biodiesel becoming a viable business operation has increased”, Väisänen says.

The environmental organisation Greenpeace, in turn, has voiced its concerns over the company’s renewable fuel business model and the palm oil quantities used in the activity. On Tuesday, a group of Greenpeace activists chained themselves to the doors of the Neste headquarters in Espoo. The activists called for the company to change its course of action and argued that the farming of oil palms destroys forests in Southeast Asia. Neste Oil said that it agreed with Greenpeace on the importance of the preservation of rainforests. According to the company, its production of renewable fuels does not cause rainforests any harm.