Hungarian oil and gas company MOL had a first-quarter loss of HUF 48.4 billion as FX and inventory losses weighed, state news wire MTI reports, citing an earnings report released early Thursday.
The loss compared to net income of HUF 48.6 bln in the base period.
MOL said the sharply weaker forint gave it a big, albeit mostly unrealized, FX loss in Q1, while a negative current cost of supply modification, due to large inventory holding losses and end-of-period net realizable value adjustments, also weighed.
The company booked a HUF 88.8 bln financial loss in Q1, swelling from HUF 4.2bn in the base period. It also booked a HUF 58 bln change in inventory of finished goods and work in progress, up from HUF 8.2 bln in the base period.
Total revenue rose 3.5% to approximately HUF 1.186 trillion. Cost of raw materials and consumables climbed at a slower pace, increasing 1.9% to HUF 890.6 bln.
A breakdown by business segment shows net sales revenue of MOLʼs downstream business slipped 2.2% to HUF 977.4 bln. The business generated a HUF 11.1 bln operating loss in Q1, compared to a modest operating profit of HUF 3.3 bln in the base period.
Upstream revenue dropped 19.6% to HUF 102.2 bln, and the businessʼs operating profit plunged 63.8% to HUF 15.8 bln.
MOLʼs consumer services segment continued to show marked growth, as revenue of the business increased by 5.5% to HUF 372.6 bln, but its operating profit dropped 17.1% to HUF 14.4 bln. MOL noted that the lockdown due to the coronavirus pandemic in the last two-three weeks of March wiped out much of the strong growth experienced earlier in Q1 both in fuel and non-fuel margins.
The company said its organic CAPEX increased 3% to USD 294 million. USD 126 mln was spent on transformational projects, including USD 111 mln on MOLʼs new polyol plant, while sustain CAPEX was USD 167 mln.
MOL said the polyol project reached 60% completion at the end of Q1, adding that the erection of steel structures is ongoing, while big, pre-fabricated equipment is either en route or has already reached the site. It acknowledged that the pandemic has affected the projectʼs supply chain and is making workforce mobilization "increasingly difficult". MOL said the pandemicʼs full impact on the project schedule "is not yet possible to assess, but delays are expected".
MOL laid the cornerstone of its EUR 1.2 bln polyol plant last autumn. With the investment, MOL is adding polyols, an essential component of polyurethane which goes into furniture, building materials, and car parts, to the production palette at its petrochemicals unit in Tiszaújváros (about 160 km east of Budapest). The plant, with an annual capacity of 200,000 tonnes, was originally slated for completion by 2021.