Hungary's Mol Sees Production Decline

Hungarian producer and refiner Mol's pre-tax profits (clean CCS Ebitda), which reflects underlying business performance, were roughly flat year on year at $576mn in 3Q2017, although up 12% at $1.87bn in 9M2017.

The company said November 3 it made a 3Q2017 net profit of $184mn (forints 47.7bn), taking 9M profit to $823mn.

Average daily production of 104,500 barrels of oil equivalent in 3Q 2017 was down 4% year on year, but higher prices meant that Mol's upstream segment contributed $188mn Ebitda in 3Q, up 12%. Volumes were lower due to natural field declines in central Europe (including unplanned 3Q shutdowns in Hungary), divestments in Russia, and lower UK oil output.

Downstream’s Ebitda was 9% lower year on year at $271mn in 3Q 2017 on lower margins.

Gas midstream, including Hungarian gas grid FGSZ, saw Ebitda only 2% lower year on year at $44mn, despite adverse tariff changes and higher (energy) costs in running the grid, thanks to higher use of gas storage and capacities, and a 70% year on year rise in domestic transmission volume.

Relating to its role as Croatian producer/refiner INA's largest shareholder, Mol said that during 3Q 2017 the Swiss Supreme Court rejected the Croatia government’s appeal of the first arbitration award, leaving the arbitration tribunal’s original decision – which dismissed all Croatia’s claims based on bribery, corporate governance and alleged breach of the shareholders agreement – in place.

Mark Smedley