Hungary's MOL Tops 1Q Profit Expectations On Robust Refining, Higher E&P

   By Margit Feher 
 

BUDAPEST--Central European integrated oil and gas company MOL Nyrt. (MOL.BU), Hungary's largest firm by revenue, beat first-quarter earnings expectations Friday on robust refining, higher-than-expected exploration and production, and gas transmission results.

Based on strong, "we are even more confident that our annual $2 billion clean earnings before interest, tax, depreciation and amortization target can be achieved," Chairman and Chief Executive Zsolt Hernadi said. "This highlights the strength of our integrated business model," Mr. Hernadi added.

In the January-March period, MOL's clean Ebitda, a key indicator of profitability in the oil industry, was 154.1 billion Hungarian forints ($569.2 million), up 47% from HUF104.6 billion a year earlier. It beat analysts' median forecast by 6% in a Portfolio poll for HUF145.3 billion. Clean earnings don't include the revaluation of inventories and one-off items.

Still, net profit fell to HUF9.1 billion, from HUF20.8 billion a year earlier, as a result of a massive financial loss due to foreign exchange losses on borrowings, receivables and payables in wake of the Hungarian forint's devaluation against the dollar over the period. Net loss on financial operations totaled HUF57.31 billion, up sharply from HUF20.16 billion a year earlier, eroding most of the operating profit of HUF64.56 billion.

As a result, diluted earnings fell to HUF68 a share from HUF209 a share a year earlier.

Downstream--or refining and marketing--operations posted their historically strongest first-quarter result. Clean Ebitda amounted to HUF74.3 billion due to higher refining margins in wake of lower refining costs, the dollar's gains against the forint and strong petrochemical margins, MOL said. That was up steeply from HUF22.2 billion a year earlier and in line with analysts forecast for HUF75 billion.

The clean Ebitda of the upstream--or exploration and production--segment was HUF60.7 billion, down from HUF79.1 billion a year earlier on sharply lower crude as well as natural gas prices, but higher than analysts' forecast for HUF57 billion. Production output, meanwhile, remained at levels similar to those in the previous quarter, MOL noted. The segment also benefited from a stronger dollar.

Natural gas transportation Ebitda totaled HUF18 billion, up from HUF15 billion a year earlier on higher volumes transmitted, beating expectations for HUF16 billion.

Write to Margit Feher at [e-mail]

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