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Neste sees Singapore green jet fuel sales picking up from Q2 2024

(Reuters) - Finland's Neste beat third-quarter core earnings forecasts and said SAF sales from its new Singapore facility would pick up from the second quarter of next year.

Renewable fuels are a cornerstone for the oil refiner and biofuel producer, which said a new line of its Singapore facility would start production in the first half of November after delays due to unexpected repairs.

Sales of SAF from the Singapore facility would start showing up next year, Neste's Chief Executive Matti Lehmus said. "In practice, the assumption is that especially from the second quarter onwards," he told Reuters.

Neste expects the new line to reach about 75% capacity utilization by the end of this year.

It will contribute to Neste's global goal of increasing its renewable fuels production capacity to 6.8 million metric tons by 2026, including 2.2 million tons of SAF, the company said.

In 2022, Neste produced 3.3 million tons of renewable fuels, including 158 tons of SAF at its Porvoo refinery in Finland.

Airlines are banking on SAFs to help them reduce carbon emissions, but low production levels and high costs have put a question mark over how quickly they can be introduced.

Neste's comparable earnings before interest, tax, depreciation and amortization (EBITDA) rose to 1.05 billion euros ($1.11 billion) in July-September from 979 million euros in the same period last year, driven by its renewable products.

That beat analysts' mean forecast of 930.5 million euros in a company poll.

Neste shares were up around 5% in afternoon trade.

Its comparable sales margin for renewable products stood at $912 per ton, up from $732 a year earlier, "supported by a strong diesel price and successful global optimization," Lehmus said.

Neste said the fourth-quarter margin was expected to remain strong, in a range of $800–900 per ton.

RBC analysts called the results a "beat driven by all divisions".

"Slow restart in Singapore, SAF sales a bit later that expected but in sight," they wrote in a note.

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