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Finland's Neste shares plummet on downbeat biofuel sales margin outlook

(Reuters) - Shares of Finland's Neste plummeted after the biofuels producer and oil refiner posted fourth-quarter operating profit below expectations and forecast a lower 2024 renewable products sales margin than last year's.

With its Singapore plant extension finally up and running, Neste expects 2024 renewables sales volume to grow to around 4.4 million metric tons with a comparable sales margin of $600-800 per ton, well below 2023's average of $863.

"We think the FY24 renewable products sales margin guidance...is likely to disappoint investors," RBC analysts said in a note to clients, adding sales of biodiesel could also be affected by increased competition and lower tax credits.

Neste's shares fell 12% to 27.7 euros in morning trade.

Neste in December said it planned to exit fossil fuels production and would convert its last remaining oil refinery in Porvoo into a biofuels plant by the mid-2030s.

Its renewable products comparable sales margin rose 7.7% to $813 per ton from a year ago.

For the October-December quarter, Neste posted a 10.2% fall in earnings before interest, tax, depreciation and amortization (EBITDA) fell to 672 million euros ($725 million), missing the 790.7 million expected by seven analysts polled by LSEG.

Neste's board proposed a dividend of 1.2 euros per share.


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