Neste, a Finnish renewable fuel producer, has announced plans for a performance improvement programme to enhance the company’s cost competitiveness and financial performance.
The proposed organisational changes are expected to result in the loss of around 600 jobs, including approximately 450 in Finland.
The company made the announcement after earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter of 2024 declined by 78% to €168m ($175m).
The performance improvement programme will focus on commercial acceleration, supply chain optimisation, enhanced refinery performance and safety, cost reduction and streamlining the company’s operating model.
Neste plans to achieve annual cost savings of around €65m, with plans to improve EBITDA by €350m by the end of next year, of which €250m will be from operational costs.
The company plans to cap total capital expenditure for 2025–26 at €2.4bn.
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By GlobalDataNeste president and CEO Heikki Malinen said: “Our current financial performance is weak and not sustainable. Therefore, we must take urgent action to reset various parts of our company. Adjustments to our cost structure and development portfolio are necessary to meet the current and foreseeable market realities.
“While understandably hard for Neste people, the planned efficiency measures are necessary to ensure Neste’s long-term competitiveness and success. Going forward, we plan to focus on our core operations and remain fully committed to serving our customers and maintaining our position as a global market leader in renewable diesel and sustainable aviation fuel.”
The company’s board has decided to cancel the dividend policy announced on 19 June 2023 due to the current financial condition and is proposing a dividend payout of €0.20 per share for 2024 at the Annual General Meeting.
Neste also said that it is committed to expanding its renewable fuels business, aiming for market leadership and cost efficiency.
