Neste says U.S. tax credit to lift Q1 profit
Finnish oil refiner and biofuel producer Neste expects the reinstatement of the renewable fuel tax credit in the United States to increase its first quarter profit, the company said on Friday.
The retroactive approval of the 2017 biodiesel credit was part of the budget deal approved by the U.S. Senate and House of Representatives, averting a government shutdown.
Neste did not disclose a number for the profit boost, but said it would be “somewhat lower than in the full year 2016”.
The company did not disclose the 2016 number either, but analysts estimated it to be around 100 million euros ($122 million). The credit added 169 million euros to Neste’s operating profit in 2015.
Biofuel blenders in the United States are eligible for a tax credit of $1 per gallon, and the benefit is shared between the buyer and seller.
Neste exports renewable diesel to the U.S. market from its plants in Singapore and Rotterdam.
Earlier this week, Neste posted better-than-expected 2017 earnings.
($1 = 0.8168 euros)
(Reporting by Tuomas Forsell; Editing by Mark Potter)