Finland's Neste tops core profit forecast as biofuel regulations boost demand

Feb 5 (Reuters) - Finnish biofuel maker and oil refiner Neste NESTE.HE reported a quarterly core profit well above market expectations on Thursday, aided by favourable regulatory developments and growing demand for renewable fuels in Europe.

European regulations aimed at reducing fuel emissions and subsidies for companies using biofuel have boosted sales in Neste's renewables business. Europe made up 73% of all fourth-quarter sales in the business area, it said.

The Helsinki-listed group posted comparable earnings before interest, taxes, depreciation and amortisation of 601 million euros ($709 million) for the final quarter of 2025, more than tripling the year-ago figure of 168 million euros.

Analysts in a company-provided poll had expected comparable EBITDA of 526 million euros on average.

"The year 2025 marked a turning point for Neste, and we succeeded in improving our financial performance," CEO Heikki Malinen said in a statement.

The European Union has required at least 2% of fuel made available at EU airports to be sustainable aviation fuel (SAF) since last year, with the proportion scheduled to rise to at least 6% in 2030.

Sales volumes of SAF increased to a record 253,000 metric tons in the fourth quarter, Neste said.

The group added it expected renewable fuel volumes in 2026 to remain at last year's levels, while planned maintenance breaks would lead to falling sales in the oil products division.

Neste will propose a dividend of 20 euro cents per share for 2025, unchanged from the 2024 payout.

($1 = 0.8475 euros)