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MOL Group

Annual Financial Report

2024

 

 

 

 

 

 

 

 

MOL HUNGARIAN OIL AND GAS PLC.

CONSOLIDATED BUSINESS REPORT

31 December 2024

Budapest, 18 March 2025

 

Zsolt HERNÁDI	József SIMOLA
Chairman & Chief Executive Officer,	Group Chief Financial Officer

  

 

 

I.                  MANAGEMENT DISCUSSION AND ANALYSIS OF 2024 BUSINESS OPERATIONS

 

1.        OVERVIEW OF THE MACROECONOMIC AND INDUSTRY ENVIRONMENT

Macroeconomic environment

Global output growth remained steady compared to 2023, despite central banks in advanced countries cautiously easing monetary policy as inflation faded. The 3.2% growth rate was below the historical average of 3.8%^[1]. Geopolitical tensions rose, especially after Hamas' terrorist attacks on Israel in October 2023, leading to an Israeli invasion of Gaza and conflicts with Lebanon, Iran, and Houthi rebels. The Russian-Ukrainian war stalemate, U.S. presidential elections, and political crises in South Korea, France, and Germany added to uncertainty. Most major regions slowed, except for the United States, which grew by 2.8% due to stable consumption and a strong defence industry. China achieved a 5% GDP growth^[2] in line with the government target but one of the slowest rates in decades, driven by low consumption, property market issues, and insufficient policy stimulus.

Growth continued to be subdued in the euro area (0.7% year-on-year; 0.8% in the EU)^[3], driven primarily by a stagnating Germany. Ailing exports, strong import competition, high labour, energy and carbon costs, and other deficiencies in competitiveness – as identified by the Draghi report^[4] – weighed down on manufacturing (especially in energy-intensive industries), and IT and communication services. Major euro area economies struggle with limitations to fiscal stimulus: the collapse of the government and a lack of willingness to abandon the debt break (‘Schuldenbremse’) in Germany; political instability and ballooning debt in France (at 114% of GDP); and the second highest debt-to-GDP ratio behind Greece in Italy (at 136% of GDP).^[5] On the upside, the Spanish economy grew above 3% on the back of record tourism, strong domestic consumption and productivity growth; Greece performed unexpectedly well concerning its recent track record of weakness; and Ireland seemed to finally get out of the recession by the end of the year.

Central and Eastern Europe (CEE) showed decent but unspectacular recovery. While countries like Poland and Croatia experienced solid growth, weak external demand, especially the struggling German economy weighed on the performance of the others. Although real incomes recovered from the inflation shock, consumption remained lacklustre because of household savings rates staying well above pre-pandemic levels, a still bleak economic outlook, and geopolitical uncertainties. Wage growth and services inflation remained persistent in most countries, halting the monetary easing process that started in the first half of the year.

Hungary underperformed within the CEE region because the positive effects of net exports in 2023 faded by mid-2024, while domestic demand recovery was sluggish as well. Real GDP has fallen in Q2 and Q3 with average yearly growth coming in at 0.6%. Industry, agriculture and construction all contracted, with a slight positive growth in services. Still, monetary conditions were eased only gradually because of stubbornly sticky core inflation and the depreciation of the forint. Fiscal policy missed its 4.5% deficit target despite keeping a tight control of the expenditure side.

Oil and natural gas market developments

Benchmark Dated Brent crude prices averaged 80.8 USD/bbl in 2024^[6], 2.2% lower than in 2023 with monthly crude prices staying within the 70-90 USD/bbl range. The spot price of Brent reached a 2024 peak of 93 USD/bbl on April 12, 2024, amid concerns that the tensions between Iran and Israel could escalate into a wider conflict and disrupt global oil supplies. Sluggish demand and robust non-OPEC+ supply kept crude prices in the relatively narrow trading range despite geopolitical tensions in the Middle East and shipping disruptions in the Red Sea. Several extensions of OPEC+ production cuts also helped keep prices from falling below this range. On the demand side, weakening economic growth and lower-than-expected fuel demand in China because of substitution toward liquefied natural gas for trucking goods and expanding electric vehicle ownership contributed to the downward pressure on the price. At the same time, production growth from non-OPEC+ members continued to increase, offsetting OPEC+ production cuts. U.S. production of crude oil reached a monthly record in October 2024 of 13.4 Mmbpd^[7], and production in Guyana and Canada also increased on an annual basis in 2024. Although the disruptions to shipping in the Red Sea continued through 2024, oil exporters were able to find alternative routes, and supplies were mostly unaffected. Also, the conflict between Iran and Israel has not, of yet, created supply disruptions.

