Hungary's MOL Survives Poor Prices

Hungarian integrated energy firm MOL reported October 31 third-quarter clean current cost of supplies (CCS) pre-tax earnings (Ebidta) of $689mn, just 3% weaker than the same period last year. This was despite the drop in average realised crude oil (-18%) and gas prices (-36%), it said, which brought upstream Ebitda down from $319mn to $235mn in the quarter.

 On the strength of the result, MOL said it has raised 2019 full year guidance to "around $2.4bn" from "around $2.3bn."

Output was down about 1% to 107,500 barrels of oil equivalent/day but the company's year to date production, at 112,000 boe/d, is still higher than the guidance figure of 110,000 boe/d. It did not break down the figures into oil and gas.

Free cash flow remained positive in Q3, at $109mn. Downstream clean CCS Ebidta improved slightly to $272mn, as refinery margins rebounded from their first-half slump.

Downstream gas pre-tax earnings grew by 8% in Q3 2019 YoY to $27mn, driven by lower operating expenses -- fuel gas was cheaper -- and higher transmission volumes including imports and injections into storage, offsetting the negative impact of adverse tariff changes (effective from October 2018). Russian exporter Gazprom earlier that day said that it delivered an estimated 9.3bn m3 to Hungary in the first ten months of the year, a 22% increase over the total amount sold last year.

But capital expenditure rose with the compressor station project on the Hungary-Romania interconnector project.