MOL Group announces 2016 Half-Year Results

MOL Group delivered a clean CCS EBITDA of HUF 305bn (USD 1.1bn) in H1. These strong results indicate that MOL is well on track to meet its annual target of at least USD 2bn, despite oil prices averaging just below USD 40 per barrel in the first half of the year, down 30% year-on-year.

The Downstream business delivered record high results with a Clean CCS EBITDA of HUF 209bn (USD 747mn), 3% above the base period’s performance with petrochemicals and retail contributing 60%. The impressive growth in the results of petrochemicals and retail was able to offset the expected normalisation of refinery margins underpinning the integrated nature of MOL Group’s Downstream value chain. The petrochemicals business reached an all-time high result supported by an increase of the integrated petrochemicals margin and a 5% rise in total sales. Retail EBITDA grew by almost 50% year-on-year driven by a combination of higher sales volumes supported by organic volume growth, the inorganic expansion of the network and a further growth of motor fuel market demand. Stronger contribution from non-fuel sales also supported the results.

In Upstream, average daily hydrocarbon production rose by 8,000 boepd (or 8%) year-on-year to 111,500 boepd. Besides increased contribution from the UK, total CEE onshore production grew by 7% as a result of the successfully continued production optimization program. This was primarily boosted by the rise in oil production which was up by 17% year-on-year. EBITDA, excluding special items, amounted to HUF 91bn (USD 324mn) in H1 2016, a drop of 20% versus the previous year. CAPEX and investments shrank to an even higher extent by 34% and amounted to HUF 74bn (USD 263mn). Thus the Upstream segment demonstrated that it can generate positive cash flows at the bottom of the crude cycle.

Gas Midstream delivered a half-year EBITDA contribution of HUF 27.4bn (USD 97mn), slightly lower than in the previous year.

Chairman-CEO Zsolt Hernádi commented the results: “MOL Group remains fully on track to deliver on its promises in 2016 despite a highly challenging external environment in the oil and gas industry. Given our strong performance to date we are confident to meet our initial USD 2bn+ Clean CCS EBITDA guidance in 2016. Upstream returned to EBITDA growth, made three impressive hydrocarbon discoveries in Pakistan and is progressing in its efforts to increase production whilst optimizing the organization and reducing the cost base. Downstream managed to offset the expected normalization in refinery margins with very strong petrochemicals and retail performance, as these two segments now contribute almost two thirds to Downstream EBITDA. These results highlight the strength and resilience of the integrated business model, the proof of which is that we are continuously generating strong cash flows through the cycle. This is also reflected by the recent credit rating upgrade, which MOL received from S&P, as well as by the new EUR 615m syndicated credit facility, which was signed with further improved conditions.”