Hungary: The Board of MOL decided not to distribute dividends for 2019

, SEE Energy News

The Board was empowered to make the decision by a government decree allowing the boards of listed companies to approve annual general meeting proposals because of a ban on gatherings due to the coronavirus pandemic. The Board of Hungarian oil and gas company MOL has decided to put all of last year’s profit into retained earnings, therefore no dividend will be paid for 2019.

MOL said earlier in April that its Board is proposing placing all of last year’s profit into retained earnings, in line with short-term efforts focusing on cash preservation and retaining maximum flexibility. Once the situation normalizes and circumstances allow for it, these retained earnings may be used for cash dividend distribution upon the decision of shareholders. The company also said that it is withdrawing its guidance for 2020 EBITDA because of uncertainty related to the coronavirus pandemic, the extreme volatility of the external environment and the unpredictability of volumes development across its businesses. 2020 CAPEX will be at least 25 % lower than the original guidance of between 1.9 and 2.1 billion dollars. It could even fall below 1.5 billion dollars because of the delay of non-essential investments and supply chain bottlenecks caused by lockdowns.

MOL recorded a net income in the amount of 110 million euros in the fourth quarter of 2019, which is 53 % lower compared to the same period in the previous year, mostly due to a bigger tax bill. Revenues were practically flat at some 4.16 billion euros, while total operating costs were also close to 2018 level with the base period at around 4.02 billion euros. A 16 million euros financial gain, compared to a 20 million euros loss in the same period in 2018, supported an 11 % rise in pre-tax profit to some 130 million euros. But a 33 million euros cost for corporate profit tax weighed on the bottom line, unlike in the previous year, when deferred taxes lifted earnings by 83 million euros. MOL’s net income for the full year fell by 26 % to 660 million euros, as operating costs rose a little more than revenues. Revenues increased slightly by 2 % to 15.7 billion euros, while total operating costs increased by 3 % to 14.85 billion euros. Operating profit fell by 17 % to 870 million euros.

Hungarian state is the largest single shareholder in MOL with 15.24 % stake.

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