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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 in California, added that the U.S. market remained important for the company. But the removal of Blender's Tax Credit (BTC), a clean fuel tax credits programme proposed by the Biden administration, has led the company to reoptimise its Singapore shipments, Malinen said.
Regulations in the U.S. had affected shipping from Neste's refineries in Singapore temporarily, Malinen told Reuters. However, he added he had seen no material impact on shipping costs for Neste in the first quarter of 2024 amid macroeconomic uncertainty.
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 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 renewable products segment fell 41% to $310 per tonne in the quarter, but beat the average expectation of $242 per tonne.
Neste shares were up more than 12% in Helsinki at 1100GMT. J.P.Morgan analysts said in a note to clients the better than expected sales margin should offer some share price relief.
Sustainable aviation fuel (SAF) customers are gauging the market now, Malinen said, adding that he sees SAF demand weighed toward the second half of the year.
But while the company said it still expects its sales volumes 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.
($1 = 0.8787 euros)
(Reporting by Boleslaw Lasocki; Editing by Andrew Heavens, Kirsten Donovan, Kate Mayberry and Louise Heavens)