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MOL Q1 profit falls; core EBITDA up 47% on strong downstream

May 08/2015

MOSCOW (MRC) -- Hungarian oil and gas group MOL Plc's first-quarter net profit fell 56 percent from a year earlier, but its core EBITDA jumped 47 percent in annual terms, thanks to a strong performance of its downstream and petrochemicals businesses, said Reuters.

The company's so called clean EBITDA, or core earnings, stood at 154.1 billion forints (USD570.3 million), exceeding analysts' median forecast of 145.3 billion in a poll by business website Portfolio. It was also above 146.5 billion forints in the fourth quarter of 2014.

MOL posted a net profit of 9.1 billion forints, which was below the profit of 20.8 billion in the corresponding period of last year, but showed a big improvement from a loss of 69.3 billion forints for the fourth quarter of 2014.

MOL operates refineries in Hungary, Slovakia and Croatia. It also has exploration and production assets in the North Sea and countries including Pakistan, Iraq, and Russia.

"We are even more confident that our annual USD2 billion clean CCS EBITDA target can be achieved," MOL Chairman and Chief Executive Zsolt Hernadi said in the first-quarter report. MOL said low crude prices weighed on its upstream performance, but its downstream segment produced its historically strongest first-quarter result.

"The strong performance was supported by stronger USD, further improving refining conditions as well as sustained width of the integrated petrochemical margin," MOL said.

This year MOL had launched a new three-year programme in its downstream business to boost profitability. In the first quarter, MOL's downstream business reported a rise in the so called clean EBITDA to 74.3 billion forints from 22.2 billion in annual terms, despite the fact that fuel market demand tends to be seasonally the weakest in the first quarter of the year. A weakening of the forint versus the dollar contributed to the downstream result.

In upstream, MOL's daily production was 103,300 barrels per day, compared with 103,500 barrels in the previous quarter. Upstream EBITDA, excluding special items, was 60.7 billion forints compared with 65.3 billion in the fourth quarter of 2014, and was 23.2 percent lower year-on-year.

As MRC informed earlier, MOL is applying its squeeze-out right for shares of petrochemicals company TVK, a Hungarian manufacturer of olefins and polyolefins such as polyethylene and polypropylene. The agency added that MOL wound up a voluntary public purchase offer for the shares on Friday, raising its stake in TVK from 94.86% to 99.1%, providing all preconditions were met.

MOL previously said Hungarian authorities had dismissed the allegations against MOL, which now holds a 49.1% share of INA. Hungary's government holds a 24.6% stake in MOL.
Author:Anna Larionova
Tags:PP, PE, petrochemistry, MOL, TVK, Hungary.
Category:General News
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