MOL Profit Plunges in First Quarter on Syrian Output Halt

By Veronika Gulyas

BUDAPEST--Hungarian energy group MOL Nyrt. (MOL.BU) net profit fell sharply in the first quarter on a halt in Syrian output and low demand for fuel amid slow economic growth, MOL's earnings report showed Tuesday.

MAIN FACTS:

-MOL registered net profit of 32.3 billion Hungarian forints ($142.5 million) in the first quarter of 2013, compared with HUF73.9 billion profit in the corresponding period of last year and less than analysts' median expectation of HUF40 billion.

-MOL's average daily hydrocarbon production was 110 million barrels equivalent, down from 134 million a year earlier on lower crude-oil production across MOL's fields and a decline in natural gas production in Hungary, partly offset by increasing offshore natural-gas output.

-Other key factors pulling down the bottomline include lower revenue from Hungarian domestic gas transmission due to a relatively mild weather and a cut in tariffs. In the meantime, MOL saw improving performance in its downstream segment, supported by an improved gasoline crack spread and efficiency.

-MOL's net debt rose to HUF784 billion in 2013 from HUF749 billion at the end of 2012, driven by a weaker forint. In the meantime, net gearing dropped to 25% from 29% a year earlier.

-The company posted earnings a share of HUF327 in the first quarter, versus HUF706 in the same period in the previous year.

-MOL Chairman and Chief Executive Zsolt Hernadi said this year has so far proven as challenging as expected amid slow economic growth, but the company is nevertheless making an effort to ensure medium-term growth potential by acquisitions and further streamlining.

-"We still strive for maintaining financial stability," Mr. Hernadi said, adding MOL is capable of carrying out acquisitions and renew its asset base both in the upstream and downstream segments.

-MOL closed trading up 0.4% or HUF60 at HUF16,610 Monday.

Write to Veronika Gulyas at [e-mail]