MOL's Core Earnings up in Q1

Hungarian oil firm MOL reported May 7 a 21% yr/yr growth in core earnings for the first quarter, despite the Covid-19 pandemic and the resulting collapse in oil prices. However, it also swung to a net loss of $152mn, owing to inventory and foreign exchange losses.

Clean current cost of supplies (CCS) Ebitda came to $622mn in the three-month period, up from $514mn a year earlier. Upstream earnings were down 35% at $185mn, owing to weaker prices. Production was more or less flat at 110,600 boe/d in the first quarter.

MOL reported a surge in downstream earnings to $295mn, from only $138mn in the first quarter of 2019. The company said its refining and petrochemical margins were stronger, with the pandemic having no material impact on volumes during the three months. The second quarter will be tougher, as Hungary and other central European countries began imposing lockdowns in late March.

Earnings from MOL's consumer services division were flat at $88mn, as a slump in activity in the last weeks of March more than offset strong growth earlier in the year. Gas midstream earnings increased 7.6%, due to higher volumes and lower operating costs.

"The pandemic and economic crisis that follows will cast a long shadow on our overall performance in 2020, CEO Zsolt Hernadi said. "We have already made a series of difficult decisions that will help us to achieve cash neutrality, to maintain our liquidity and financial flexibility and to grab opportunities which may arise on the way towards normalisation."

MOL has cut its capital spending plan in 2020 by 25% to under $1.5bn, and has also postponed the payments of dividends.