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Mol Q2 profit surges on refining margins

Mol Nyrt, Hungary's largest energy company, said Q2 profit increased 19% as higher demand for oil products made refining more lucrative. Net income was Ft 76.7 billion ($364.5 million), or Ft 799 per share, from Ft 64.3 billion, or Ft 623, a year earlier, the Budapest-based company said yesterday. Sales grew 29% to Ft 702.2 billion. Rising crude oil prices and refining margins well above the historical average helped lift profit in the Q2, the company said. „This is a positive surprise,” said Tamás Pletser, an analyst at Erste Bank in Budapest. „Especially, as results of the refining and marketing division were better than expected.” Shares of Mol gained 14.8% this year, valuing the company at Ft 2.5 trillion ($12 billion). „Margins on fuel products were favorable and the price difference between the Brent and Urals crude increased,” Mol CFO József Molnár said in a phone interview. He said he did not expect oil prices to significantly decline in H2 of this year.
The company's exploration and production unit had operating profit of Ft 32.5 billion in the Q2, compared with Ft 24.1 billion a year earlier. Its refining and marketing division posted operating profit of Ft 69.1 billion in the Q2, a 38% rise. Gasoline demand grew by 6% in Hungary, Mol's key market, and by 5% in Slovakia in the H1 of this year, the company said. Sales in Austria declined as Mol said it had problems shipping fuels to the country on the Danube River.
The number of Mol fuel stations fell to 812 by the end of the Q2 from 853 a year earlier after the company sold its Polish stations and shut down 18 units in Slovakia. Operating profit at Mol's gas division, excluding the wholesale and storage unit the company sold to Germany's E.ON AG in March, fell 11% in the quarter. Mol had a profit of Ft 81 billion from the sale of its two gas units in the Q1, which the company said it would spend on exploration, refining and marketing. Its petrochemical business, which includes TVK Nyrt, Hungary's largest chemical company, had a bit risen operating profit of Ft 3.9 billion, compared with Ft 3.7 billion a year earlier. Mol does not expect a major improvement in petrochemical margins in the H2 of this year, Molnár said. The company had a loss on the interests of foreign currency loans due to the strengthening of the euro and the US dollar against the forint in the Q2. (Bloonberg)