 

Figure 1 Selected crude, natural gas and coal prices dtd (USD/MWh, 2022-2024, Bloomberg data)

 

 

European natural gas prices continued the correction from the 2022 record high levels in 2024. The average price of TTF (Title Transfer Facility), Europe’s largest gas trading hub, dropped from an average of 41.3 EUR/MWh in 2023 to 34.6 EUR/MWh in 2024 (-16%).⁶ However, the downward trend turned around with the start of winter. While in the first half of the year prices were supported mainly by the recovery in Asian demand, the year-end price rally was more of a European story. A colder winter start in the continent and softer wind conditions creating higher-than-usual gas demand in the European power sector led to a faster depletion of storage inventories than last year despite the still underperforming European industrial sector. Markets monitor storage depletion closely because current European storage mandates effectively mean that the greater the inventory depletion this winter, the more injection demand will be required to meet mandate volumes next Summer. In November, the threat of further 15 bcm Russian supply cut via Ukraine by 1 January 2025 – affecting primarily Austria, Czechia, Slovakia and to a lesser extent Hungary – quickly drove TTF prices close to 50 EUR/MWh again as alternative pipeline supply has already been largely maximised, leaving most of the balancing on Western European re-exports and storage withdrawals.

Downstream

Refinery margins in all major regions halved in 2024 and returned to their pre-pandemic ‘normal’ range. Besides rising costs, the narrowing of crack spreads was the main driver behind the decline due to the combination of weak demand for petroleum products and an increase in the global refining capacity. Economic slowdown in China and Europe in particular hurt consumption. The ongoing adoption of alternative powertrains and fuels has also limited demand growth for conventional fuels. On the supply side, U.S. refineries were running at record-high operating rates, and huge new facilities were ramping up in Kuwait, Saudi Arabia, Oman, Mexico, and Nigeria.

European petrochemicals continued to face stagnating demand, stalled investments, shrinking production, high energy costs and an increasingly ambitious environmental regulation in 2024. Coupled with limited global demand growth and high capital spending in other regions, the global chemical market has become increasingly competitive. Global excess capacity for ethylene and propylene, particularly in China, continued to depress polymer spreads as the structurally higher costs of energy and decarbonization in Europe met low-cost import competition. EU27 capacity utilisation remained well below historical averages despite Europe maintaining a positive trade balance in chemicals. In fact, exports are not growing at the same pace as the global market, and there is an ongoing shift of manufacturing to regions in Asia, with China outpacing all others. To avoid further deindustrialization, the European Commission decided to support the region’s industry in reducing carbon emissions and transitioning to more sustainable products, but actual policies have yet to materialize.

 

 

Macro figures (average)	FY 2024	FY 2023	Ch %
Brent dated (USD/bbl)	80.8	82.6	(2)
Urals-Brent spread (USD/bbl, DAP India Urals quotation)(5)	(3.6)	(10.0)	(63)
TTF gas price (EUR/MWh)	34.6	41.3	(16)
Premium unleaded gasoline 10 ppm (USD/t)(11)	789.0	856.4	(8)
Gas oil – ULSD 10 ppm (USD/t)(11)	748.4	828.9	(10)
Naphtha (USD/t)(12)	622.3	602.9	3
Fuel oil 3.5 (USD/t)(12)	444.1	427.4	4
Crack spread – premium unleaded (USD/t)(11)	178.1	231.2	(23)
Crack spread – gas oil (USD/t)(11)	137.5	203.7	(32)
Crack spread – naphtha (USD/t)(11)	11.3	(22.3)	n.a.
Crack spread – fuel oil 3.5 (USD/t)(11)	(166.8)	(197.7)	(16)
Crack spread – premium unleaded (USD/bbl)(11)	14.0	20.2	(31)
Crack spread – gas oil (USD/bbl)(11)	19.7	28.6	(31)
Crack spread – naphtha (USD/bbl)(12)	(10.8)	(14.9)	(28)
Crack spread – fuel oil 3.5 (USD/bbl)(12)	(10.6)	(15.1)	(30)
Brent-based MOL Group refinery margin (USD/bbl)(10)	6.1	9.0	(32)
Brent-based Complex refinery margin (MOL + Slovnaft) (USD/bbl)(10)	6.4	9.3	(31)
Ethylene (EUR/t)	1,216.7	1,205.8	1
Butadiene-naphtha spread (EUR/t)	383.8	291.8	32
MOL Group variable petrochemicals margin (EUR/t)(9)	206	144	44
HUF/USD average	365.2	353.3	3
HUF/EUR average	395.2	382.0	3
O/N USD SOFR (%)	5.1	5.0	2
3m EURIBOR (%)	3.6	3.4	6
3m BUBOR (%)	7.3	14.3	(49)
Macro figures (closing)	FY 2024	FY 2023	Ch %
Brent dated closing (USD/bbl)	74.6	77.6	(4)
HUF/USD closing	393.6	346.4	14
HUF/EUR closing	410.1	382.8	7
MOL share price closing (HUF)	2,730	2,826	(3)

 

Notes and special items are listed in Appendix I and II.

Historical macro figures are available in the annual Data Library on the company’s website.

 

2.        INTEGRATED CORPORATE RISK MANAGEMENT

As an operator in a high-risk industry MOL Group is committed to manage and maintain its risks within acceptable limits.

The aim of MOL Group Risk Management is to keep the risks of the business within acceptable levels and safeguard the resilience of its operations as well as the sustainable management of the company. For this purpose, as an integral part of our corporate governance structure, MOL Group has developed a comprehensive Enterprise Risk Management (ERM) system which focuses on the organisation’s value creation process, meaning factors critical to the success and threats related to the achievement of objectives but also occurrence of risk events causing potential impact to people, assets, environment or reputation. Within the ERM framework all significant risks throughout the whole Group are identified, assessed, evaluated, treated and monitored, covering all business and functional units, geographies as well as projects, taking into consideration multiple time horizons.

