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MOL: Half year results 2013 affected by difficult market environment in Europe
In Q2 2013, MOL Group generated a clean CCS EBITDA of HUF 112bn, 21% below the previous quarter. The lower result is mainly attributable to weaker Upstream contribution, while Downstream and Gas Midstream delivered flattish results, the company said in a press release to ACTMedia.
In Upstream, the lower price of crude oil and further declining production drove results downwards. In Downstream, the positive effect of seasonally stronger demand and sales was weakened by deteriorating external conditions such as narrower motor fuel crack spreads, a shrinking Brent-Urals spread and some unplanned shutdowns. Relatively stable Gas Midstream performance was the combined result of seasonally weaker gas transmissions (FGSZ) and some losses in the Croatian gas trading business.
Overall, the financial position of MOL Group was further strengthened. The Group generated HUF 238bn in operating cash-flow in Q2 2013, a 47% increase year-on-year, partly as a result of lower working capital needs in a lower crude oil price environment. Net gearing decreased to a 5-year low of 21% in Q2.
Mr Zsolt Hernádi, MOL Chairman-CEO commented: “Our second quarter results were negatively impacted by both external and internal forces, especially in the Upstream segment. Lower crude oil prices and ever-decreasing hydrocarbon production left their mark on the contribution of this, our most profitable business segment. Nevertheless, despite the background of an unfortunate market environment, we were able to strengthen our Upstream business significantly through two developments, both of which will be very important to our future success.
First, we reached a significant milestone in our Kurdistani operations when the regional government approved the Shaikan Block Field Development plan, which brings the first phase of production within closer reach. These barrels will really help us to counterbalance the decline of matured fields.
Second, we strengthened our top management team with a new Executive Vice President - Upstream. To this, probably our most important business area, Mr. Alexander Dodds brings remarkable international industry-specific management experience to MOL Group and I’m sure that he’ll contribute to our long-term success to a great extent.”
As a sign of MOL Group’s commitment towards sustainable development, the company has started to integrate sustainability related content into its quarterly management reports, starting in H1 2013. The non-financial overview section gives a brief summary on key events and achievements in the field of sustainability performance in the given period and gives an update on selected key indicators, too.
About MOL Group
MOL Group is an integrated, independent, international oil and gas company, head-quartered in Budapest, Hungary. It has operations in over 40 countries and employs close to 30,000 people worldwide. The Group operates five refineries and two petrochemicals units under integrated supply chain management, in Hungary, Slovakia, Croatia and Italy. MOL Group also owns a network of over 1,700 filling stations in Central & South Eastern Europe across 11 countries.