Hungarian MOL Sees Earnings up 10%

Hungary’s integrated energy producer MOL reported February 22 target-beating profits for last year that were up by a tenth on 2017 and the best since 2010.

Earnings before interest, tax, depreciatation and amortisation (Ebitda) rose 10% in 2018 compared with 2017, comfortably beating its target. It said its upstream and consumer services continued to increase their contributions significantly, but the margins from petrochemicals slumped.

Clean current cost of supplies (CCS) Ebitda rose by 16% in the last quarter compared with Q4 2017, resulting in $2.69bn for the whole year. MOL continued its strong free cash flow generation at $1.4bn with upstream generating nearly 70% of that.

Upstream Ebitda was the largest contributor, bringing $1.269bn, up 49% thanks to higher oil and gas prices and the contribution of “high-margin barrels from the UK's Catcher field.”

As the field reached plateau, total production averaged 115,000 barrels of oil equivalent/day, bringing the full year average to 111,000 boe/d.

Downstream Clean CCS Ebitda dropped 16% to $995mn for the year owing to lower refining and significantly lower petrochemical margins. However it saw $110mn efficiency improvements from its DS 2022 programme and higher volumes.

The gas midstream segment reached $189mn Ebitda in 2018, 15% less than in 2017 owing to tariff changes and rising energy cost.

CEO Zsolt Hernadi said 2018 was a year of continued transformation. Upstream generated nearly $1bn free cash flow and output rose. “We have very strong foundations – a robust balance sheet on the back of several years of strong free cash flow generation, a resilient, integrated businessmodel and a talented and dedicated workforce – to look into 2019 with optimism. We expect to deliver around $2.3bn Ebitda this year, assuming a more conservative downstream environment and dated Brent averaging $60/bbl. This shall provide us enough cash flow to cover the increasing investments into our major transformational projects." he said.