Neste Oil Corporation
Stock Exchange Release
4 August 2005 at 9:00 am EET
A global shortage of complex oil refining capacity continued to be reflected in high refining margins during the second quarter of 2005. Margins were further reinforced as a result of growing demand for middle distillates: diesel fuel, jet fuel, and heating oil. Neste Oil continued to benefit from the lower price of heavier, sourer crude oils compared to lighter, sweeter crude oils. The upswing in both crude oil and petroleum product prices has continued throughout the first half.
• Second-quarter net sales up 29% to EUR 2,577 million (carve-out Q2/04: 2,000 million)
• Comparable operating profit up by 18% to EUR 185 million (carve-out: 157 million)
• Operating profit of EUR 219 million (carve-out: 220 million)
• Six-month earnings per share of EUR 1.08 (carve-out: 1.20); in the second quarter EUR 0.68 (carve-out: 0.76)
• Six-month cumulative cash flow from operations of EUR 367 million (carve-out 1-6/04: 324 million)
• Net debt down to EUR 891 million (31 December 2004: 969 million), despite high investments
• Market drivers indicate clearly better economics - additional margin over USD 2 /bbl instead of at least USD 1 /bbl - than earlier envisioned for the Porvoo refinery upgrade (Diesel project), although investment costs are now estimated to be up by 10%
President & CEO Risto Rinne:
"Our flexible and highly sophisticated refineries are continuing to deliver very good results. As an oil refining and marketing company, we are benefiting from the shortage of global refining capacity and our ability to refine heavier, sourer crude. Our current investment programs will make Neste Oil's refineries even better suited to current and future petroleum product demand. We now estimate that our Diesel project in Porvoo will become more profitable than previously anticipated, despite higher-than-expected investment costs. The scheduled maintenance shutdown at the Porvoo refinery in August and September will reduce our production volumes by some 10% this year, and thus have a significant impact on our second-half profits."
Risto Rinne, President & CEO, tel. +358 10 458 4990
Petri Pentti, CFO, tel. +358 10 458 4490
News conference and conference call
A press conference in Finnish on the second-quarter results for 2005 will be held today, 4 August 2005, at 11:30 am EET at Hotel Kämp in conference room Akseli Gallen-Kallela, Pohjoisesplanadi 29, Helsinki. www.nesteoil.com will feature English versions of the presentation materials.
A conference call in English for investors and analysts will be held today, 4 August 2005, at 2:30 pm EET. The call-in numbers are as follows: UK: +44(0)20 7162 0084, US: +1 334 323 6201. Use the password: Neste Oil. An instant replay of the call will be available until 11 August 2005 at +44(0)20 7031 4064 for the UK and +1 954 334 0342 for the US, using access code 665140.