Hungary Mol seen past some torpid times

Mol’s Clean CCS EBITDA, estimated with replacement prices, is to show a 4% yr/yr decline for January-March 2019, according to the consensus estimate of 12 analysts. Although it may be premature to draw any conclusions regarding the full-year management guidance, the USD 2.3 bn EBITDA target clearly appears to be attainable after last year’s USD 2.69 bn. Analysts forecast a 20% yr/yr contraction in the group’s operating profit and a 16% net profit erosion.

As regards the different segments, the consensus forecast is a major 11% yr/yr rise in Upstream (Exploration & Production) EBITDA. Downstream (Refining & Marketing) EBITDA is expected to show an even more impressive, cc. 24% annual increase, and even the smaller-weight Gas Midstream EBITDA is forecasted to be up 17% over Q118. The increasingly important Customer Services segment is projected to show a nearly 14% EBITDA expansion in annual terms.

Although the group’s refinery margins have been showing increases from one month to another in January-March, the USD 3.1 per barrel level recorded in Q1 is behind not only the base period’s USD 5.3 but also the fourth quarter’s USD 4.9 prints. We actually have to go back to Q2 2014 to find an even lower margin. This phenomenon - relating primarily to the end-2018/early-2019 collapse of gasoline margins and the rearrangement on the market of refineries - could have had a detrimental impact on Downstream profitability.

The group-level petrochemical margin also declined to EUR 415.2/tonne in Q1 2019 from EUR 438.1 in the base period and EUR 429.1 in Q418. This is clearly a negative turn of events for the profitability of the segment, particularly because Mol would like to have its petchem business to have a greater role in its operations.



Cover photo by MTVA/on commission by László Róka

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