MOL Earnings Fall by Third in Q2

MOL's core earnings (Ebitda) fell by a third year on year to forints 124.1bn ($424mn) in the second quarter, the Hungarian oil firm said on August 7.

Upstream Ebitda, excluding special items, was down 54% at forints 56.4bn, whereas downstream Ebitda declined 40% to forints 23.8bn. Its gas midstream business performed well, with Ebitda soaring 115% yr/yr to forints 21.9bn, while consumer services increased 4% to forints 27bn.

"MOL faced unprecedented challenges in the second quarter of 2020, from significant health and safety risks stemming from the pandemic, to major operational issues in running our plants during the lockdown, whilst making sure we preserved our financial strength," CEO Zsolt Hernadi said.

Free cash flow was stable yr/yr in the first half at $356mn, despite the earnings slump, thanks to capital expenditure cuts. 

MOL expects full-year Ebitda of $1.7-1.9bn, down from an earlier guidance of $2.5bn. The company sees capital expenditure in 2020 totalling $1.5bn, it said, forecasting sustained free cash flow during the year.

The company net debt/Ebitda increased to 1.63 and gearing rose to 29%, due to MOL completing its $1.5bn takeover of Chevron's stake in the Azeri-Chirag-Gunashli (ACG) fields in Azerbaijan in April.