Biofuel maker Neste expects limited impact from tariffs, but supply glut still weighs

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(Reuters) -Finnish biofuel maker and oil refiner Neste expects U.S. tariffs will have only a limited direct impact on its business, it said on Tuesday, but warned of continuous oversupply in renewable fuel and market volatility.

"We expect the European policymakers to safeguard a level playing field and competitiveness of European industrial companies," Neste Chief Executive Officer Heikki Malinen said in a statement.

Excess supply of renewable fuel, weak demand and global economic uncertainty have hit the profitability of the Finnish group, which warned in February of ongoing challenges ahead.

Neste, which has a joint venture with Marathon Petroleum (NYSE:MPC) in California, added that the U.S. market remained important for the company. However, the removal of Blender’s Tax Credit (BTC) has led the company to reoptimise its Singapore shipments, Malinen said. BTC was a clean fuel tax credits programme proposed by the Biden administration, but later scrapped.

The company’s comparable first-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 62% from a year earlier to 210 million euros ($239.15 million), and Malinen said the performance remained "unsatisfactory".

Analysts in a company-provided consensus had expected 211.7 million euros on average.

Neste’s sales margin in the renewables products segment fell to $310 per tonne in the quarter from $526 in the first quarter of 2024, but beat the average expectation of $242 per tonne.

But while the company said it still expects its margins to improve in 2025, it warned of the impact from oil price movements amid geopolitical uncertainty.

Earlier in April the group reduced about 510 positions globally, in a move expected to bring annual savings of around 65 million euros.

Neste shares were up more than 10% in Helsinki at 0725 GMT.

($1 = 0.8781 euros)

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