Regular risk reporting to top management bodies, including the Board of Directors with its committees provides oversight on overall the risk profile and the largest risks as well as assurance that updated responses, controls, and appropriate mitigation actions are set and followed. 

The Group faces financial, operational and strategic risks, including but not limited to the below.

Risks/processes	Risk description	Risk mitigation methods
Market and financial risks
Commodity price risk	The Group is exposed to commodity price risk on both the purchasing side and the sales side. The main commodity risks stem from its long positions in crude oil, refinery margin and petrochemical margin.	·   Integrated business model ·   Continuous monitoring ·   When necessary, commodity hedging instruments to mitigate other than ‘business as usual’ risks or general market price volatility
Foreign exchange (FX) risk	The Group has FX exposure due to mismatch of currency composition of cash inflows and outflows, investments, debts.	·   Monitoring FX risk and balancing the FX exposures of the operating & investment cash flow with the financing cash flow exposures when necessary and optimal
Interest rate (IR) risk	MOL Group has a mixture of floating and fixed interest rate debts. Floating rate debt are subject to interest rate changes.	·   Continuous monitoring ·   Adequate mix of funding portfolio ·   When necessary, interest rate swap hedging instruments to mitigate risks
Credit risk	MOL Group provides products and services with deferred payment terms to eligible customers which exposes it to credit risk.	·   Diversified customer portfolio ·   Customer evaluation model, continuous monitoring ·   Group-wide credit insurance program
Financing/Refinancing risk	MOL Group has significant debt outstanding. Inability to refinance those or inability to draw down funds could cause liquidity problems.	·   Diversified funding sources/instruments ·   Diversified, balanced, and decently long maturity profile ·   Investment grade rating (BBB-) supports smooth capital markets access

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risks/processes	Risk description	Risk mitigation methods
Operational Risks
Physical asset and process safety and equipment breakdown risk	Process Safety Event (Major Industrial accident) due to loss of mechanical integrity, technical, technological or operational issues, process maintenance difficulties, lack of competent human resources.	·   Comprehensive HSE activities, a group-wide Process Safety Management system including asset related operational risk management process ·   Lifetime Extension program continued in petchem and rolled out to refineries ·   Preventive & Predictive maintenance (Uptime program) with thorough equipment criticality assessment behind ·   Group-wide insurance management program
Crude oil and gas supply risk	Crude supply disruption (insufficient quantity or quality) can disrupt refineries and petchem sites continuous operation.	·     Crude oil-supply diversification strategy implemented; ·     Emergency reserves available
Critical material, equipment or service supply risk	Disruption in critical (raw) materials and/or equipment and/or services may cause delays in operation and/or increase costs	·     Stock management ·     Supplier management ·     Sourcing and supply chain diversification
Exploration & Production reserve replacement	Higher than expected decline and failure to replace reserves.	·     Production optimization programs and organic reserve replacement activities are both focus areas of Exploration & Production operations
Cyber risk	Global trends showing steadily growing frequency and intensity of Cyber-attacks / incidents. AI is a new global threat which is widely used by attackers as well as more specified Cyber Crime Groups targeting Industrial Control System’s weaknesses, which may have increasing economic impact and relevance on MOL Group. Ukraine War significantly reduce Russian and Ukraine hacker group activities as they focus on war, significant investment on attacking methods by all stakeholders, furthermore these grown capabilities could lead to huge impact on the future.	·     Continuous improvement of cyber security capabilities ·     Continuous supervision of cyber security risks (Group and opco level) ensuring the protection of the confidentiality, integrity and availability of data ·     Cyber security is built into all the MOL Group products and services ·     Continuous education of employees and partners.
Fraud Risk	Fraudulent activities (external & internal fraud) may cause significant financial and reputational losses	·     Control functions on local and group level ·     Anti-Fraud Awareness (Newsletter, Mandatory trainings) ·     Anti-Fraud & Investigation procedures, dedicated Team
Pandemic Risk	Pandemics may significantly adversely affect the Group’s business environment, including price and demand on the Group’s products and services, availability of contractors, subcontractors as well as raw materials, creditworthiness of credit customers, availability of the Group’s key personnel.	·   Crisis Management plans in place ·   Our Group Pandemic Preparedness Framework methodology instruction was issued in January 2023, reapproved in January, 2025, summarizing not only the WHO general approach but entire MOL Group internal experiences of last 3-4 years, ensuring a life-proof and working framework to manage any possible further endemic/ pandemic situations. ·   Continued and sustainable practices defined, adjusted to country local measures and company internal circumstances

 

 

 

 

 

