By Margit Feher
BUDAPEST--Central European integrated oil and gas company MOL
Nyrt. (MOL.BU), Hungary's largest firm by revenue, raised Wednesday
its 2015 earnings estimate after reporting its strongest quarterly
results for April-June, boosted by robust refining profits.
"We expect to significantly exceed our previous expectations and
surpass our 2015 clean earnings before interest, tax, depreciation
and amortization target by 10%--reaching a level around $2.2
billion and matching our 2014 performance," Chairman and Chief
Executive Zsolt Hernadi said. That forecast holds even amid an oil
price environment of $60 a barrel, the company added.
In the second quarter, MOL's clean Ebitda, a key indicator of
profitability in the oil industry, was 179.5 billion Hungarian
forints ($639.8 million), up 89% from HUF95.1 billion a year
earlier. It beat analysts' median forecast by 5.7% in a poll by
Hungarian online business news agency Portfolio for HUF169.9
billion. Clean earnings don't include the revaluation of
inventories and one-off items.
Net profit rose to HUF62.7 billion, from HUF24.0 billion a year
earlier. As a result, earnings rose to HUF661 a share from HUF245 a
share a year earlier and versus analysts' forecast for HUF565.6 a
share.
Downstream--or refining and marketing--operations posted their
historically strongest quarterly result on a further strengthening
of refining margins, highest ever petrochemical margins and
seasonal increase in demand. Gasoline consumption of Hungary,
Slovakia and Croatia grew by 5% and approached pre-crisis peaks,
MOL said. Downstream clean Ebitda amounted to HUF127.4 billion, up
steeply from HUF28.6 billion a year earlier and exceeded analysts'
forecast for HUF112.7 billion.
The clean Ebitda of the upstream--or exploration and
production--segment was HUF53.5 billion, down from HUF62.4 billion
and also lower than analysts' forecast for HUF55.0 billion.
Although oil prices recovered somewhat from first-quarter lows,
natural gas prices came under pressure due to the about six-month
time lag applied in its pricing versus oil prices. Reduced
regulated gas prices in Croatia, impairment charges in Egypt
dampened the results.
Production output, meanwhile, remained nearly flat in comparison
to the previous quarter, reaching 104,000 barrels of oil equivalent
a day during the second quarter as Kurdistani and North-Sea barrels
replaced diminishing Hungarian and Croatian output.
MOL indicated Wednesday that it's ready to seek out further
acquisition targets to expand its international exploration and
production portfolio.
MOL "can benefit from the lower oil price environment by seizing
attractive new opportunities in the markets where we operate. We
aim to balance further the portfolio in terms of country risk," it
added.
Furthermore, the company has reviewed its growth prospects
excluding acquisitions. It anticipates organic capital expenditure
will amount to $1.3 billion this year, financed from its operating
cash flow.
Write to Margit Feher at margit.feher@wsj.com; Twitter:
@margitfeher
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