On Wednesday afternoon, investors were concerned after Neste’s share price dropped by almost five percent. In response, the company organized a “pre-silent call” to discuss the impact of lower diesel prices on their business during the second quarter. Neste’s CFO Martti Ala-Harkonen and director of investor relations Anssi Tammilehto were present to provide insight into the company’s current situation.
According to Bloomberg, Neste attributed the weaker market situation in the second quarter to various factors, including high raw material prices, especially in European and American markets. However, they did not provide specific details on the quarter’s results or their current standing in relation to earlier guidance. On May 14, Neste issued a negative profit warning for renewable products due to high raw material prices, adjusting their 2024 comparable sales margin guidance.
During the call, Neste highlighted that China offers more competitive rates that could benefit them in the long run. They also mentioned that the Martinez production plant is currently operating at only 50 percent capacity, impacting their sales margins. However, they expect it to increase to 75 percent in the third quarter, potentially improving profitability.
A correction was issued stating that CEO Matti Lehmus did not comment on Neste’s situation during this time. Instead, CFO Ala-Harkonen and Anssi Tammilehto provided insights into the company’s financial outlook as they navigate challenges in the fuel industry through innovation and strategic planning while focusing on operational efficiency.
In conclusion, despite facing challenges such as declining fuel prices and supply chain disruptions due to geopolitical tensions and trade wars between major economies like China and America or Russia and Ukraine; companies like Neste continue to innovate and adapt through strategic planning while focusing on operational efficiency to maintain profitability amidst tough market conditions.
