József Simola, CFO, and Alexander Dodds, Executive Vice-President, Group E&P, talk about how the Hungarian-based oil and gas company's businesses are performing and their expectations for the full year.
For the first half of 2014, MOL reported an EBITDA of HUF 200 billion, a 22% decrease compared to the same period in 2013.
The upstream segment, in addition to the natural decline of its matured assets, faced significantly lower realized natural gas prices due to adverse regulatory changes. Moreover, there were asset divestures in Russia, the effects of which could only be partially mitigated by new asset purchases in the North Sea and intensified field development activities in the company’s international operations. Exploration costs increased due to MOL’s accelerated international work programs.
In the downstream sector, profit erosion was mostly attributable to the significant drop in motor fuel crack spreads (11% for gasoline, 16% for diesel), unplanned shutdowns as well as non-recurring costs related to the IES refinery conversion. These factors were only partially offset by stronger contributions from the retail and petrochemicals divisions.
In H1 2014, MOL Group generated HUF 201 billion operating cash flow, before working capital changes, which is 17% lower than the same period last year.
Net financial expenses were HUF 32 billion, mainly representing an increase in net foreign exchange losses on borrowings, receivables and payables.
Edited from various sources by Katie Woodward
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/04082014/mol-group-reports-h1-2014-results-1193/