Neste Oil - Interim report (Q1 and Q3)

Neste Oil's Interim Report for January-March 2012

Neste Oil Corporation
Stock Exchange Release
26 April 2012 at 9 a.m. (EET)

Neste Oil's Interim Report for January-March 2012

- First-quarter comparable operating profit was EUR 76 million (Q1/2011: 43
million), partly due to improved performance at Renewable Fuels
- Strong gasoline market supported refining margins


First quarter in brief:

  * Comparable operating profit was EUR 76 million (Q1/2011: EUR 43 million)
  * IFRS operating profit was EUR 188 million (Q1/2011: EUR 171 million)
  * Total refining margin was USD 9.07/bbl (Q1/2011: USD 8.92/bbl)
  * Net cash from operations was EUR -353 million (Q1/2011: EUR 58 million)
  * Investments totaled EUR 48 million (Q1/2011: EUR 120 million)
  * Leverage ratio was 49.3% (Q1/2011: 42.5%)

President & CEO Matti Lievonen:"The strong gasoline market supported refining margins during the first quarter.
Crude oil price increased, and the price differential between lighter and
heavier crude oil was volatile, and widened towards the end of the quarter. As
our refineries at Porvoo and Naantali operated smoothly, we were able to record
a good result at Oil Products.

We continued making positive progress at Renewable Fuels, which improved its
comparable operating profit by EUR 13 million from the previous quarter. Sales
volumes rose as projected, and we sold 305.000 tons of NExBTL in the first
quarter. Legislative work to open up new markets has proceeded and we shipped
our first cargo to the US, marking an important milestone. Our renewable diesel
production units have operated well, and I am very pleased that our Singapore
refinery has also received US EPA certification as a producer of biofuels that
can count against the US biofuel mandates.

Refining margins for advanced refiners are expected to remain relatively strong
in the near future. Scheduled decoking maintenance on diesel production line 4
at Porvoo has been completed, and the major maintenance turnaround in Naantali
is on-going. NExBTL sales volumes are expected to develop positively, but the
renewable diesel margin is currently depressed due to the narrow price spread
between vegetable oils, and the low FAME biodiesel margin. Although a proportion
of sales margin has been hedged, the second-quarter comparable operating profit
at Renewable Fuels is expected to be lower than in the first quarter, if the
challenging margin situation continues.

We maintain our previous guidance that Neste Oil's full-year comparable
operating profit is expected to improve significantly compared to 2011, assuming
that Neste Oil's reference refining margin remains at last year's level and that
quarterly sales volumes of renewable diesel are similar to or above those seen
during the last quarter of 2011."

The Group's first-quarter results in 2012

Neste Oil's revenue increased to EUR 4,454 million in the first quarter from EUR
3,472 million reported for the same period in 2011. This increase resulted from
higher oil prices and the growth of the Renewable Fuels business. The Group's
comparable operating profit came in at EUR 76 million. Comparable operating
profit for the corresponding period in 2011 was EUR 43 million. Renewable Fuels
recorded a significantly higher comparable operating profit year-on-year, and
the Oil Retail and Others segments also improved. Oil Products, however, posted
a slightly lower result than in the first quarter 2011.

Oil Products' first-quarter comparable operating result was EUR 77 million (83
million), Renewable Fuels' EUR -2 million (-36 million), and Oil Retail's EUR
15 million (12 million). The comparable operating profit of the Others segment
totaled EUR -10 million (-16 million). Associated companies and joint ventures
result accounted for EUR -6 million (-10 million) of the comparable operating
result booked in the Others segment.

The Group's IFRS operating profit was EUR 188 million (171 million), which was
impacted by inventory gains totaling EUR 64 million (141 million) and a capital
gain totaling EUR 45 million (1 million). Pre-tax profit was EUR 166 million
(160 million), profit for the period EUR 121 million (118 million), and earnings
per share EUR 0.47 (0.46).

Given the capital-intensive nature of its business, Neste Oil uses return on
average capital employed after tax (ROACE) as its primary financial target.
ROACE figures are based on comparable results. As of the end of March, the
rolling twelve-month ROACE was 3.0% (2011 financial year: 2.6%).

Outlook

The market expects that margins for advanced refiners, such as Neste Oil, will
be higher in the second quarter than in 2011 and remain roughly at 2011 levels
for the remainder of the year. Diesel is projected to be the strongest part of
the barrel going forward, and the second-quarter gasoline margins are expected
to stay higher than in 2011. Demand for base oil has remained healthy, and
margins are expected to continue recovering. Approximately 30% of Neste Oil's
volume in 2012 is hedged at a USD 4.7 /bbl reference margin level, assuming an
Urals-Brent differential of USD -1.0/bbl.

Neste Oil expects to see good productivity and higher production volumes at its
Porvoo refinery in 2012. Two scheduled maintenance outages during the second
quarter will impact sales volumes and profit. Diesel production line 4 at Porvoo
refinery was off-line for four weeks due to planned coke removal, and a six-week
major turnaround is currently taking place at the Naantali refinery. In
addition, further decoking maintenance of diesel production line 4 is expected
before the next winter period.

Oil Products' full-year comparable operating profit is expected to improve
compared to 2011, assuming that Neste Oil's reference refining margin remains at
last year's level.

The ramp-up of the Renewable Fuels business will continue in 2012. The US market
has now been opened and Neste Oil has already made its first sale there. Sales
volumes of renewable diesel will grow clearly from first-quarter level during
the second quarter. Although renewable diesel volumes are growing and a
proportion of sales is hedged, second-quarter operating profit at Renewable
Fuels will be lower compared to the first quarter if margins stay depressed.

Oil Retail's full-year comparable operating profit is expected to be at least
equal to that seen in 2011.

In line with previous estimates the Group's fixed costs are expected to be
approx. EUR 640 million, and the Group's investments are expected to be approx.
EUR 350 million in 2012.

Neste Oil maintains its previous guidance and expects its full-year comparable
operating profit to improve significantly compared to 2011, assuming that Neste
Oil's reference refining margin remains at last year's level and that quarterly
sales volumes of renewable diesel are similar to or above those seen during the
last quarter of 2011.

Further information:
Matti Lievonen, President & CEO, tel. +358 10 458 11
Ilkka Salonen, CFO, tel. +358 10 458 4490
Investor Relations, tel. +358 10 458 5292


News conference and conference call
A press conference in Finnish on the first-quarter results will be held today,
26 April 2012, at 11:30 a.m. EET at the company's headquarters, Keilaranta 21,
Espoo. www.nesteoil.com will feature English versions of the presentation
materials. A conference call in English for investors and analysts will be held
26 April 2012, at 3 p.m. Finland / 1 p.m. London / 8 a.m. New York. The call-in
numbers are as follows: Europe: +44 (0) 20 7136 2054, US: +1212 444 0895, using
access code 9244155. The conference call can be followed at company's web site.
An instant replay of the call will be available until 2 May 2012 at +44 (0)
20 7111 1244 for Europe and +1 347 366 9565 for the US, using access code
9244155#.

Neste Oil's interim report is available in its entirety on the company's website
at www.nesteoil.com


[HUG#1606164]

Attachments:

Neste OIl s Interim Report Q1 2012.pdf