Neste Oil Operating Profit Drops 75%, Oil Products Segment Swings to Loss

Oil Products operations made a loss in 2014

Neste Oil last week reported a more than 75 percent drop in profit from operations during 2014 compared to the prior year, while its Oil Products business swung to a loss.

Operating profit for last year was €150 million ($160 million), compared to €632 million ($676 million) for 2013, while net profit sunk to €60 million ($64 million).

The group's Oil Products segment, which includes sales and marketing of bunker fuel, posted an operating loss of €110 million ($118 million) for the year, down from a profit of €285 million ($305 million) last year.

However, the group's results were kept in the black by strong profit margins achieved by its Renewable Products segment and consistent performance for its Oil Retail operations.

Overall revenue was also down, at €15.01 billion ($16.6 billion), versus €17.24 billion ($18.46 billion) in 2013.

During the year, the group received €6 million ($6.4 million) in government grants, mainly relating to its shipping operations.

According to its sensitivity analysis excluding the effect of hedged positions, the group said that for every $10 change in the per barrel price of crude oil the group saw a corresponding $70 million change in annual operating profit.

There is no projected change to this level of sensitivity for 2015.

On Tuesday, the group announced the issue of €500 million ($535 million) worth of corporate bonds to the market.

The 7-year bond carries interest at 2.125 percent and was "clearly oversubscribed," according to the company.

In January, Neste Oil launched ship-to-ship bunkering operations at Helsinki.