Neste Oil Corporation financial performance targets, capital structure targets and dividend policy


Not for release, publication or distribution in the United States of America.


In connection with the proposed separation of Neste Oil Corporation from Fortum Corporation and the planned listing of Neste Oil Corporation on the Helsinki Stock Exchange in April, Fortum Corporation and Neste Oil Corporation announce the financial performance targets, capital structure targets and dividend policy that Neste Oil Corporation intends to use going forward as a separately listed company. 


Financial performance targets


Over the longer term, Neste Oil Corporation will measure its performance using a number of operational and financial metrics.  In particular, given the capital intensive and cyclical nature of its business, Neste Oil Corporation will focus on its return on average capital employed after tax(ROACE*) under reference market and operating conditions. Before the completion of the upgrade at the Porvoo refinery (the Diesel Project), the target is:


- ROACE of at least 13 percent


For the purposes of this financial performance objective, reference market and operating conditions comprise primarily of:


- Neste Oil Corporation's total refining margin of USD 6.0 to 6.5 per barrel

-Average annual production volumes of approximately 100 million barrels (for both the Porvoo and Naantali refineries and excluding the impact of a five and six year turnaround respectively)

-Exchange rate of USD 1.30 to EUR 1


Capital structure targets


Over the cycle, Neste Oil Corporation’s leverage ratio is likely to fluctuate and it will be Neste Oil Corporation’s objective to maintain its leverage ratio (the ratio of net debt to net debt plus shareholders equity plus minority interests) within the range of 25 to 50 percent.  However, because of the scheduled upgrade at the Porvoo refinery to be completed by the end of 2006 (the Diesel Project), Neste Oil Corporation’s leverage ratio at year end 2005 may be higher than the target leverage ratio of 25 to 50 percent.


Furthermore, Neste Oil's leverage ratio may vary outside this range of 25 to 50 percent to the extent that Neste Oil Corporation identifies investment or acquisition opportunities where the risk adjusted returns are believed to justify increases in leverage for periods of time.


Dividend policy    


Based on Neste Oil Corporation's expectations for net income for 2005, it would expect to recommend a dividend of 25 to 50 percent of its net income for the year ending 31 December 2005. Following the year 2005, and assuming reference market and operating conditions in subsequent years (as outlined above), Neste Oil Corporation would expect to propose dividends to shareholders annually at levels consistent with its net results of operations and targeted and actual financial position.


A teleconference for international analysts and investors will be arranged on Tuesday, 15 March at 4:00 pm Finnish time (GMT+2). To listen to the call please dial +44 (0) 1452 568 061.


In connection with the proposed separation of Neste Oil from Fortum Corporation, a presentation was given to research analysts from a number of institutions. This presentation may be found on the Fortum website at



Fortum Corporation

Carola Teir-Lehtinen

Senior Vice President, Corporate Communications


Helsinki Stock Exchange
Key media


For further information please contact
Juha Laaksonen, CFO, tel. +358 10 452 4519

Petri Pentti, CFO, Neste Oil Corporation, tel. +358 10 452 4490



*) ROACE =

(Net profit** + Minority interest + Net interest expenses)   


Average capital employed***


** Net profit is adjusted for inventory gains or losses (net of tax) and non recurring items (net of tax)


*** Capital employed is defined as Shareholders equity (including net profit for the period adjusted for inventory gains or losses (net of tax) and  non recurring items (net of tax)) + Minority interests + Interest-bearing net debt


The information contained herein is not for publication or distribution into the United States. The material set forth herein is for informational purposes only and is not intended, and should not be construed, as an offer of securities for sale into the United States. The securities described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the laws of any state, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.


The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction.


This document does not constitute an offer of securities to the public in the United Kingdom. No prospectus has been or will be registered in the United Kingdom in respect of the shares consequently the shares must not be sold or offered for sale in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or whom it is reasonable to suppose will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their business.

This communication is made to or is directed at persons who are (i) outside the United Kingdom or (ii) “investment professionals” under Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (iii) “high net worth companies, unincorporated associations etc.” under Article 49(2)(a) to (d) of the Order (together referred to as “relevant persons”).  Any investments or services referred to in this communication are offered only to relevant persons. This communication should only be relied on by relevant persons.