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Mol Q2 profit surges on oil price

Mol Nyrt, Hungary's largest energy company, said quarterly profit increased 19% as crude prices rose and refining margins widened on more demand for oil products. Net income for the second-quarter ended June 30 was 76.7 billion forint ($364.5 million), or Ft 799 per share, from Ft 64.3 billion, or Ft 623 a share, in the year-earlier period, the company said in a stock exchange statement. Sales increased 29% to Ft 702.2 billion. Budapest-based Mol is shifting its focus to crude oil and gas production after spending more than $1 billion in six years buying filling stations and refineries in eastern Europe. Rising crude oil prices and improved profitability at its refining business helped lift profit in the second quarter. Refining margins were strong in the quarter and Mol was able to enforce it in its prices, said András Zékány, an analyst at ING Wholesale Banking in Budapest, before Mol published its earnings. Mol said the price of the Russian Urals crude oil also rose 34% in dollar terms compared to the H1 of last year, as demand was expected to rise faster than supplies. Operating profit rose 32% to Ft 102.3 billion, from Ft 77.4 billion a year ago, Mol said. The exploration and production unit had operating profit of Ft 32.5 billion in the Q2, compared to Ft 24.1 billion a year earlier. Its refining and marketing division posted operating profit of Ft 69.1 billion in the Q2, 38% higher than the year before. Operating profit at Mol's gas division fell 11% in the quarter. Mol had a profit of Ft 81 billion from the sale of its two gas units in the first quarter, which the company said it would spend on exploration, refining and marketing. Mol's petrochemical business, which includes TVK Nyrt, Hungary's largest chemical company, had operating profit of Ft 3.9 billion, compared with Ft 3.7 billion a year earlier. Mol is also looking to expand in the Balkans. The company and Croatia's INA Industrija Nafte d.d., of which Mol owns 25%, signed a preliminary agreement last week with Bosnia to buy state-owned fuel retailer Energopetrol for $145 million in cash and investments. (Bloomberg)