MOL books HUF 438 bln Q4 loss on asset write-downs

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Hungarian oil and gas company MOL booked a net loss of HUF 437.7 billion in the fourth quarter on asset write-downs, an earnings report published early today shows, Hungarian news agency MTI reported. 

The loss swelled from HUF 69.3 bln in the base period. 

MOLʼs after-tax loss came to HUF 500.8 bln, well over the HUF 239.9 bln estimate of analysts polled by Portfolio.hu. 

Earnings per share came to a negative HUF 4,780. 

MOL booked HUF 504 bln in impairment charges on its assets in Q4. Among the write-downs was HUF 131 bln related to the relinquishment of a license it operated in the Kurdistan Region of Iraq, which the company earlier announced, but they also included HUF 373 bln in asset impairment charges driven mainly by revised oil price assumptions. MOL wrote down HUF 218 bln at its UK assets and HUF 109 bln at its Croatian unit INA. 

“The dramatically changed environment forced us to make some painful yet necessary decisions, including the revision of the fair value of our Upstream assets,” chairman-CEO Zsolt Hernádi (pictured) said in the report. 

MOL noted that excluding one-offs and calculating with current cost of supplies, EBITDA would have edged up 1% to HUF 147.3 bln.  

MOLʼs revenue fell 15% to HUF 998.2 bln during the period. At the same time, cost of raw materials and consumables plunged 27% to HUF 678.4 bln. But the wider margin could not offset the impairment, and operating costs rose 13% to HUF 1.474 trillion to give MOL an operating loss of HUF 475.6 bln. 

Revenue of MOLʼs upstream business fell 32% to HUF 99.2 bln and it had a HUF 494.1 bln loss at operating level, due to the impairment. 

Turnover of the downstream business dropped 19% to HUF 852.4 bln and it had an operating profit of HUF 36.2 bln, a big improvement over a loss of HUF 74.7 bln in the base period. 

For the full business year, MOL booked a net loss of HUF 256.6 bln as impairment weighed. Depreciation, depletion, amortization and impairment jumped 134% to HUF 863.5 bln during the period. 

Full-year revenue fell 14% to HUF 4.19 tln, but cost of raw materials and consumables declined at an even faster rate, dropping 22% to HUF 3.033 tln. However, operating costs dropped just 9% due to the impairment and MOL booked a HUF 216 bln loss at operating level. 

MOL had total assets of HUF 3.928 tln at the end of December, down 16% from twelve months earlier. Net assets dropped 17% to HUF 1.457 tln. Non-current assets fell 12% to HUF 2.861 tln. Non-current liabilities edged up 1% to HUF 461.7 bln. Long-term debt was up 6% at HUF 416.0 bln. MOLʼs net gearing ratio rose one percentage point to 20.6% during the period.

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