Hungary's MOL Posts 3Q Net Loss but EBITDA Up from Prior Quarter
BUDAPEST, Nov 15 (Reuters) – Hungarian oil and gas group MOL posted a quarterly net loss, hit by an impairment charge to convert a refinery into a logistics hub, although its refining and processing business put in its best performance in three years.
It said its results for the first nine months of the year were positive and that despite less favourable business conditions it could deliver a strong performance similar to the previous year. MOL also said it would continue to consider acquisitions for its upstream business segment.
MOL logged a net loss of 30 billion forint ($135.2 million) in the third quarter due to conversion of its refinery in Italy's Mantova, which resulted in a 123 billion forint impairment charge.
But quarterly EBITDA earnings based on current cost of supplies rose 20 percent to 137.7 billion forints from 114.8 billion forints in the previous quarter, although they still were down 8 percent in annual terms.
EBITDA for the first nine months of the year remains 8 percent below last year's performance due to lower hydrocarbon prices for the year and shrinking production.
MOL Chairman and CEO Zsolt Hernadi said in an earnings statement that the company's new downstream programme delivered improvements in efficiency, and added that for its upstream business a commercial discovery in the Akri-Bijel block in Iraq represented a "milestone".
"Moreover, we accelerate our planned work programme to reach the production phase as early as possible which, together with the barrels from the Shaikan field, will help us to counterbalance the decline of matured fields," he said.
Hernadi said MOL's strong balance sheet position ensured "wide room for potential inorganic steps".
"We are focusing on a more active portfolio management approach, especially in upstream, to create near-term growth potential," he added.
Downstream EBITDA in the first nine months of the year rose 26 percent in annual terms to 134 billion forints despite worsening refining margins in the industry.
"The outstanding result was derived from higher refined product sales and better refinery utilization, improving petrochemicals margins as well as delivered efficiency improvement actions," the company said.
Upstream EBITDA, however, fell 15 percent to 270 billion forints, hurt as natural gas prices fell in its Hungarian and Croatian market, gas production shrank in Central Europe and as it divested its ZMB production field in Russia earlier this year. ($1 = 221.8710 Hungarian forints)
(Reporting by Sandor Peto; Editing by Edwina Gibbs)
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