Hungarian MOL Sees Gas Output, Earnings Dip

Hungarian energy producer MOL delivered current cost of supplies earnings before interest, depreciation and amortisation (Ebitda) of Hungarian forint 144bn ($500mn) in Q1, 2019, down from forint 158.1bn in Q1 2018. Operating profit was also down, at forint 57.3bn from forint 68.6bn, it said May 3.

Upstream Ebitda remained flat year-on-year in the first quarter at forint 79.4bn as strong production offset other negative drivers. Gas production was down, from 54.6mn boe/day to 50.5mn boe/d, meaning it took a smaller share of total output than last year, when it accounted for almost half the total hydrocarbon output of 110mn boe/d.

Overall production edged up in the first quarter to 116,000 barrels of oil equivalent (boe)/day to a seven-year high, driven by the strong performance of the UK assets. These include the Catcher oil field, where production has gone better than expected, according to operator Premier.

Downstream posted a weaker first quarter delivering forint 38.6bn clean CCS Ebitda, 37% lower than in the same period of the previous year. This was due to the deteriorating refining environment which was partly mitigated by strong internal performance. The gas midstream segment reported Ebitda of forint 18.4bn, down from forint 21.6bn in Q1 2018.

CEO Zsolt Hernadi said MOL had delivered over $500mn Ebitda and positive simplified free cash flows in the first quarter, so it was on track to meet its 2019 guidance and to fund its "transformational investments." Earnings declined from a high base as refinery margins were substantially weaker, only partly mitigated by “strong internal performance across all businesses."