Strategic risks
Regulatory and sanctions risk	MOL has significant exposure to a wide range of laws, regulations and policies on the global, the European and the individual country level, that may change significantly over time and may even require the Group to adjust its core business operation.	·   Continuous monitoring of new regulations and sanctions ·   Strengthened compliance process ·   Participation in legislative processes, consultations ·   Adopting MOL strategy in response to changes
Country risk	The international presence of MOL Group contributes to diversification but also exposure to country specific risk at the same time. Government actions may be affected by the elevated risk of economic and, in some regions, (geo)political crisis, increasing their impact on MOL’s operations.	·   Continuous monitoring of the (geo)political risk, compliance with local regulations and international sanctions ·   Investment opportunities are valuated with quantifying of country risk in discount rate
Reputation risk	MOL, as a major market player and employer in the region with a sizeable operational footprint, operates under special attention from a considerable number of external stakeholders.	·   Stakeholder governance processes introduced to monitor and adjust to any reputational risks
Climate change risk	Transition and physical risks associated with climate change have the potential to negatively impact MOL’s current and future revenue streams, expenditures, assets and financing.	·   MOL Group’s transformational strategy ·   Several operational steps taken to mitigate physical risks emanating from climate change (more information in the Sustainability Report)
Capex Project Execution Risk	Projects are delayed or less profitable than expected or unsuccessful for numerous reasons, including cost overruns, higher raw material or energy prices, longer lead time in equipment deliveries, limited availability of contractors and execution difficulties.	·     Disciplined stage gate process across Capex project pipeline ·     Dedicated team to identify risks at earlier stages, plan for mitigation or avoidance by linking potential risks with schedule and budget to build realistic estimates and following it up through the project lifecycle ·     Supplier selection criteria, audits
Human Capital Risk	The Group's ability to implement its Shape Tomorrow Strategy is dependent on the capabilities and performance of its people, management, experts and technical personnel. Unavailability of skilled workforce may lead to disruptions in the operation.	·     HR framework to attract, develop and engage employees ·     Capability development for all employee levels to ensure future-proof skillset ·     Intergenerational collaboration to enhance internal knowledge transfer ·     Focus on digital transformation, and employee experience ·     Developing diverse & collaborative culture ·     Working environment and conditions framework in order to attract and retain diverse talents

 

ESG risks are covered and considered as part of the following topics (including but not limited to): Climate Change, Human Capital, Physical asset and process safety and equipment breakdown risk, Cyber Risk, Fraud Risk, Pandemic Risk, Regulatory and sanctions risk.

Risk Review Process in 2024

Risk owners in the Group identified, analysed and evaluated their major risks during 2024 – both on medium-term and long-term time horizon – and defined and/or updated the relevant mitigation plans. Risk reports have been discussed by the Finance and Risk Management Committee of the Board of Directors and the Audit Committee.

The Group has faced challenges due to continued geopolitical tension, thus considers related risks, such as sanctions, regulatory as well as supply-related risks elevated and implements mitigation measures. Furthermore, Cyber Risk has been in the Group’s focus due to external trends (geopolitical developments and AI).

Supply-related risks: The Group has elaborated the crude diversification strategy; alternative crude slate was defined, relevant capex projects defined and started. Supply chain difficulties have been addressed, mitigated by stock, supply chain and supplier management actions. In order to ensure continuous supply of crude oil via Druzhba pipeline MOL Group has concluded agreements with crude oil suppliers and pipeline operators.

Regulatory and sanctions risks: MOL Group has been continuously and closely monitoring the sanctions, countersanctions and strengthened the compliance processes. In several countries where the Group operates, various forms of government interventions in energy markets took place (margin caps, new taxes, government takes) in recent years, which had material financial impact on the Group. In addition, national implementation of EU initiatives (in particular Fit for 55 related targets) poses significant compliance risks.

Main risk management tools

As described above, as a general risk management framework, we operate an Enterprise Risk Management system.

Hedging Policy:  To ensure the profitability and the financial stability of the Group, financial risk management is in place to handle short-term, market related risks. Commodity price risk exposure is assessed regularly and are managed – if and when necessary – with hedging measures. Liquidity risk related to derivative instruments are measured regularly by using a complex model based on advanced statistical methods.

Insurance Policy: transferring the financial consequences of our operational risks is done by insurance management, which represents an important risk mitigation tool to cover the most relevant exposures and liabilities arising out of our operations. Insurance is managed through a joint program for the whole Group to exploit considerable synergy effects.

Crisis and Business Continuity Management: following best industry practice and focusing on low probability high potential risks that could disrupt our operations, value chain and cash generation, MOL Group has implemented and is currently working to integrate a crisis management and business continuity program in order to reduce recovery times within tolerable limits for processes critical to our business.

For TCFD disclosure, please refer to the Sustainability Report.

