MOL Closes Profitable 3Q On Currency Moves

Hungarian oil and gas company MOL Nyrt. (MOL.BU) reported early Tuesday a third-quarter net profit of 36.4 billion forints ($156.9 million), driven by the performance of the upstream business and gains from currency exchange rates.

The figure beats an analyst consensus which expected MOL to produce a quarter in the red on losses from forint weakness. Instead, MOL said it remained profitable due to the fact that third-quarter foreign exchange losses have been recognized on the equity line due to the implementation of net investment hedge accounting.

 
   MAIN POINTS 
 

--The poorer figures were predicted by analysts seeing the continued depreciation of the forint, which hit record low levels around HUF317 against the euro hours before MOL's report was published.

--The move marks a change in the company's strategy, which referred to exchange rate losses as a "natural risk" after the second quarter.

--MOL registered diluted earnings per share of HUF175 vs HUF1,076 in the corresponding quarter of 2010.

--It reported a net financial loss of HUF18.3 billion and an unadjusted earnings before interest and taxes figure of HUF50.8 billion.

--"We are aiming to accelerate our investment programs in Russia, the Kurdistan Region of Iraq and in the core CEE countries. Beside this we are continuously evaluating potential inorganic steps as well," MOL Chief Executive and Chairman Zsolt Hernadi is quoted as saying in the report.

--MOL said there is a risk of recession in the global economic environment at the moment as the latest indicators point towards a marked slowdown in activity.

--MOL closed down 0.9%, or HUF150, at HUF16,850 in Monday's trading.

-By Gergo Racz, Dow Jones Newswires, [phone]; [e-mail]