(Reuters) -Finnish biofuel maker and oil refiner Neste reported stronger than expected core earnings for the second quarter driven by soaring sales of sustainable aviation fuel (SAF), sending its shares rising.
Neste’s comparable quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) rose 42% from a year earlier to 341 million euros ($401 million).
Analysts had expected 302.5 million euros on average in a company-provided consensus
“Our sustainable aviation fuel sales increased close to 80% quarter on quarter, benefiting from additional SAF production capacity at our renewables refinery in Rotterdam,” CEO Heikki Malinen said in a statement.
The rise in SAF sales drove the sales volume in Neste’s renewable products unit to a new quarterly record of 1,096 thousand tonnes. The unit’s sales volume margin fell 5% to $361 per tonne, but exceeded analysts’ forecast of $329 per tonne.
“We saw positive developments in the biofuel regulation both in the US and EU, largely supporting long-term renewables demand,” Malinen, who joined the company last year, said.
Neste shares were up 15% as of 1000GMT. RBC analysts said in a research note that the second quarter was a “key litmus test” for Neste’s new management, adding the results boded well for investor sentiment.
However, Malinen warned that the market environment was volatile and headwinds from global trade tensions were expected to continue.
Neste has been battling an excess supply in the renewable fuels market, pressuring its sales volumes and leading to a reduction of around 510 jobs globally earlier in 2025.
Alhough the group said it still expected its annual sales volumes to improve from 2024, it also forecast continuing oversupply in the renewable fuels market for the year.
Malinen told Reuters that he expects the oversupply to continue in 2026 or even beyond that, depending among others on the regulation process in the European Union.
Combined with weak demand and high input costs, oversupply had made Neste cut its forecast for the renewables sales margin three times in 2024.
($1 = 0.8500 euros)
(Reporting by Boleslaw Lasocki in Gdansk, editing by Milla Nissi-Prussak)
