MOL Group Posts Almost USD 1 Billion Profit in 2016

INA Offshore platform. Photo: MOL Group

By Aiswarya Lakshmi

MOL Group significantly outperformed its initial USD
2bn target for 2016 and delivered a clean EBITDA of USD 2.15bn,
which is only moderately down compared with the previous

Upstream has shown great resilience to the deteriorating external
environment. A further 17% decline in Brent prices and a 23%
decline in realized gas prices were offset by higher production
and cost discipline.

As a result, EBITDA remained nearly flat at USD 675mn and the
business generated over USD 250mn free cash flow equalling USD 7
per barrel of oil equivalent. Production grew by 6% to 112
thousand barrels of oil equivalent per day with additions from
CEE's onshore fields - where production was the highest since
2012 -, Pakistan, UK and the Baitugan field in Russia.

Cost savings across the board resulted in a 13% decrease in OPEX
per unit. The targets of the New Upstream Program have been
therefore fully delivered.

Downstream once again posted robust results, delivering USD 1.5bn
clean CCS EBITDA. This is only slightly behind the all-time high
levels in 2015. The primary driver behind the decline was the
expected normalization of the refining and petrochemicals

Consumer Services (Retail) EBITDA grew by 40%, supported by the
recent acquisition of nearly 450 service stations across 5
countries in CEE, the successful roll out of MOL Group's non-fuel
strategy as well as strong demand trends. The Next Downstream
Program, a three year internal efficiency initiative, which aims
to deliver USD 500mn EBITDA improvement is on track with USD 340
mn already achieved during the program's first two years.

The Gas Midstream segment posted a full-year EBITDA contribution
of HUF 54.5bn (USD 194mn) in 2016, slightly below the previous

Chairman-CEO Zsolt Hernádi commented the results: "2016 was a
year of great achievements and important milestones. It marked
the successful start of a major transformational journey as we
approved our new long term strategy, MOL Group 2030. We also
delivered on our targets and generated very strong free cash flow
on the back of our resilient, integrated business model."

Zsolt added: "Upstream generated over USD 250mn free cash flow at
the bottom of the cycle and achieved the highest CEE onshore oil
and gas production since 2012. Downstream posted robust results,
only slightly behind the record-high 2015 levels, despite lower
refinery and petrochemicals margins. Consumer Services continued
to post impressive growth on the back of well-timed acquisitions
and the successful roll-out of our new non-fuel concept. In 2017
we will again generate at least USD 2bn EBITDA, comfortably
covering organic capex, dividends to our shareholders as well as
funding for the transformational projects."

Feb 27, 2017

Let's block ads! (Why?)

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.