By Veronika Gulyas

BUDAPEST--One of central Europe's largest refineries and Hungary's biggest company by revenue MOL Nyrt. (MOL.BU) saw its clean earnings before interest, taxes, depreciation and amortization, one of the key indicators for the sector, drop by 17% on the year in the second quarter amid lower prices and increased exploration spending.

MAIN FACTS:

--The company, which is in the middle of large-scale reorganization, saw clean Ebitda of HUF95 billion ($405 million) versus HUF97.5 billion forecast by analysts in a poll by portfolio.hu.

--Lower hydrocarbon price driven by lower Croatian gas prices, a drop in production after MOL sold 49% of its Baitex field in Russia, royalty rate rising to 10% from 5% in Croatia and higher exploration spending.

--Net profit rose by 27% in the second quarter versus a year ago to HUF24 billion forints, compared to HUF23.4 billion expected.

--Earnings dropped to HUF221 versus HUF243 per share a year earlier.

--In full 2014, capital expenditure or Capex is expected to total $1.6 billion-$1.9 billion, skewed toward the firm's upstream segment with above 50% contribution. Capex stood at HUF247 billion at the end of June, of which HUF98 billion was spent on acquisition.

--Indebtedness ratio, or net gearing narrowed to 18.5% versus 21.3% a year ago, MOL said.

--MOL suffered from lower production amid restructuring its portfolio, but Zsolt Hernadi, chief executive and chairman said he expects to see higher production levels from the next quarters onward.

--The company sees opportunities in expanding its regional retail markets, Mr. Hernadi was quoted as saying in the report. "We recently acquired more than 200 service stations from [Italy's] eni and I hope we can announce further deals in the region soon," the CEO said.

--MOL shares closed down 0.5% at HUF11,345 on the Budapest Stock Exchange.

Write to Veronika Gulyas at veronika.gulyas@wsj.com; Twitter: @VeronikaGulyas1

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