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MOL Q1 earnings up 28% as inventories rise

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Hungarian oil and gas company MOL?s first-quarter net income rose 28% to HUF 93.9 billion from the corresponding period a year earlier, lifted by a big increase in inventories, an earnings report released early today shows, according to state news agency MTI.

After-tax profit climbed 36% to HUF 93.6 bln, well over the HUF 73.6 bln estimate by analysts polled by economic news portal portfolio.hu. Earnings per share came to HUF 1,067.

Total revenues rose 37% to HUF 965.6 bln. Costs of raw materials and consumables increased at a much faster rate, climbing 53% to HUF 718.0 bln.

In spite of the narrowing margin, operating profit was up 112% at HUF 120.0 bln, supported by a big increase in inventories. Inventories and work in progress rose HUF 39.5 bln in Q1, compared to a HUF 19.1 bln decline in the base period.

Revenue of MOL?s upstream business increased 26% and EBITDA climbed 54% to HUF 109.8 bln. Sales of the downstream business jumped 45% to HUF 837.3 bln, while EBITDA increased 68% to HUF 107.2 bln.

The report shows retail petrol sales rose about 5% to 271 kt, while retail diesel sales were up 13% at 686 kt during the period. 

The report noted that about two-thirds of the HUF 55.2 bln in capital expenditures during the period went on the continued roll-out of Fresh Corner convenience store-like businesses in petrol stations. The non-fuel margin at MOL?s petrol stations reached 24% during the period.

Chairman-CEO Zsolt Hernádi attributed the Q1 earnings growth to a "supportive external environment," improved efficiency and a "low-cost, high-quality" asset base. He reiterated the target for full-year EBITDA of "at least USD 2 bln."

MOL had total assets of HUF 4.1732 trillion at the end of March, up 7% from twelve months earlier. Net equity was up 11% at HUF 1.8953 tln. Non-current liabilities fell 17% to HUF 899.0 bln.

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