Hungary MOL’s Q2 net seen boosted by forex gains


Normal 0 21 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Normál táblázat"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Hungarian oil and gas firm MOL is seen quadrupling its Q2 net income from a year ago with hefty forex gains on its debts boosting its bottom line, and on a strong downstream performance.

Downstream profits were boosted by a jump in diesel crack spreads and also inventory gains, despite a weak dollar which had a negative impact on MOL’s upstream and downstream segment. MOL is expected to report a Ft 107.65 billion ($691.3 million) Q2 net profit, compared with Ft 26.9 billion in the Q2 of 2007, according to average estimates from nine analysts in a Reuters poll on Friday. MOL’s operating profit is seen declining by 5.9% to Ft 83.15 billion from Ft 88.4 billion reported a year ago.

Analysts said MOL’s net income soared as unrealized paper gains on the revaluation of its foreign-currency denominated debt boosted profits due to a sharp firming of the forint. “MOL had a good 2Q08 period, although the bottom line is mainly driven by foreign exchange gains on EUR and USD denominated loans. On the operational side, Refining & Marketing had good quarter, which is counterbalanced by a disastrous petrochemical profit,” said Tamás Plester, analyst at ING.

MOL’s upstream segment benefited from rising crude prices which offset the impact of a weak dollar. Soaring diesel crack spreads worked in MOL’s favor as MOL’s product slate is geared towards diesel, but the company’s petrochemicals segment is seen posting big losses as margins collapsed due to a surge in feedstock prices, analysts said. “The result will not be the main driver of the stock price: investors are concentrating more on the negotiations with the Croatian government to buy INA and/or the potential talks with Austria’s OMV to buy back MOL shares,” ING’s Pletser said.

Austrian oil and gas group OMV called off its unsolicited $23 billion bid for MOL on Wednesday, ending a long-standing deadlock, but OMV still holds a 20.2% stake in MOL.

MOL, which has a 25% stake in Croatia’s INA, has said it would bid for all INA shares not held by the Croatian government and is expected to give details of its bid by August 14. (Reuters)


Heavy Rains Expected This Week to Ease Drought Weather

Heavy Rains Expected This Week to Ease Drought

Hungary Treats Smooth EU Transition as Priority, Says Bóka EU

Hungary Treats Smooth EU Transition as Priority, Says Bóka

HU-rizon Program: HUF 8 bln Funding for International Resear... Science

HU-rizon Program: HUF 8 bln Funding for International Resear...

Inspiring Women at the Focus of Gourmet Fest In Budapest

Inspiring Women at the Focus of Gourmet Fest


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.