MOL Q1 profit falls 36% as margins shrink

Telco

First-quarter net income of oil and gas company MOL fell 36% year-on-year to HUF 60.3 billion as margins narrowed, an earnings report released early Friday shows. EBITDA fell 19% to HUF 154.3 bln, but MOL said it remains on track to reach its full-year target.

Total operating revenue rose 4% to HUF 1,008.5 bln, but costs of raw materials and consumables climbed at twice that rate, increasing 8% to HUF 778.2 bln. Total operating costs were up 11% at HUF 939.9 bln, dragging operating profit down 43% to HUF 68.6 bln. Earnings per share came to HUF 86 for the period.

In a breakdown by business segment, MOL said downstream revenue rose 4% to HUF 868.9 bln, but EBITDA of the business plunged 52% to HUF 51.3 bln. Upstream revenue was up 5% at HUF 115.8 bln, with this segmentʼs EBITDA climbing 14% to HUF 72.5 bln.

Consumer services revenue jumped 27% to HUF 316.3 bln, and the segmentʼs EBITDA increased 29% to HUF 20.4 bln. Revenue of the gas midstream segment was flat at HUF 30.8 bln, but its EBITDA rose 5% to HUF 21.6 bln, helped by higher transit volumes and lower costs.

"As oil prices kept on climbing and regional demand remained robust, and as refinery and petchem margins came under pressure, impressive earnings growth of the Upstream and Consumer Services segments more than offset the lower Downstream profits," Chairman-CEO Zsolt Hernádi said, commenting on the Q1 results.

MOL retains guidance

MOL said it is "well on track" to achieving its target for EBITDA of USD 2.2 bln (approx. HUF 577 bln) for the full year.

"We managed to grow our EBITDA from a high base in the first quarter, which was a further testament to our resilient, integrated business model and it provides a firm base for another successful year and for the continued work on our strategic transformation," Hernádi said.

MOL had total assets of HUF 4,275.9 bln at the end of March, up 2% from twelve months earlier. Net assets increased 12% to HUF 2,127.8 bln during the period.

MOLʼs long-term liabilities rose 11% to HUF 998.2 bln. Long-term debt was up 17% at HUF 482.6 bln, while long-term provisions rose 8% to HUF 439.3 bln. MOL said its net gearing ratio was "marginally up" at 18%.    

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