Hungary: MOL transmits positive 2015 results thanks to refineries

, SEE Energy News

In 2015 MOL Group achieved a clean CCS EBITDA profit of $ 2.5 billion, 13 percent more than the year before, mainly thanks to record financial results of the refining business.
Despite the low price of oil, MOL last year surpassed its goal of $ 2.2 billion CCS EBITDA, the statement said.

In the refining business, or ‘downstream’ as it is called in industry jargon, “historically the strongest financial result” has been achieved according to MOL.

In this segment, MOL Group achieved a clean CCS EBITDA profit of 1.65 billion dollars, which is more than double increase compared to the results from the previous year.

“Downstream successfully seized the opportunities in the external environment, while 50 percent of the amount of EBITDA amount is the result of internal efficiency improvement program,” said MOL, co owner of Croatian INA.

In  “upstream” segment, or exploration and production of oil, EBITDA excluding special items amounted to 719 million dollars last year, which is 26 percent less than in 2014 and is the result of drop in oil prices.

Total hydrocarbon production rose 7 percent, to 104 thousand boepd (barrels of oil equivalent per day) last year.

In the meantime in Croatia the overall production increased by 7 percent compared to the previous year, while in Hungary the production remained at almost the same levels as in the previous year.

“This is a significant achievement compared to initial forecasts on the annual decline of 5 percent. With regard to the production of crude oil in Croatia it has grown by 20, and in Hungary by 5 percent,” the statement said.

He added that MOL achieved a significant free cash flow of $ 2.1 billion.

The company points out that the property in Acra Bijeel in Kazakhstan was written off in the last quarter of 2015 due to the abandonment of fields. MOL has also reduced the account value of the assets in the last quarter, primarily due to a revised forecast for oil prices used for evaluation of the said property, which is mainly located in the UK.

In the gas company business last year, EBITDA was achieved in the amount of 213 million dollars, similar to 2014.

Oil and gas industry, including MOL, is faced with the most difficult external environment over the past twenty years, given that oil prices have fallen more than 70 percent compared to their peak in the summer of 2014, from more than 100 to around $ 30 per barrel.

“Despite these challenges, we managed to increase our score by 13 percent compared to 2014, exceeding our goals. These achievements have set MOL above most integrated oil companies. The dramatic changes in the environment have forced us to certain painful but necessary decisions, including the revision of the actual value in upstream, resulting in impairment of property, but without cash impact, “said Zsolt Hernádi, Chairman and CEO of MOL Group.

He noted, too, that in 2015, MOL has proved to have effective downstream platform that is able to generate income and take advantage of market opportunities while also continuing investment in long-term business growth.

“We are in process of harmonization of our upstream segment  in order to ensure profitable operations even with an oil price of $ 35. Our ultimate goal for 2016 is EBITDA in the amount of $ 2 billion and ensuring  a satisfactory inflow of money that would enable us to finance internal investment needs, as well as the payment of dividends to our shareholders, even in a challenging environment, “concluded Hernádi, transmits