MOL 4th-Quarter Unadjusted Net Profit Falls to HUF4.86 Billion

BUDAPEST--Hungarian oil-and-gas company MOL Nyrt. (MOL.BU) saw its unadjusted profit halved in the fourth quarter versus a year ago, underpinning analysts' expectations of a weak refining environment, the company's earnings report published early Tuesday showed.

MAIN FACTS:

--MOL's fourth-quarter unadjusted net profit of HUF4.86 billion forints ($21.5 million) halved versus a net profit of HUF9.5 billion a year earlier mainly as the result of a deteriorating output in the downstream segment.

--Adjusted Ebitda, which analysts watch closely to gauge efficiency, dropped mainly due to the weak downstream performance: seasonally lower demand and sales in refining, marketing and retail; the collapse of the gasoline crack spread; lower integrated petrochemicals margins; and unfavorable foreign currency rate trends. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, came in at HUF122 billion, down 12% from a year earlier but higher than the HUF102.8 billion analysts had forecast.

--The company's upstream results improved however, as decreasing production and slightly deteriorating average prices were balanced by lower provisions than were earlier planned in Hungarian operations, the company said.

--One-off items impacting the bottom line included the state-initiated sale of the Hungarian gas storage business, which boosted reported Ebitda by HUF19 billion. In the meantime, the revision of the asset base in the upstream business in Syria and the downstream business in Croatia together reduced reported Ebit, or earnings before interest and taxes, by HUF50 billion.

--MOL's Croatian oil-and-gas company INA (INA.ZG), which MOL is mulling to sell as a result of a spat with fellow INA major owner the Croatian government, earlier also posted disappointing results.

--"The European downstream landscape is still characterized by depressed macroeconomic conditions," said Zsolt Hernadi, chief executive and chairman, said in the earnings report, noting he expected the refining environment to remain weak also in 2014.

--MOL shares closed up 1.8% Monday at HUF13,590 on the Budapest Stock Exchange.

Write to Veronika Gulyas at [e-mail]

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