 

 

 

3.        FINANCIAL AND OPERATIONAL OVERVIEW OF 2024

		HUF billion			USD million
	Summary of results	FY 2024	FY 2023	Ch %		FY 2024	FY 2023	Ch %
	Net sales	9,178.7	8,908.5	3		25,127	25,217	0
	EBITDA	1,091.3	1,149.3	(5)		2,992	3,235	(8)
	EBITDA excl. special items(1)	1,091.3	1,123.7	(3)		2,992	3,162	(5)
	Clean CCS-based EBITDA (1) (2)	1,121.7	1,098.4	2		3,073	3,093	(1)
	Profit from operation	584.9	677.6	(14)		1,615	1,898	(15)
	Profit from operation excl. special items(1)	603.8	722.8	(16)		1,663	2,026	(18)
	Clean CCS-based operating profit (1) (2)	634.2	697.5	(9)		1,744	1,957	(11)
	Net financial gain / (expenses)	(66.9)	12.5	n.a.		(181)	36	n.a.
	Net profit attributable to equity holders of the parent	368.2	530.4	(31)		1,023	1,484	(31)
	Operating cash flow before change in working capital	914.6	667.3	37		2,488	1,842	35
	Operating cash flow	820.5	754.0	9		2,218	2,138	4
	EARNINGS PER SHARE
	Basic EPS, HUF	496.2	715.4	(31)		1.38	2.00	(31)
	INDEBTEDNESS
	Simplified Net debt/EBITDA	0.74	0.59	n.a.
	Net gearing(4)	14.9%	14.0%	n.a.

 

KEY FINANCIAL DATA BY BUSINESS SEGMENTS
	HUF billion					USD million
Net Sales Revenues (3) (6)	FY 2024	FY 2023		Ch %			FY 2024		FY 2023	Ch %
Upstream	685.4	723.9		(5)			1,871		2,043	(8)
Downstream	7,155.1	7,210.7		(1)			19,578		20,410	(4)
Gas Midstream	127.3	141.5		(10)			348		400	(13)
Consumer Services (13)	3,741.2	3,634.8		3			10,240		10,295	(1)
Circular Economy Services	428.6	192.1		123			1,182		543	118
Corporate and other	436.4	316.8		38			1,187		898	32
Total Net Sales Revenues	12,573.9	12,219.8		3			34,406		34,589	(1)
Intersegment transfers(7)	(3,395.2)	(3,311.3)		3			(9,279)		(9,372)	(1)
Total external net sales revenues from cont.op.	9,178.7	8,908.5		3			25,127		25,217	0
Total external net sales revenues from discont.op.	0.0	0.0		n.a.			0		0	n.a.
Total External Net Sales Revenues (6)	9,178.7	8,908.5		3			25,127		25,217	0
EBITDA	FY 2024	FY 2023		Ch %			FY 2024		FY 2023	Ch %
Upstream	402.1	365.5		10			1,099		1,026	7
Downstream	427.4	490.2		(13)			1,171		1,375	(15)
Gas Midstream	89.0	93.8		(5)			244		265	(8)
Consumer Services (13)	271.0	244.8		11			743		695	7
Circular Economy Services	(20.3)	13.2		n.a.			(52)		37	n.a.
Corporate and other	(68.0)	(73.2)		(7)			(185)		(209)	(11)
Intersegment transfers(7)	(9.9)	15.0		n.a.			(29)		46	n.a.
Total EBITDA from cont.op.	1,091.3	1,149.3		(5)			2,992		3,235	(8)
Total EBITDA from discont.op.	(40.7)	(2.5)		n.a.			(111)		(8)	n.a.
Total EBITDA	1,050.6	1,146.8		(8)			2,881		3,227	(11)

	HUF billion			USD million
Depreciation	FY 2024	FY 2023	Ch %		FY 2024	FY 2023	Ch %
Upstream	170.3	126.8	34		462	358	29
Downstream	180.3	161.1	12		491	457	7
Gas Midstream	16.6	17.4	(4)		46	49	(8)
Consumer Services (13)	77.3	122.8	(37)		210	349	(40)
Circular Economy Services	13.1	1.5	776		36	4	755
Corporate and other	50.2	43.0	17		137	122	13
Intersegment transfers(7)	(1.4)	(1.0)	46		(5)	(2)	182
Total Depreciation from cont.op.	506.4	471.7	7		1,377	1,337	3
Total Depreciation from discont.op.	0.0	0.0	n.a.		0	0	n.a.
Total Depreciation	506.4	471.7	7		1,377	1,337	3
Operating Profit	FY 2024	FY 2023	Ch %		FY 2024	FY 2023	Ch %
Upstream	231.8	238.7	(3)		638	667	(4)
Downstream	247.0	329.1	(25)		681	919	(26)
Gas Midstream	72.4	76.4	(5)		199	216	(8)
Consumer Services (13)	193.8	122.0	59		532	346	54
Circular Economy Services	(33.4)	11.7	n.a.		(88)	33	n.a.
Corporate and other	(118.3)	(116.2)	2		(323)	(331)	(3)
Intersegment transfers(7)	(8.5)	15.9	n.a.		(24)	49	n.a.
Total operating profit cont.op.	584.9	677.6	(14)		1,615	1,898	(15)
Total operating profit discont.op.	(40.7)	(2.5)	n.a.		(111)	(8)	n.a.
Total Operating Profit	544.2	675.1	(19)		1,504	1,891	(20)
EBITDA Excluding Special Items (1)	FY 2024	FY 2023	Ch %		FY 2024	FY 2023	Ch %
Upstream	402.1	339.9	18		1,099	953	15
Downstream	427.4	490.2	(13)		1,171	1,375	(15)
Downstream - clean CCS-based(2)	463.4	472.4	(2)		1,267	1,328	(5)
Gas Midstream	89.0	93.8	(5)		244	265	(8)
Consumer Services	271.0	244.8	11		743	695	7
Circular Economy Services	(20.3)	13.2	n.a.		(52)	37	n.a.
Corporate and other	(68.0)	(73.2)	(7)		(185)	(209)	(11)
Intersegment transfers(9)	(9.9)	15.0	n.a.		(29)	46	n.a.
Total Clean CCS-based EBITDA (2)	1,121.7	1,098.4	2		3,073	3,093	(1)
Total EBITDA excluding special items cont.op.	1,091.3	1,123.7	(3)		2,992	3,162	(5)
TOTAL EBITDA excluding special items discont.op.	(40.7)	(2.5)	n.a.		(111)	(8)	n.a.
Total EBITDA excluding special Items	1,050.6	1,121.2	(6)		2,881	3,154	(9)

