MOL Ebitda Hits Record High Again; Booking of Impairment Postponed
November 05 2015 - 8:06PM
Dow Jones News
By Margit Feher
BUDAPEST---Central European integrated oil and gas company MOL
Nyrt. (MOL.BU), Hungary's largest firm by revenue, said Friday it
was "more than confident" of meeting its 2015 earnings estimate
after reporting its strongest-ever quarterly results for the
July-September period, boosted by robust refining profits.
"With over $1.9 billion already delivered in the first nine
months, we are more than confident of reaching our $2.2 billion
clean earnings before interest, tax, depreciation and amortization
target set for this year," Chairman and Chief Executive Zsolt
Hernadi said.
Despite some likely softening MOL expects for downstream
economic conditions in 2016, "we aim to preserve our strong Ebitda
and free cash flow generation next year," Mr. Hernadi added.
As for a closely watched impairment charge on the
lower-than-expected geological potential of the Akri-Bijeel block
in Iraq, MOL has postponed booking it to the fourth quarter from
earlier plans to do so in the third quarter. The total current book
value of Akri-Bijeel investments on MOL's balance sheet amounts to
$440 million. Analysts had expected the write-down for the third
quarter.
Furthermore, the likely downward revision of its oil-price
assumptions may result in additional asset-impairment charges in
the fourth quarter, MOL said.
In the third quarter, MOL's clean Ebitda, an indicator of
profitability in the oil industry that investors watch the closest,
was 198.7 billion Hungarian forints ($690.7 million), hitting a
record quarterly high for the second quarter in a row, and up 21%
from HUF164.5 billion a year earlier. It beat analysts' forecast by
5.9% in a poll by the company for HUF187.7 billion. Clean earnings
don't include the revaluation of inventories and one-off items.
The company generated a net profit of HUF91.3 billion compared
with analysts' forecast for a net loss of HUF22.7 billion and
HUF28.5 billion a year earlier. Net profit translated into earnings
of HUF973 a share, up from HUF294 a share a year earlier.
Downstream--or refining and marketing--operations posted their
historically strongest quarterly result, also for the second
quarter in a row, on a further strengthening of refining margins,
petrochemical margins persisting at their highest-ever levels and a
rise in sales volumes. Downstream clean Ebitda amounted to HUF147.0
billion, up 80% from HUF81.5 billion a year earlier and exceeding
analysts' forecast for HUF138.3 billion.
The clean Ebitda of the upstream--or exploration and
production--segment was HUF43.3 billion, down from HUF64.2 billion
a year earlier and also below analysts' forecast for HUF45.9
billion. Oil prices retreated to the $50-a-barrel level in the
third quarter, negatively affecting prices, MOL said. Overall
production decreased temporarily, amounting to 101,000 barrels of
oil equivalent a day as contribution from U.K. fields was limited
by maintenance.
Write to Margit Feher at margit.feher@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 05, 2015 19:51 ET (00:51 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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