Hungarian oil and gas company MOL on Wednesday said it is withdrawing its guidance for 2020 EBITDA because of uncertainty related to the coronavirus pandemic, according to a report by state news wire MTI.
The guidance is being withdrawn because of "the uncertainty related to the duration and impact of the coronavirus pandemic, the extreme volatility of the external environment and the unpredictability of volumes development across our businesses", MOL said.
MOL said 2020 CAPEX will be "at least 25% lower" than the original guidance of USD 1.9 billion-2.1 bln - at below USD 1.5 bln - because of the delay of non-essential investments and supply chain bottlenecks caused by lockdowns.
MOL said it will soon complete a comprehensive review of operating costs "to support our goal of cash preservation".
"All measures ultimately serve the purpose to preserve cash and allow for MOL to maintain cash neutrality, while our operations are running uninterrupted," it added.
Even after closing the acquisition of a stake in the Azeri-Chirag-Gunashli oil field in the Caspian Sea, MOL said it will continue to have ample liquidity with "around USD 2 bln-2.5 bln financial headroom in the form of cash and cash equivalents and undrawn credit facilities".
"This should allow MOL to successfully manage through these challenging times even in the case of a longer-lasting crisis and also to accelerate activities and grab opportunities once normalization begins," it added.
MOL said its board is proposing placing all of last yearʼs profit into retained earnings, in line with short-term efforts focusing on cash preservation and retaining maximum flexibility.
"Once the situation normalizes and circumstances allow for it, these retained earnings may be used for cash dividend distribution upon the decision of shareholders," it added.