One of central Europe’s largest integrated O&G companies, Hungary-based MOL Group, reported record 3Q15 earnings as its downstream unit helped outweigh the impact of low oil prices and a decline in production from its upstream division. Stronger seasonal demand and further widening and petrochemical margins were the main result drivers for the record results.
In its Friday earnings release, MOL Group reported that its net income increased to 91.3 billion forint (HUF) ($316 million) from 28.5 billion forint in the same quarter last year. Earnings before taxes, interest, depreciation and amortization on the basis of a clean-current cost of supplies increased 21% from a year earlier to 198.7 billion forint- the company’s best ever result. Notably, the refining and marketing divisions contributed approximately three-quarters of that result, the most closely watched for the company.
MOL Group’s shares increased as much as 2.1% and by 11:10 a.m. in Budapest were trading 1.7% higher at 13,525 forint- the strongest since September 10. In 2015, MOL Group has advanced 17.2% versus a 34% increase in the benchmark BUX stock index.
Credit: MOL Group, 3Q Report
Zsolt Hernadi, MOL Chairman & CEO, added this color, “The all-time high results once again provided evidence of MOL Group’s robust and resilient integrated business model and its ability to leverage the outstanding Downstream operating environment.”
He continued, “Our Downstream business continues to surpass every expectation with its exceptional performance on the back of our superior asset base and the very supportive macro. With the uninterrupted delivery of efficiency measures and the expansion of the value chain in both petrochemicals and retail we are well-positioned to seize further opportunities in the segment.”
During the first three quarters of this year, the company said that in Downstream, clean-CCS based EBITDA soared to HUF 349bn in the first three quarters of 2015.
MOL Group’s Downstream Operations
This performance was supported by a favorable external macro environment, including a more than doubling in both the Group refinery margin and the integrated petrochemical margin); higher sales volumes, especially
on the petrochemical and retail side; and a substantial weakening of the HUF against the USD.