MOL Q1 profit falls 57% as forint weakens against dollar

Telco

A wider margin lifted Hungarian oil and gas company MOLʼs first-quarter operating profit, but net income fell 57% to HUF 9.1 bln as the forint weakened against the dollar, causing financial losses to swell, an earnings report published today reveals.

MOLʼs total operating revenue fell 18% to HUF 930.6 bln, but raw material costs declined at a faster pace, dropping 31% to HUF 482.7 bln. Total operating expenses were down 21% at HUF 866.1 bln, lifting operating profit 39% to HUF 64.6 bln.

MOL booked a HUF 57.3 bln financial loss in Q1 as the forint weakened against the dollar, well over the HUF 20.2 bln loss in the base period.

MOLʼs EBITDA, excluding special items and calculated at current cost of supplies, rose 47% to HUF 154.1 bln. The clean CCS-based EBITDA was over the HUF 145.3 bln estimate by analysts polled by Portfolio.hu.

Diluted earnings per share came to HUF 68.

With oil prices low, revenue of MOLʼs upstream business fell 32% to HUF 110.4 bln during the period, while operating profit in the segment decline 63% to HUF 21.6 bln. The report shows prices of Brent and Ural, in dollars, were down 50% year-on-year in Q1.

Revenue of the downstream business also fell, by 19% to HUF 808.9 bln, but it generated HUF 31.6 bln of operating profit, compared to a HUF 3.3 bln loss in the base period.

Revenue of the gas and midstream business was up 12% at HUF 29.8 bln and operating profit climbed 25% to HUF 14.6 bln.

Capital expenditures came to HUF 87 bln, of which HUF 26 bln went to targeted inorganic investments, mainly North Sea and retail network acquisitions. Of the organic CAPEX, HUF 44 bln was spent in the upstream business.

MOL had total assets of HUF 4,602.1 bln at the end of March, practically the same as twelve months earlier. Net assets fell 2% to HUF 2,190.1 bln. Non-current liabilities dropped 10% to HUF 967.0 bln. MOLʼs gearing ratio stood at 21.8%.

Chairman-CEO Zsolt Hernádi (pictured) said MOL had started the year with a "strong financial performance" in spite of the low oil prices. "Having achieved such positive results, we are even more confident that our annual USD 2 bln clean CSS EBITDA target can be achieved," he said.

Since the mid-February, MOL CEO Zsolt Hernádi has, once again, been listed on International Criminal Police Organization’s (Interpol) most wanted persons list after Croatian police issued a warrant for his arrest in the autumn of 2013 on suspicion of bribing former Croatian Prime Minister Ivo Sanader.

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