In light of this, Malinen’s cost-cutting measures are appropriate, even though they alone are by no means sufficient to address the market-related challenges.
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Good points @Homeros, thanks!
It came to mind to add that it is indeed good to compare at the level of operating profit, so that it reveals challenges in the cost structure that are reflected in something other than the direct gross margin. Of course, both of these should be looked at. On the other hand, it must also be remembered that at the EBIT level, different depreciation levels can impair the comparability of efficiency. I don’t remember the age structure of DGD’s refineries now, but at Neste, of course, recent investments and later Rotterdam will raise the depreciation level. In this sense, adjusted EBITDA would be the most relevant point of comparison for operational efficiency, assuming that maintenance investments/ton do not differ in the long run.
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Does anyone have more detailed information about those investments in climate action?
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The Martinez Renewables facility is a 50/50 joint partnership between Marathon Petroleum (“Marathon”) and Neste, operated by a subsidiary of Marathon.
Fire Severely Burned an Employee and Resulted in $350 Million in Damages
Fired Heater Tube Rupture and Fire at Marathon Martinez Renewables Facility
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The keenest no longer wait for the turn of the month but have to go and check the mid-month situation separately 
This “Zijoittaja” is a funny Tweeter
https://x.com/zijoittaja/status/1902308665614323859
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Mika Anttonen proposes splitting Neste in two | Kauppalehti
Will Anttonen’s proposal bring more value to shareholders? Anttonen is indeed a person I respect a lot. He knows everything about the industry.
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Daymn! Strong proposal. Hardly realistic because of the state, though. Too bad I couldn’t make it there…
Was anyone there, was there discussion?
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A slightly longer article and, as far as I know, without a paywall: Nesteen suuriin omistajiin noussut Mika Anttonen vaatii Nesteen pilkkomista kahtia | HS.fi
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Listed company Neste’s CEO’s remuneration received a harsh reception from shareholders. The company’s general meeting voted against the company’s board’s proposal for a 120 percent incentive bonus. The shareholders’ stance does not bind the company’s board, but it is advisory.
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Which side would Anttonen be interested in supporting?
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Undeniably, Anttonen’s presentation pleased and received thunderous applause from the audience. Also, the representative of the city of Kurikka (a long-time owner of Fortum and Neste) was pleased in their speech that a larger individual owner had become active, and Kurikka has also traditionally maintained connections with other owners. One could imagine that Anttonen, in his endeavors, could well gain a larger coalition behind him.
The outgoing chairman of the board, Matti Kähkönen, did not receive much applause. One private investor drew attention to the lack of crisis communication during Kähkönen’s term and received encouragement from the meeting attendees. The new chairman of the board, Pasi Laine, on the other hand, received a good reception, and it was Pekka Jaakkola who, in his speech, also specifically expressed his support for him.
Neste’s management repeated their familiar mantras, and the recording will probably be available soon. Unfortunately, I didn’t have time to participate in the discussion event held before the meeting, which was separate from the general meeting; it would be interesting to hear what was discussed there.
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I am fully aware of Anttonen’s speech and comments based on media information (Kauppalehti, Talouselämä, Yle, Hesari), but the justifications mentioned in those articles (especially Talouselämä) certainly leave something to be desired. And actually, now one can only wonder even more about Anttonen’s motives for buying Neste 
”The idea that one company’s cash flow could compensate for another’s problems sounds really old-fashioned” (source)
In my opinion, renewables and oil products are not so different in nature that they would need to be managed in different companies. Mass-produced fuel is manufactured and sold there. Both business areas have supported each other financially, and aren’t the production lines at Kilpilahti still in perfect harmony next to each other, and co-processing, if not everyday life, then at least the future.
”I look at this more from a competence perspective. These two different businesses are both in transition, and with the old doctrines that have brought us this far, we have hit a wall…Both main businesses need the best possible expertise available on the planet, and that is not currently available. Specialists do not find a company that tries to do both of these at the same time as attractive. Division is the best way to increase market expertise.” (same source as above)
Why would an expert not go to work for the current Neste, but would gladly go after the company has been split? Sounds like an incredibly soft explanation
I hope Neste does not start investigating anything extra for a while, but instead prunes the unnecessary parts and gets its operational activities in order (e.g., in terms of operational reliability) and then focuses on being better prepared to withstand and survive short-term uncertainty, which has been plentiful and apparently will continue to be so. The time for those extra investigations can be when the most acute crisis is over, and it doesn’t look like it yet.
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Should Neste be split, as Anttonen suggests.
