MOL group q1 results: robust ebitda mainly supported by very strong upstream performance

Today, MOL Group announced its financial results for Q1 2022. MOL Group delivered USD 833mn Clean CCS EBITDA in Q1 2022, on the back of the very high oil and gas prices. However, results were down by 6% compared to the previous quarter.

Chairman-CEO Zsolt Hernádi commented on the results: “2022 brought new challenges once again. Amongst rapidly changing external conditions, volatile and often adverse circumstances, MOL Group proved that we have the ability to react swiftly, a USD 833mn Q1 2022 Clean CCS EBITDA generation proves that we have been on the right track.

However, the greatest challenges in the upcoming period are no less than to secure energy supply security and maintain our profitability. We’re making significant efforts to adapt to the new environment and diversify our portfolio further to secure energy supplies to the CEE region. Also, MOL is in the middle of a transformation journey which requires heavy investments. We are very much committed to continue this process in the current volatile environment too. MOL Group has shown resilience during several crises in the past and I am confident that we will maintain our crucial role in providing a predictable energy supply and remain a trusted partner of our customers, stakeholders and the wider society.

Upstream EBITDA reached USD 504mn in Q1 2022, increased by 104% compared to last year’s Q1 result. The good performance was driven by the continuously higher oil and gas prices, the more than 40 USD/bbl uplift of Brent oil price and the fivefold increase in spot gas prices. Production volumes were down compared to last year’s same period, due to the natural decline in CEE and in Pakistan and the production decline of the ACG asset in Azerbaijan. Simplified free cash-flow contribution of Upstream rose to USD 420mn from USD 160mn year-on-year. As for the operations, MOL signed an agreement with Waldorf Production Limited (“Waldorf”) covering the sale of its entire Upstream portfolio in the United Kingdom.

Downstream Clean CCS EBITDA came in at USD 254mn, exactly the same as last year in the same period as volatile external environment influenced the results both positive and negative ways. Diminishing petchem contribution was offset by higher Refining and Marketing EBITDA generation. Ural differential and gasoil crack- driven margin expansion in March was partly off-set by decreasing price realization and significantly rising energy costs. Meanwhile, sales volumes increased by 11% year-on-year, pulled by the skyrocketed Hungarian sales as the market has been distorted by the wholesale fuel price cap introduced since mid-February. Scaling up sustainability and transformation in Downstream continued in Q1 2022: greenfield investment of a 100kT propylene plant started, acquisition of ReMat, a market leading plastic recycler in Hungary was completed in this quarter. The polyol complex reached a mechanical completion ratio of 96% by Q1 2022.

Consumer Services EBITDA decreased by 44% in Q1 2022 compared to the result of last year’s same period, despite sales volume increased by 20% and the number of transactions increased by 7% year-on-year, resulting in expanding market share throughout the CEE region. Fuel price regulatory measures in Hungary, Croatia, Serbia, Slovenia and Bosnia and Herzegovina reset EBITDA to around Q1 2017 levels as fuel margins lowered on group-level. Non-fuel margin increased of 8% year-on-year, supported mainly by grocery, gastro and hot dog sales uplift. The number of Fresh Corner sites rose to 1081 in Q1 2022 from 984 at Q1 2021. In January 2022, MOL signed a set of agreements with Grupa Lotos SA and PKN Orlen covering the sale and purchase of several portfolio elements and as a result MOL acquires 417 service stations in Poland that allows the company to reach 3rd position in the local fuel retail market. This deal is subject to merger clearence.

Gas Midstream Q1 2022 EBITDA reached USD 48mn, the result is similar to the previous year’s Q1 performance. Further climbing gas purchase prices had negative impact and resulted in more than doubled gas consumption cost.