MOL accelerates pivot to low-carbon, sustainable business model
Hungarian oil and gas company MOL said it will increase its climate-friendly investments, aligned with the European Union's classification system for environmentally sustainable economic activities, to over 50% of CAPEX by 2030 and close to 100% by 2050, or earlier, in an update of its long-term strategy issued Wednesday, according to a report by state news wire MTI.
MOL said it wants to "play a key role in shaping the low-carbon circular economy with investments in new businesses such as waste integration and utilization, recycling, carbon capture, utilization and storage (CCUS), advanced biofuels, and potentially hydrogen-related opportunities".
The company added that it will spend USD 1 bln in the next five years on new, low-carbon and sustainable projects "to become a key player in CEE in the circular economy".
MOL confirmed goals outlined in its 2030 strategy, issued in 2016, to shift from fuels to chemicals, and from fuel retailing to consumer goods and mobility.
"Our updated strategy seeks to accelerate our transformation process to enhance MOL's resilience and our ability to shape a sustainable future. We will sharpen our focus, increase our efficiency further, while seeking new opportunities with a new determination," chairman-CEO Zsolt Hernádi said.
"One thing has not changed since 2016: we remain deeply committed to the transformation of our traditional fossil-fuel-based operations into a low-carbon, sustainable business model," he added.
The updated strategy sees annual EBITDA rising from USD 2.3 bln in 2021 to USD 2.6 bln in 2025. It targets annual downstream EBITDA of over USD 1.2 bln by 2025, supported by USD 150 mln of efficiency improvements, while EBITDA of the consumer services business climbs over USD 700 mln. The strategy puts simplified free cash flow of the upstream business around USD 1.8 bln in 2021-25, assuming crude prices of USD 50 per barrel.
MOL said operating cash flows in 2021-25 would be sufficient to cover "sustain" CAPEX as well as USD 3.5 bln in strategic CAPEX and "stable base dividends" for shareholders.
"Keeping a strong financial profile through a robust balance sheet and ample financial headroom remains a priority," MOL said.
"This flexibility may be used to fund new business opportunities including cash-generative M&A in any business lines," it added.
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