Hungary: In Q3 2020 MOL’s EBITDA strongly rebounded from the Q2 lows, SEE Energy News
After the consequences of the pandemic, Hungarian oil and gas company MOL announced that its third quarter Clean CCS EBITDA strongly rebounded from the Q2 lows and came in at 514 million euros, only 12 % lower than in the same period last year.
This result brought Q1-Q3 2020 EBITDA to 1.34 billion euros, 14 % lower year-on-year, implying full year 2020 EBITDA likely to be at the higher end of the guidance range, around 1.6 billion euros. Simplified free cash flow jumped in Q3 to 258 million euros on continued CAPEX discipline, bringing year to date simplified free cash flow to 558 million euros, 42 % higher than in the first three quarters of last year. Organic capital expenditure was down by 33 % in the first nine months, reflecting strong CAPEX control as well as some COVID-19-related slowdown.
Upstream production increased by 8 % compared to the previous quarter to 126.9 thousand barrels/day and it was 18 % higher than a year ago in the same quarter. The volumes were boosted by higher net entitlement allocation and a full quarter contribution of ACG. MOL’s net entitlement production in the Azeri asset was 29.8 thousand barrels/day in Q3 2020. Oil and gas prices recovered in Q3 but are still well below the year-ago level. Q1-Q3 Upstream EBITDA was clearly driven by the huge negative price impact on the back of the significantly lower oil (Brent fell 37% year-on-year to 41 dollars/barrel) and realized gas prices (-34 % year-on-year).
Downstream segment Clean CCS EBITDA strongly rebounded and nearly doubled from the Q2 lows but remained 26 % weaker than in 2019 due to depressed refinery margins and slightly weaker petchem margins. The polyol project exceeded 70 % overall completion at the end of Q3, although progress is somewhat behind schedule as a result of the pandemic situation. Pandemic protocols have been introduced to mitigate the risk of infection within the construction community and to safeguard business continuity. In Q3, a new rubber bitumen plant, for recycling tire waste, has been completed in Hungary.
Consumer Services reached new all-time high quarterly result at 154 million euros, up by 14 % year-on-year, supported by strong fuel performance. Lower OPEX also helped EBITDA due to the network-wide saving actions. Simplified free cash flow grew by 27 % in Q3 year-on-year and by 14 % in the first three quarter of 2020 to over 250 million euros, which is already exceeding the full-year 2019 level.
The Gas Midstream segment EBITDA grew by 59 % year-on-year in Q3 2020 to 36.2 million euros, as increasing demand for cross-border capacity resulted in higher regulated revenues, while operating expenses were lower. Higher capacity bookings and lower OPEX boosted EBITDA in Q1-Q3, resulting in 37 % higher performance than in the same period last year.
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