By Tarmo Virki
HELSINKI (Reuters) - Neste (HE:NESTE) reported its highest ever quarterly profit on Wednesday as renewable products helped the Finnish oil refiner and biofuel producer beat forecasts.
Its shares jumped to their highest level in 6 months and stood up 6% at 31.55 euros as of 0715 GMT.
Its third-quarter operating profit rose 77.6% to 444 million euros ($494 million) from 250 million a year earlier, it said.
That topped the 420 million expected by analysts, Refinitiv data showed.
Neste, which is 44.7% state owned, is investing in renewables which accounted for 70% of group profits in the quarter.
Its 1.4 billion euros investment in its Singapore refinery's renewables output - its biggest single investment to date - is "proceeding as planned," it said.
The refinery produces renewable fuels, mainly from waste and residue such as used cooking oil, animal fat from food industry waste, fat from fish processing waste and residue from vegetable oil processing.
Neste said its renewables unit comparable operating profit rose 34% to 305 million euros buoyed by a 30% rise in sales volumes.
Analysts at Credit Suisse (SIX:CSGN) stressed the unit's "strong operational performance."
Neste's revenue in the third quarter rose to 3.96 billion euros, beating analysts' forecasts of 3.75 billion euros.
"Demand for renewable diesel is expected to remain strong in the fourth quarter in anticipation of the growing mandates in 2020," Neste said.
Neste said utilisation rates at its renewables production facilities would remain high, except for a scheduled four-week catalyst change at its Rotterdam refinery.
It said it has been able to halve an expected 50 million-euro dent in its earnings by building up inventory.
Neste will implement a scheduled 11-week major turnaround at its Porvoo refinery in the second quarter of 2020 that is expected to hit its renewable unit's operating profit by some 40 million euros.
($1 = 0.8989 euros)