MGYOY Mol Magyar Olay Es Gazipari Rt (PK)

   By Margit Feher 
 

BUDAPEST--Second-quarter earnings of Budapest-based integrated oil-and-gas company MOL Nyrt. beat analysts' forecasts as a result of rising fuel demand in central Europe and the acquisition of gas stations, making the company confident it will be able to meet its full-year profitability goal of over $2 billion.

Clean earnings before interest, tax, depreciation and amortization, a major indicator of profitability in the oil industry that investors watch closely, was 160.1 billion forints ($575.6 million) for the period, up 11% from the previous quarter but down 10% from a year earlier. Still, it beat analysts' expectations of HUF158.8 billion for April-June, according to a poll of nine independent analysts conducted by the company. Clean earnings don't include the revaluation of inventories and one-off items.

As a result of its second-quarter performance, MOL, Hungary's largest firm by revenue, "remains fully on track to deliver" its over $2 billion clean Ebitda target for 2016, Chairman and Chief Executive Zsolt Hernadi said in a filing with the Budapest Stock Exchange. Clean Ebitda already totaled half that in the first six months, coming in at $1.09 billion for the period.

In the second quarter, downstream operations managed to offset a normalization foreseen in refinery and petrochemicals margins with increased processing, rising sales volumes and considerable growth in retail Ebitda year-on-year, the company said.

Downstream--or refining and marketing--clean Ebitda was HUF116.2 billion, down 8% from a year earlier "on a softening of the macroeconomic environment," the company said. That was, however, higher than analysts' forecast for HUF110.8 billion.

The clean Ebitda of the upstream--or exploration and production--segment was HUF48.6 billion, down 9% from a year earlier and in line with analysts' expectations for HUF48.1 billion. Rising 15% from the previous quarter, upstream operations returned to quarterly growth on the back of rising oil prices, MOL said.

Average oil and gas production fell 1.2% from the previous quarter and increased 6.9% from a year earlier to 110,800 barrels of oil equivalent per day, on higher oil production in Kurdistan and rising onshore production in central and Eastern Europe while Croatian offshore production declined and crude output in the U.K. also fell.

The downstream and upstream results highlight "the resilience of the integrated business model, the proof of which is that we are continuously generating strong cash flow," Mr. Hernadi said, citing also a recent credit-rating upgrade and a new EUR615 million ($688.4 million) syndicated credit facility.

In the second quarter of this year, the company generated a net profit of HUF83.5 billion, up by a sharp 45% from HUF57.5 billion a year earlier. That was also higher than analysts' expectation for HUF76.4 billion. It translated to earnings of HUF908.2 a share, up from HUF604.0 a share a year ago.

Write to Margit Feher at margit.feher@wsj.com

(END) Dow Jones Newswires

August 04, 2016 19:32 ET (23:32 GMT)

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