MOL Earnings Fall on Narrower Margins, Windfall Profit Taxes
Q2 net income of Hungarian oil and gas company MOL fell 74% year-on-year to HUF 78.5 billion as margins narrowed and windfall profit taxes weighed, an earnings report released ahead of the opening bell on Friday shows, according to news agency MTI.
Total operating revenue fell 19% to HUF 1.993 tln.
The cost of raw materials and consumables fell at a slightly faster pace, dropping 20% to HUF 1.479 tln, but total operating costs declined just 9% to HUF 1.922 tln.
Operating profit plunged 81% to HUF 70.6 bln.
Earnings per share came to HUF 105 for the period.
MOL said windfall profit taxes at its businesses in Central and Eastern Europe added up to around USD 600 mln in Q2. Clean EBITDA, at the current cost of supplies, came to USD 411 mln.
MOL chairman-CEO Zsolt Hernádi warned that the current level of windfall profit taxes would cause the group's competitiveness to "deteriorate" and "burden our cash flow generation needed for our investment plans".
Disregarding the negative external effects, MOL's group-level operational performance was "robust", he added and pointed to the continuation of strategic investments and the launch of a new waste management business.
A breakdown by business segment in the report shows upstream revenue dropped 42% to HUF 162.7 bln and its operating profit slipped 95% to HUF 8.4 bln. MOL noted the impact of weaker hydrocarbon prices and a production outage in Kurdistan on the business.
Downstream sales declined 31% to HUF 1.616 tln, while the segment's operating profit fell 94% to HUF 14.2 bln, hit by margin pressure in the petrochemical segment and a less favorable macroeconomic environment in refining.
Sales of the consumer services business rose 4% to HUF 839.7 bln and operating profit reached HUF 16.2 bln as price cap regulations eased and non-fuel performance improved.
MOL put guidance for full-year EBITDA at around USD 2.5 bln.
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