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Mol releases 2006-2010 strategic and financial targets

Hungarian oil and gas company Mol Rt has released its key 2006-2010 strategic and financial targets, which include attaining a group EBITDA of over $3.5 billion, a group ROACE of 15% and to achieve efficiency improvement of $285 million. The EBITDA target compares to consolidated EBIDTA of Ft 358.2 billion or $1.68 billion at current exchange rates in 2004. Mol said that its growth targets include increasing upstream integration by tripling hydrocarbon production and to double refined product sales by 2010. The efficiency improvement target, of annual $285 million by 2010, includes significant cost savings and better utilization of assets. Mol intends to keep its gearing ratio below 30% (compared to net debt of 24.4% in 2004) and maintain its investment grade credit rating.
It also plans to gradually increase their dividend payout ratio to that of peers (currently 30% of normalized earnings) by 2010.

To achieve these targets, in the Exploration and Production segment Mol intends to triple its hydrocarbon production to 300,000 barrel oil equivalent (boe) per day and triple the total oil and gas reserves to 900 million boe by 2010 whilst maintaining reserve replacement costs under $6.5 boe.
In the Central-Eastern European region Mol aims to expand its exploration and production activity jointly with INA and through new corporate acquisitions.

In the Refining and Marketing segment, Mol's aim is to maintain quality leadership and leverage it to new growth markets. Therefore Mol intends to invest in quality related upgrades in the core markets in order to improve product yields and will also take advantage of appropriate acquisitive opportunities.
The plan is to increase refined product sales to 500,000 barrels per day parallel with optimizing the downstream value chain to maximize profit. Mol targets an efficient group retail network of 1,500 stations by 2010 (compared to 812 at the end of 2004) within its refineries supply radius.
As for the gas business, Mol's objective is to maintain its position in transmission, which provides not only stable cash generation but growth opportunities. Mol intends to increase further its participation in the regional gas transit business, utilizing its unique geographical location.