Neste launches change negotiations – updates its financial goals

Fuel company In this says he will start change negotiations. The company says it is planning to simplify its operating model and increase internal efficiency.

Change negotiations concern the oil products and renewable products business areas and all common functions. The aim is to global cost savings of approximately EUR 65 million. The planned changes are estimated to lead to a permanent reduction in about 600 tasks, of which about 450 would be in Finland.

“Our financial result is weak and is not at a sustainable level. We need to immediately take action and review the different parts of our company. Our cost structure and development portfolios need to make changes in order to match the current and visual market situation,” commented the CEO Heikki Malinen in the bulletin.

Neste also said that it was launching a program aimed at improving its performance, which aims to safeguard the company’s market position and cost competitiveness in renewable fuels and to improve the company’s financial performance. By the end of 2026, the program aims to improve a total of EUR 350 million, of which EUR 250 million will be operating.

Rotterdam refinery investment project will continue

Neste says it will continue the Rotterdam refinery investment project, but the schedule and costs have been re -evaluated. Due to the challenging contractor market, the commercial deployment will be transferred from 2026 to 2027.

At the same time, the cost estimate for the investment has been raised from EUR 1.9 billion to EUR 2.5 billion.

New priorities

Neste says that, in 2025-2026, it will focus on improving efficiency and profitability, rather than growing and developing, and on tight capital expenses. The program to improve the company’s performance focuses on accelerating commercial operations and optimizing supply chain, improving the performance and safety of refineries, reducing external costs, and simplifying the operating model.

“Neste strengthens its competitive advantage by developing its current raw material base, the acquisition of new vegetable oils and research on raw materials based on lignocellulose,” the release states.

The company plans to reduce investments in the development of algae and Power-to-X. In the Renewable Products business area, Neste intends to focus on renewable fuels and reduce operations in renewable and recycled polymers and chemicals. Neste also says that it is considering simplifying its commercial operating models and cutting down the sales channels of renewable fuels to accelerate sales growth. The transformation of the Porvoo refinery is planned to focus on energy efficiency and renewable hydrogen, while other parts of the transformation would be delayed.

Neste says that it will follow strict discipline in use in the next few years, and in the coming years, in addition to the Rotterdam’s investment project, investments will be expected to be around EUR 0.5 billion each year and will focus on safety and the reliability of refinery visit.

Financial Objectives and 2024 Dividend

Neste says that, according to changes in the operating environment and financial results, the company will update its financial goals for 2025-2026. The company will aim for an improvement of EUR 350 million by the end of 2026. Of this, EUR 250 million is operational costs.

In addition, the company is committed to maintaining the Investment Grade credit rating and keeping our net charging rate in less than 40 %.

Neste says it is aiming for an investment of up to EUR 2.4 billion in 2025-2026. Given the company’s current financial situation, the Board of Directors has decided to cancel the dividend policy announced in June 2023 and propose to the General Meeting that a dividend of EUR 0.20 per share be paid a dividend for 2024. In the future, Neste says that it will maximize operational cash flow to strengthen the balance sheet and possibly look at the dividend in the future.