MOL Group announces 2015 First Quarter Results

In Q1 2015, MOL Group generated a clean CCS EBITDA of HUF 154bn (USD 561mn) exceeding the results of the first quarter of the previous year by 47% and of the previous quarter by 5%. This increase is a significant achievement considering that the Upstream division was adversely impacted by an almost 30% drop in Brent prices compared with Q4, and that the Downstream division faces a regular seasonality of lower fuel demand in Q1.

The Upstream EBITDA excluding special items reached HUF 61bn (USD 221mn), lower by 7% than in the previous quarter as the performance was negatively affected by shrinking realized hydrocarbon prices due to an additional Brent price decrease. Average daily hydrocarbon production reached 103 thousand barrels of oil equivalent per day, a 4.1% growth compared with Q1 2014.

The Downstream division delivered its strongest ever first quarter result on a clean CCS EBITDA basis and reached HUF 74bn (USD 270mn), which is more than three times as high as in the same period last year. Downstream successfully matched the Q4 2014 figure, even with the regular seasonality of lower fuel demand in the first quarter. The strong performance was supported by further improving refining margins as well as the strong integrated petrochemical margin, but these remarkable achievements were fundamentally the result of the successfully completed New Downstream Program. In order to further increase profitability, the implementation of the Next Downstream Program was swiftly launched targeting an additional USD 500 mn EBITDA improvement by 2017 purely from internal sources.

Midstream EBITDA increased by 20% compared with the same period last year and reached HUF 18bn (USD 65mn) mainly due to higher transmitted volumes.

“I am delighted to see that we have started the year with a strong financial performance. Having achieved such positive results, we are even more confident that our annual USD 2bn clean CCS EBITDA target can be achieved. This highlights the strength of our integrated business model. In Upstream we reached yet another significant milestone by entering Norway, one of the most investor-friendly markets in the world. Through this acquisition, we have further strengthened our presence in the North Sea and doubled our exploration potential. Across the rest of our Upstream portfolio we are simultaneously targeting cost reduction in the CEE region and production growth from international projects. In parallel we continue to optimize our spending in light of the changed environment. Downstream achieved its strongest ever first quarter result, which highlights that we are well positioned to benefit from favourable market conditions. We will deliver on our long-term promise to increase profitability by an additional USD 500mn from internal sources by 2017. In order to achieve this, more than 150 separate initiatives have already been commenced since the beginning of the year.” – said Chairman-CEO Zsolt Hernádi, commenting on the results.