By Margit Feher
BUDAPEST--Central European integrated oil and gas company MOL
Nyrt. (MOL.BU), Hungary's largest firm by revenue, beat
first-quarter earnings expectations Friday on robust refining,
higher-than-expected exploration and production, and gas
transmission results.
Based on strong, "we are even more confident that our annual $2
billion clean earnings before interest, tax, depreciation and
amortization target can be achieved," Chairman and Chief Executive
Zsolt Hernadi said. "This highlights the strength of our integrated
business model," Mr. Hernadi added.
In the January-March period, MOL's clean Ebitda, a key indicator
of profitability in the oil industry, was 154.1 billion Hungarian
forints ($569.2 million), up 47% from HUF104.6 billion a year
earlier. It beat analysts' median forecast by 6% in a Portfolio
poll for HUF145.3 billion. Clean earnings don't include the
revaluation of inventories and one-off items.
Still, net profit fell to HUF9.1 billion, from HUF20.8 billion a
year earlier, as a result of a massive financial loss due to
foreign exchange losses on borrowings, receivables and payables in
wake of the Hungarian forint's devaluation against the dollar over
the period. Net loss on financial operations totaled HUF57.31
billion, up sharply from HUF20.16 billion a year earlier, eroding
most of the operating profit of HUF64.56 billion.
As a result, diluted earnings fell to HUF68 a share from HUF209
a share a year earlier.
Downstream--or refining and marketing--operations posted their
historically strongest first-quarter result. Clean Ebitda amounted
to HUF74.3 billion due to higher refining margins in wake of lower
refining costs, the dollar's gains against the forint and strong
petrochemical margins, MOL said. That was up steeply from HUF22.2
billion a year earlier and in line with analysts forecast for HUF75
billion.
The clean Ebitda of the upstream--or exploration and
production--segment was HUF60.7 billion, down from HUF79.1 billion
a year earlier on sharply lower crude as well as natural gas
prices, but higher than analysts' forecast for HUF57 billion.
Production output, meanwhile, remained at levels similar to those
in the previous quarter, MOL noted. The segment also benefited from
a stronger dollar.
Natural gas transportation Ebitda totaled HUF18 billion, up from
HUF15 billion a year earlier on higher volumes transmitted, beating
expectations for HUF16 billion.
Write to Margit Feher at margit.feher@wsj.com
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