MOL Swings to Loss, Even Though Downstream Performs Well
BUDAPEST, Feb 24 (Reuters) – Hungarian oil group MOL Plc swung to a quarterly loss on Tuesday, partly due to one-off costs and a steep fall in crude prices.
It posted a net loss of 68.6 billion forints ($254.6 million) for the fourth quarter compared with a net profit of 5.2 billion forints in the same period of 2013 and a net profit of 28.5 billion forints in the third quarter of 2014.
MOL operates refineries in Hungary, Slovakia and Croatia. It also has exploration and production assets in the North Sea and countries including Pakistan, Iraq, and Russia.
The company's so called clean EBITDA, or core earnings, rose 19 percent in annual terms to 146 billion forints, partly due a strong performance of its downstream business.
MOL said low crude prices and low energy prices supported its refining and petrochemical business, with margins increasing.
MOL will launch a new three-year programme in its downstream business, its downstream Vice President Ferenc Horvath said in a video interview. He said MOL would boost efficiency of its refineries further, increase its market share and develop its petrochemicals segment.
"Within the next three years, with the support of our program, we will achieve $1.3bn -$1.4bn EBITDA by end of 2017 for Downstream," MOL's downstream chief Ferenc Horvath said, adding that clean EBITDA last year was around $870 million.
MOL's downstream business reported a rise in so called clean EBITDA to 72.9 billion forints from 22.8 billion in the fourth quarter of 2013, which MOL said was partly due to strong petrochemical margins and a weakening of the forint.
Due to the steep fall in crude prices it had to book a total of 102 billion forints in replacement and impairment costs on inventories, which weighed on its operating results.
In upstream, MOL's daily production rose to 103,500 barrels from 94,900 in the third quarter, but a fall in crude prices took its toll on upstream performance.
Upstream EBITDA, excluding special items, was 65.6 billion forints compared with 66.2 billion in the third quarter, and was 26 percent lower year on year.
MOL said it planned capex of $1.5-$1.8 billion this year, compared with $1.7 billion in 2014.
"We are looking for gross upstream acquisitions and we are looking for potential asset extensions for the Downstream in the region," said MOL CFO Jozsef Simola in a video interview.
(Reporting by Krisztina Than; Editing by Anand Basu)
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