	HUF billion					USD million
Operating Profit Excluding Special Items(1)	FY 2024	FY 2023		Ch %			FY 2024		FY 2023	Ch %
Upstream	250.8	216.8		16			686		605	13
Downstream	247.0	329.1		(25)			681		919	(26)
Gas Midstream	72.4	76.4		(5)			199		216	(8)
Consumer Services (13)	193.8	183.3		6			532		521	2
Circular Economy Services	(33.4)	11.7		n.a.			(88)		33	n.a.
Corporate and other	(118.3)	(110.4)		7			(323)		(315)	3
Intersegment transfers(7)	(8.5)	15.9		n.a.			(24)		48	n.a.
Total operating profit excluding special items cont.op.	603.8	722.8		(16)			1,663		2,026	(18)
Total operating profit excluding special items discont.op.	(40.7)	(2.5)		n.a.			(111)		(8)	n.a.
Total Operating Profit Excluding Special Items	563.1	720.3		(22)			1,552		2,018	(23)
Capital Expenditures	FY 2024	FY 2023		Ch %			FY 2024		FY 2023	Ch %
Upstream	115.8	129.6		(11)			316		367	(14)
Downstream	316.0	223.0		42			860		634	36
Gas Midstream	17.8	12.4		44			47		35	34
Consumer Services (13)	62.8	181.3		(65)			169		525	(68)
Circular Economy Services	34.1	22.1		54			93		63	48
Corporate and other	85.9	53.4		61			227		152	50
Intersegment transfers(7)	(2.4)	(3.0)		(20)			(7)		(9)	(22)
Total Capital Expenditures	630.0	618.7		2			1,705		1,767	(3)

Notes and special items are listed in Appendix I and II.

 

3.1 KEY ACHIEVEMENTS AND SUMMARY OF 2024 RESULTS 

In 2024, MOL reached Clean CCS EBITDA of HUF 1,121.7 bn (USD 3,073 mn), 2% higher in HUF terms than in the previous year and exceeding the capital market guidance of around USD 3 bn. Operating cash flow was burdened by income tax payments amounting to HUF 195.6bn (USD 540mn) and by working capital build of HUF 94.1 bn (USD 270mn); accordingly, operating cash flow generation after working capital arrived at HUF 820.5bn (USD 2,218mn) in 2024.  

 

Key Financial Highlights

•         Upstream segment’s EBITDA, excluding special items, reached HUF 402.1 bn (USD 1,099 mn) in 2024, representing a 18% increase compared to 2023 in HUF terms as production volumes increased and the Hungarian mining royalty payments decreased as minimum production levels were met. 

•          In 2024, Downstream achieved a Clean CCS EBITDA of HUF 463.4 bn (USD 1,267 mn), which is 2% lower than the previous year’s performance. The macro environment had a negative impact on Refining and Marketing (R&M) results with the significantly weakened refining margin in 2024, partly offset by a higher sales results. Due to the continuing downward trend in the industry, the Petchem segment contributed negatively to Clean CCS EBITDA.

•         Consumer Services EBITDA increased by 11% in 2024, reaching HUF 271.0 bn (USD 743 mn) as a combination of organic growth driven by non-fuel sales and the Slovenia acquisition which was closed in mid-2023.

•         Gas Midstream reached HUF 89.0 bn (USD 244 mn) EBITDA in 2024, representing a decrease of 5% compared to 2023, driven by rising transmission demand and changes in regulated tariffs. 

•         Circular Economy Services was reported as a separate segment starting in 2024 and reported a negative EBITDA of HUF 20.3 bn (USD -52 mn) for the full year due to the startup phase of the companies within the segment and the ramp-up in the Deposit Refund System (DRS) leading to extra expenses. 

•         Total CAPEX spending reached HUF 630.0 bn (USD 1,705mn), indicating an increase of 2% year-on-year, despite mainly less acquisitions completed in 2024 than in 2023. Looking at organic CAPEX, the 2024 figure came in 21% higher than in 2023 at HUF 603.5 bn (USD 1,636 mn), mainly due to the heavy turnarounds leading to higher sustain-type CAPEX during the year.

•         Indebtedness on a Net Debt/EBITDA basis rose slightly to 0.74x by end-2024 from 0.59x a year earlier but remained comfortably below the management guidance threshold of 1.0x.