- Yes!
- No!
- I need more data on the subject.
0
äänestäjää
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Anttonen’s interview / no paywall
Anttonen points out that Neste is a global renewables company and a Nordic oil refiner.
At the end of the interview, Anttonen is questioned about whether he is trying to undermine or take over Neste.
He doesn’t feel that Neste is even a competitor, because St1’s business is in Sweden.
Perhaps an unexplored possibility here is that St1 and Neste’s oil refining operations could merge since they are not even competitors… A merger, because according to Anttonen, St1 lacks financial resources.
The renewable business interests – at least globally – completely different investors than the oil business.
”One is the global production and marketing of renewable fuels, and the other is local oil refining in the Nordic countries.”
Instead, according to Anttonen, it’s not about him trying to undermine or take over a competitor.
”St1 is not a significant competitor to Neste in any way. A large part of our business is in Sweden.”
Would Anttonen then be interested in buying the entire Porvoo refinery if the company were to be split up?
”We wouldn’t have the means for that. If you look at St1’s balance sheet, it wouldn’t be possible.”
Companies | Neste does not understand the seriousness of its problems, says Mika Anttonen, who has become a major owner: ”You don’t run a company on hope”
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Neste’s history shows why splitting the company is an excellent idea. Neste was founded in 1948 when it became clear during World War II that Finland needed its own oil refinery to secure its security of supply. For this reason, the state has maintained its controlling interest in the company, and the ownership of domestic pension insurers does not change this situation, as they also operate in accordance with state guidelines.
Now, however, the state, in its financial difficulties, is ready to divest holdings that are not critical for security of supply. Traditional oil refining, which is concentrated in Porvoo, does not fall into this category. By splitting Neste, the state could sell the renewables business and obtain much-needed capital.
Such projects require time. First, planning takes place, then the split is implemented, and the value of “Renewables Plc” is calmly awaited to rise – and finally, it is sold. Publicly, the company’s official management now has to tell its official story, but the real negotiations take place behind closed doors.
With his proposal, Anttonen has baited the hook. Large investors will eventually come to sniff out the situation. They are not interested in Porvoo but in renewables. Now one just has to be patient and wait.
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SAF versus Hydrogen
Airbus boasts of inventing an aviation industry game-changer | HS.fi
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Or actually, no. Rather, SAF versus electricity. Electricity is made with hydrogen. And hydrogen presumably with electricity. How is electricity made? For example, with wind turbine blades. As a result, electricity powers the propellers of a propeller plane. Where is the problem here? A propeller plane is slow or only for short distances. For longer distances, a jet turbine is then used.
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I really have to say that Anttonen is lying if he claims that ST1 is not a competitor to Neste. NEOT primarily acquires fuels from the ST1 refinery and supplies ST1 and ABC fuels in Finland, so how is it not a competitor?
Indeed, there are open questions in Anttonen’s operation of “accumulating” Neste shares, and it seems that for one reason or another, he wants to drive Neste into 2 separate companies.
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Anttonen is getting too much airtime now. He won’t solve Neste’s issues.
Neste’s state ownership steering and the continuous fuss about security of supply are in the state’s focus, as long as the raw material market is caught in the war. At least concerning the Finnish refinery. When looking at the global situation, Neste’s task in Finland is to take care of fuel distribution and security of supply.
Dividing the company would serve the same purpose but simplify the strategy. Basic fuels for the security of supply of Finns and profitable public service, bioproducts separately and that unit for sale. The state is ready to sell.
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It’s hard to believe that Neste or the renewable fuels industry in Finland would benefit from a merger. Renewable fuels is one of the few sectors where Finland has multiple technology developers competing: Neste, UPM, St1. Due to this competition, the industry is likely a world leader.
Among these competitors, St1 is the smallest and has fallen behind in development. For St1, a merger would be beneficial. Neste would hardly benefit from a merger and would acquire small and somewhat problematic facilities onto its balance sheet.
Neste has invested in large, multi-million-ton facilities, and in my opinion, it would be strategically strange to merge now and acquire small Swedish facilities onto the balance sheet, where integration possibilities, for example, into plastic value chains, are non-existent.
I would rather see a merger with electricity production (hydrogen) or forest companies (lignocellulose) as more sensible, and one that would support Neste’s shortcomings in the next wave when vegetable oils and animal fats have been collected and exhausted. In this sense, a merger between UPM and Neste would be a tougher proposition.
But domestic competition is probably the best long-term strategy for everyone. Without it, the Chinese will take over the table.
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