MOL Group has announced its second quarter and half year results. With half year clean CCS based group EBITDA reaching US$1.2 billion, MOL Group raised its 2015 target to US$2.2 billion. MOL Group achieved its best ever quarterly result in 2Q15, with the Downstream segment fully capturing the favourable external conditions.
In 1H15, MOL delivered a clean CCS EBITDA of US$1.2 billion, which bodes well with the upgraded full year’s target of US$2.2 billion. Organic CAPEX spending amounted to US$557 million in the first two quarters and operating cash flow (excluding working capital adjustments) well exceeds organic investments, which is a great achievement in the current business environment.
Upstream EBITDA, excluding special items, amounted to HUF114 billion (US$414 million) in 1H15, a decrease of HUF27 billion compared to 1H14. The average daily hydrocarbon production increased by 8% in comparison to the base period and averaged 103 500 bpd during 1H15. Production increased even in the matured CEE region (by 4%) due to successful well optimisation programmes, new offshore wells and improved reserves transfer.
In 1H15, Downstream clean CCS based EBITDA increased fourfold to HUF202 billion (US$730 million). Each business segment substantially improved its contribution to the Group result. Clean EBITDA of Refining and Marketing as well as petrochemicals increased fivefold during the period, the latter representing 35% of the total Downstream result in 1H15. Apart from the better margins, improving market demand and continuous internal efficiency improvement contributed to the record high results.
In 1H15, MOL Group generated HUF313 billion (US$1.135 billion) operating cash flow, before working capital changes, which is 55% higher than in the same period in 2014, mainly supported by strong Downstream performance. Meanwhile, net gearing increased slightly, from 18.4% to 21.4% by the end of the period.
In 2Q15, MOL Group generated a clean CCS EBITDA of HUF180 billion (or US$648 million), which is the best ever result by the Group. The Downstream business delivered its strongest ever quarterly result and contributed more than two thirds to the corporate clean CCS EBITDA.
“MOL Group delivered its best ever quarterly results. We expect to significantly exceed our previous expectations and surpass our 2015 clean EBITDA target by 10%, reaching a level around US$2.2 billion and matching our 2014 performance. This is a great achievement in light of ongoing weakened oil prices and demonstrates the strength of our integrated business model. We are proud of our Downstream team, which delivered its best ever results. This shows that we are well placed to benefit from the present opportunities in the downstream sector and also reflects the successful implementation of our efficiency enhancement measures. Meanwhile, in order to ensure efficient capital allocation we have further scrutinised potential spending. Currently we expect around US$1.3 billion organic investment. We will maintain our excellent free cash flow generation and strong financial position, which is a key advantage in the current volatile environment,” said Chairman and CEO Zsolt Hernádi.
Adapted from press release by Rosalie Starling