 

Key Operational Highlights

•         Annual oil and gas production reached 93.8 mboepd in 2024, well overachieving the annual guidance of ~90 mboepd, (modified to 92-94 mboepd in November 2024). Production increased significantly in Hungary and first gas was announced in December 2023 in Kazakhstan, adding to the Group’s production significantly in 2024.

•         The Consumer Services network decreased to 2,330 stations by the end of 2024, down 4% yer-on-year. The expansion of the non-fuel concept also continued, with 36.8% of the total margin generated by non-fuel in 2024, up by 2.5 percentage points.

•         In Downstream, organic investments increased significantly as many lifetime extension projects were completed during the year and the polyol complex was also inaugurated in the spring of 2024.

•         MOL proceeds with green transition:

o    66 MWp photovoltaic plant acquired in Central Hungary to contribute to an increasing share of renewables in MOL’s energy mix

o    Production in 10 MW electrolyser unit started in September in Százhalombatta with 1,600 tpa green hydrogen expected to be used in Danube Refinery

o    Design phase started for 40 ktpa chemical recycling unit in Hungary.

•         Key group financial and operational figures and historical financial statements are available in the annual Data Library on the company’s website.

3.2.   CORPORATE STRATEGY

MOL Group was one of the first players in the industry to come to terms with the changing environment and communicate its plan on the best path forward to the public. The 2030 strategy published in 2016 focused on a balanced transition towards meeting the demands of a low-carbon economy while at the same time addressed how the tradition fossil-based economy can adapt and what role MOL Group can play in this change. This direction was reaffirmed already twice, first in 2021 and latest in March 2024 in the “Shape Tomorrow” strategy. 

Shape Tomorrow strategy

Drawing lessons from the COVID-19 pandemic and geopolitical crises since, the company has outlined a clearer transition pathway through 2030, with the ultimate ambition of achieving net climate neutrality by 2050. This transition is underpinned by the relatively strong expansion of Central and Eastern European (CEE) economies and MOL’s ambition to sustain or expand its presence in its core wholesale and retail markets, allowing enough financial and time horizon to commence with its ambitious transition programme.

On the transition front, MOL’s updated strategy sets ambitious goals, aiming for a 25% absolute reduction in Scope 1 & 2 emissions by 2030 compared to 2019. On Scope 3 emissions, MOL recognises that most of the evolution is based on regional fossil fuel demand trends and is thereby less under the company’s control than emissions under the first two Scopes. Still, a Scope 3 target of 5% absolute reduction by 2030 has been set out.

MOL also recognises that the path of transition will be capital-intensive and not only does MOL have to go beyond the oil&gas standard areas of expertise, the financial allocation will also have to be re-established. Therefore, between 2025-2030, ca. 30-40% of MOL’s CAPEX budget will be allocated to low-carbon initiatives. However, it is important to note that MOL remains conservative with regards to hurdle rates and generally with its CAPEX budget and expects that organic investments will amount to USD 1.9 bn on average in 2025-2030 in real terms, a notch higher than the USD 1.8 bn average in 2018-2023. This allows MOL to maintain a healthy balance sheet and allocate sufficient funds for possible inorganic investments and competitive shareholder remuneration.

Segments contribution to the strategy

With the most transition-related challenges lying within MOL’s Downstream segment, the most complex and far-reaching projects have been underway for over a decade. Beyond the shift towards petchem, new focus areas include circularity, biofuels, green hydrogen, and biogas. Moreover, electrification and a shift towards renewable energy solutions is also an important pillar of the strategy. While continuing to engage in such deep transformation, however, MOL by default will keep being committed to diversifying its crude mix and to strengthen energy security. 

MOL set up its Circular Economy Services framework in 2023 when started operating the waste management concession in Hungary. A major step was the introduction of the Deposit Refund System, which successfully ramped up along 2024 and now manages over 6 million plastic or glass packaging returned per day. By 2030, MOL’s waste management division aims to supply 1.5 million tons of waste-based feedstock to Hungarian industries, including its own Downstream operations.

MOL’s Consumer Services segment continues its evolution into a digitally-driven retailer and integrated mobility provider. The focus is on developing multi-purpose service stations, enhancing customer-centric operations, and becoming a regional leader in mobility solutions. Having nearly achieved its USD 700 million EBITDA target for 2025 as early as 2023, the segment has set a new ambition: reaching USD 1 billion in EBITDA by 2030.

The Upstream segment remains a crucial cash generator for MOL Group, with expected average daily production exceeding 90,000 barrels of oil equivalent (boe) and direct production costs of USD 6-8/boe between 2025 and 2030. In the CEE region, efforts will focus on optimizing production, enhancing infrastructure, and improving hydrocarbon recovery to maintain output and support regional energy security. At the same time, MOL is prioritizing low-carbon technologies, including geothermal energy, lithium extraction, methane emission reduction, and carbon capture, utilization, and storage (CCUS). In its international portfolio, MOL will continue active portfolio management, with decisions driven by return metrics and time-to-market considerations. Through these strategic initiatives, MOL Group is reinforcing its position as a leader in the energy transition while ensuring financial resilience and long-term growth.

