MOL Q3 profit triples on narrower financial loss, tax refund and deferrals

Telco

Hungarian oil and gas company MOLʼs third-quarter net income rose to HUF 91.3 bln from HUF 28.5 bln in the base period as financial losses narrowed and it benefited from a tax refund and deferrals, according to an earnings report published this morning.

MOL also said it had postponed the write-down of a license it operates in the Kurdistan Region of Iraq – assets with a total book value of $440 mln – from Q3 to Q4.

Revenue fell 16% to HUF 1.125 trillion during the period. Cost of raw materials and consumables fell at a faster pace, by 25%, to HUF 808.9 bln, as crude prices plunged, but total operating costs dropped just 17% to HUF 1.045 trillion on higher depreciation.

Operating profit was down 12% at HUF 80.4 bln.

The impact of the decline on the bottom line was reversed by a smaller financial loss, narrowing to HUF 10.8 bln from HUF 40.9 bln in the base period, as well as a negative tax expense of HUF 15.9 bln, resulting from a refund on a sectoral tax and deferred taxes.

MOL chairman-CEO Zsolt Hernádi confirmed the companyʼs earlier guidance in the report. "With over $1.9 bln delivered in the first nine months, we are more than confident about reaching our $2.2 bln EBITDA target set for this year," he said.

EBITDA was up 62% at HUF 109.6 bln in the downstream segment, supported by "peaking refining margins" and higher fuel consumption, but upstream EBITDA fell 39% to HUF 43.3 bln and EBITDA of the gas business was down 11% at HUF 12.3 bln.

MOL had total assets of HUF 4.774 trillion at the end of September, practically the same as twelve months earlier. Net assets edged up 1% to HUF 2.338 bln. Non-current liabilities fell 12% to HUF 953.2 bln. MOLʼs net gearing ratio rose to 18.2% from 17.1% during the period.

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