MOL posts outstanding profit in fourth quarter

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Hungarian oil and gas companyʼs fourth-quarter net income rose 76% year-on-year to HUF 76.6 billion, lifted by higher revenues and a reduced financial loss, shows an earnings report released Tuesday morning and summarized by state news wire MTI.

Revenues climbed 14% to HUF 1,125.1 billion. Costs of raw materials and consumables, as well as total operating costs, increased at practically the same pace to HUF 822.2 bln and HUF 1,063.3 bln, respectively, MTI reported.

Operating profit was up 7% at HUF 61.8 billion. The bottom line was supported by a drop in net financial losses to HUF 3.2 billion in Q4, down from HUF 32.4 billion in the base period.

Fourth-quarter earnings were over the HUF 67.8 bln average estimate by analysts polled by online stock market news site portfolio.hu. Earnings per share came to HUF 109 for the period.

Full-year net income up 17%

For the full year of 2017, MOLʼs net income rose 17% to HUF 307.0 bln. Revenues were up 16% at HUF 4,155.9 bln. Costs of raw materials and consumables increased 20% to HUF 3,080.6 bln, while total operating costs climbed 16% to HUF 3,801.5 bln.

Operating profit rose 15% to HUF 354.4 bln. MOL booked a HUF 6.7 bln financial loss for the year, well under the HUF 49.8 bln loss in the base period. Earnings per share reached HUF 437.

In a breakdown of sales by business segment, MOL said upstream revenue rose 11% to HUF 411.7 bln, while downstream revenue climbed 20% to HUF 3,643.5 bln. Revenue from consumer services increased 13% to HUF 1,128.0 bln.

Upstream EBITDA jumped 27% to HUF 232.5 bln, and downstream EBITDA fell 6% to HUF 326.5 bln. EBITDA of consumer services increased 13% to HUF 97.3 bln.

Guidance: USD 2.2 bln EBITDA in 2018

In guidance issued with the earnings report, MOL put its 2018 EBITDA, at current cost of supplies and adjusted for one-off effects, at around USD 2.2 bln.

MOL Chairman-CEO Zsolt Hernádi said the USD 2.2 bln EBITDA "will allow us to fund our transformational projects as well as the rising dividends to our shareholders."

MOL projected organic CAPEX of USD 1.1-1.3 bln, including up to USD 300 million on strategic projects, for 2018. It put upstream production at around 110,000 barrels of oil equivalent per day.

MOL noted that clean CCS EBITDA reached USD 2.45 bln in 2017, over its USD 2.3 bln upgraded guidance for the year. Organic CAPEX reached USD 1.04 bln.

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