3.2.1 scenario analysis

The “Shape Tomorrow” strategy update, published in March 2024, is based on a detailed analysis of the external environment, exploring the main trends and directions of general macroeconomic conditions, the oil and gas industry, and ancillary markets that have – or potentially have – a large impact on MOL’s operation. Based on the analyses of these markets, MOL prepares numeric forecasts of the key macroeconomic and industry-specific parameters. The forecasts are prepared for three scenarios: Slow Transition, Steady Transition & Net Zero Emission. The green energy transition is happening in all three scenarios, the biggest difference between them is the pace of the transition. The Shape Tomorrow Strategy is predominantly based on the Steady Transition scenario. If one of the other two scenarios would materialise, it would mostly affect the timing of the investments envisaged in the Shape Tomorrow Strategy and not the strategic directions themselves.

MOL operates a “Premises Committee” made up from representatives of the main business divisions and functional areas. The committee is tasked with monitoring the main indicators and assumptions used in the different scenarios and carrying out updates following changes to the external environment. This system can provide early notice that the external environment is moving to a different stage along the chosen scenario path, or potentially moving towards a different scenario altogether, providing senior management the opportunity to reassess and adjust its plans accordingly. Changes to the premises – partially or fully - automatically triggers a notification to the Executive Management and the Board of Directors, and as a result it may cause a modification of the strategy. Any changes to the strategy would need approval from the Board of Directors.

3.3     UPSTREAM

 

Segment IFRS results (HUF bn)	FY 2024	FY 2023	Ch %
EBITDA	402.1	365.5	10
EBITDA excl. spec. items(1)	402.1	339.9	18
Operating profit/(loss)	231.8	238.7	(3)
Operating profit/(loss) excl. spec. items(1)	250.8	216.8	16
CAPEX and investments (organic)	113.2	129.2	(12)
o/w exploration CAPEX	17.0	11.5	48
Hydrocarbon Production (mboepd)	FY 2024	FY 2023	Ch %
Crude oil production	39.8	38.1	4
Hungary	11.5	10.0	15
Croatia	9.3	9.7	(4)
Kurdistan Region of Iraq	4.0	2.2	82
Pakistan	0.5	0.5	0
Azerbaijan	12.7	13.9	(9)
Other International	1.7	1.9	(11)
Natural gas production	37.0	37.7	(2)
Hungary	21.6	21.3	1
Croatia	11.3	11.9	(5)
o/w. Croatia offshore	2.8	3.4	(18)
Pakistan	3.9	4.5	(13)
Other International	0.2	0.1	100
Condensate(5)	4.2	4.5	(7)
Hungary	2.7	2.7	0
Croatia	0.7	0.8	(13)
Pakistan	0.8	1.0	(20)
Average hydrocarbon production of fully consolidated companies	81.0	80.4	1
Russia (Baitex)	3.5	3.8	(8)
Kazakhstan	2.7	0.0	n.a.
Hungary	0.4	0.0	n.a.
Kurdistan Region of Iraq (Pearl Petroleum)	6.3	6.2	2
Average hydrocarbon production of joint ventures and associated companies	12.9	10.0	29
Group level average hydrocarbon production	93.8	90.4	4
Main external macro factors	FY 2024	FY 2023	Ch %
Brent dated (USD/bbl)	80.8	82.6	(2)
TTF 1 month ahead (USD/MWh)	63.7	75.6	(16)
Average realised hydrocarbon price	FY 2024	FY 2023	Ch %
Crude oil and condensate price (USD/bbl)	71.6	76.8	(7)
Average realised gas price (USD/boe)	51.4	61.2	(16)
Total hydrocarbon price (USD/boe)	63.2	70.1	(10)
Production cost (USD/boe)	FY 2024	FY 2023	Ch %
Average unit OPEX of fully consolidated companies	6.7	6.6	2
Average unit OPEX of joint ventures and associated companies	3.5	2.3	52
Group level average unit OPEX	6.2	6.0	3

 

Capital  Expenditures
FY 2024	Hungary	Croatia		Kurdistan Region of Iraq	Pakistan	Azerbaijan	Other	Total - FY 2024	Total - FY 2023
HUF bn
Exploration	9.2	5.2		0.0	0.7	1.9	0.0	17.0	11.5
Development	14.2	14.2		0.0	1.4	42.0	3.9	75.6	94.8
Other	6.3	11.1		1.6	0.3	1.4	0.0	20.6	22.9
Acquisitions	0.0	2.5		0.0	0.0	0.0	0.0	2.5	0.4
Total - FY 2024	29.6	33.0		1.5	2.3	45.3	3.9	115.8
Total - FY 2023	34.5	32.9		6.4	(0.5)	50.6	5.7		129.6

 

Notes and special items are listed in Appendix I and II.

Tables regarding Hydrocarbon production (mboepd); Production cost (USD/boe); Average realised hydrocarbon price; Gross reserves (according to SPE rules): 1P – Proved reserve; 2P – Proved and Probable reserve; Costs incurred (HUF mn); Earnings (HUF mn); Exploration and development wells are available in the annual Data Library on the company’s website.