I noticed Finnair’s marketing on LinkedIn about voluntarily supporting SAF use for 3€ per flight. In the thread, there was also a good comment from Vaasan Sähkö’s Communications Manager on the topic, suggesting adding a minimal 50 cents to the flight price. This would achieve a significantly higher volume of SAF versus voluntary support when talking about Finnair. In its infancy… From small streams… and whatever these sayings are.
A bit of a tinfoil hat story with a grain of salt, and it also leans a bit towards the Finnair thread, but what if the payment was originally activated and everyone had the option to opt out. I would imagine that technically it would enable broader marketing of flights as ecologically sustainable. At the same time, another state-owned company, Neste, would be able to offer that product.
This would probably also contribute to the state’s emission reduction requirements and the green Finland brand.
Surely no one would mind if such a payment were made. Then care must be taken that those revenues do not again flow into management’s bonuses and options. Money is distributed to them first, and only then is it seen if anything is left over.
The headline of the earnings preview is indeed spot on…
Target price down at the same time, €11.5 → €9.0 & Reduce
The short-term valuation of the stock is quite high (2026-2026 P/E 19x and EV/EBIT 20). Balance sheet based valuation, on the other hand, is quite low at 0.8x. If the Renewable Products sector recovers in a reasonable time, the current share price could offer a good buying opportunity. So far, there are no concrete signs of market balance in sight, so optimism requires belief that the company’s balance sheet can withstand waiting for market balance without major damage.
I’m not sure if that 50-cent payment would make any difference to Neste, considering Finnair’s additional SAF purchases of roughly 2,200 tons. If that roughly 6 million were used for SAF purchases.
The state could support these renewables if it wanted to, but that won’t happen, so now we’ll follow the market, and in that game, price ultimately decides.
Neste’s earnings day tomorrow will be busy again, similar to Q4, as three companies I follow report on the same day. So I aim to keep tomorrow’s earnings live stream a bit more concise than usual, but a quick overview will still come
Generally, I have understood that fossil refining margins have correlated directly with oil prices. Recently, however, the trend has looked different based on market data.
What could be the reason for this almost 7% (at the time of writing) increase? Are pension companies on a buying spree again, or why is the stock price rising?
Those figures are quite dismal, even though expectations weren’t high at all, yet the stock price is still rising, or is the situation so bad for renewables that these figures are considered positive?
In my opinion, a relief rally. Of course, shorts have a big impact. So, reactions in both directions are too large. The result wasn’t as bad as the short sellers speculated and investors feared at worst.
And considering today’s rise, the year-to-date figure is -60%, and even on a monthly basis, we are just barely reaching a 1% gain.
Yeah, Neste’s bottom has probably been seen.
Luckily I added a bit on 8-9.4 when it was close to seven.
Of course, it’s a long way for it to get its head above water, but I believe Neste’s management will do their job.
Now just small purchases into a rising stock price, which is usually recommended for us ‘windbreaker’ investors.
After a chat with ChatGPT: if fuel accounts for 25% of the flight ticket price and SAF’s price is 3x regular fuel, then with a 50-50 blending ratio (SAF standard), the flight ticket price would increase by 25%. Would a flight ticket price change from 300->375 or 900->1125 reduce air traffic? I would guess not much, so from a common-sense perspective, SAF has explosive growth prospects. My own position is probably 50% down, but let’s calmly wait for the market to grow.
Here are OP’s Henri Parkkinen’s comments on Neste’s results.
Neste published its Q1 results today. Senior Analyst Henri Parkkinen discusses the company’s first quarter of the year in the video and gives tips on what to pay attention to at Neste in the coming months.
The overall picture of Neste’s Q1 report leans slightly positive in our opinion, thanks to a slightly better-than-expected sales margin for Renewable Products, although this does not change the overall picture of a weak absolute result. We have made forecast changes in different directions for our main segment forecasts, but at the group level, forecast changes for the coming years were not significant. Reflecting this, we reiterate our target price of 9.0 euros and our Reduce recommendation. Neste management’s interview regarding the Q1 result can be viewed from this link.
Malinen mentioned that raw material prices would need to decrease. The continuous growth of the D4 RIN price (went over $111) gives a pretty good promise.
Combined with a potential decrease in feedstock prices, margins can be improved.
Malinen was confident about demand in Europe and the sales of all produced SAF.
2025 revenue and EPS forecasts are still quite terribly low.
April 30, 2025
CVR Energy Inc.’s renewables segment on April 28 reported positive adjusted EBITDA for the first quarter of 2025 despite the expiration of the $1 per gallon blenders tax credit. Renewable diesel production volumes were up for the three-month period.
Renewables margin was $16 million, or $1.13 per vegetable oil throughput gallon, for the first quarter, compared to $4 million, or 65 cents per vegetable oil throughput gallon, for the same period of 2024. CVR Energy said factors contributing to the improved margin include higher net sales of $33 million resulting from increased production and sales volumes coupled with increased D4 renewable identification number (RIN) and Low Carbon Fuel Standard credit prices, partially offset by a decrease in average CARB ULSD prices of 26 cents per gallon. Higher net sales were partially offset by higher costs of sales of $22 million due to an increase in throughput and production volumes.
Neste made a loss, margins collapsed, and cash flow went in the wrong direction – but the share price still rose by over 15%!
What is this about? In this video, I dive into Neste’s Q1/2025 results, which were a combination of bleak figures, promises of improvement, and the first signs of cost savings.
The renewable fuels market is plagued by oversupply and intensifying competition, but Neste believes it will be ready when demand eventually grows. Is this realism or wishful thinking? And why did the markets react so positively? Let’s go through the facts, figures, and sentiments.
Hey Jussi, there’s nothing strange going on at Neste, we’re just moving towards something better.
And as an investment, it’s excellent right now.
Of course, there have been big and unpleasant YT negotiations in Finland too, my sympathies are with those who lost their jobs.
Blending mandates are on the rise, not falling; for example, in Sweden they are increasing quite significantly.
Here are my latest 5 grand that I threw into “Neste”, nice rise and 3 weeks..
Of course, my entire position is still gaining momentum from below the surface
