Hungary’s MOL Group announced its financial results for the first quarter of 2024. The company delivered 382 million US dollars in profit before tax, amidst continued government takes and turnarounds in the downstream, the unfavourable effect of lower gas prices in the upstream and continued strong non-fuel dynamics in consumer services. The simplified free cash flow is 22 per cent lower compared to the same period of last year.
“MOL Group’s financial results once again demonstrated the effectiveness of our resilient business model,” commented Chairman-CEO Zsolt Hernádi. “While coping with the challenges of the external environment, we were able to deliver solid results. Our stability is key to strengthening Central- and Eastern Europe’s security of supply and delivery of strategic investments, like the soon-to-be-inaugurated 1.3 billion euros polyol complex.”
“In March, we outlined an ambitious investment agenda in our updated strategy to increase the competitiveness of MOL as well as the industry in CEE,” he added. “Despite the extra heavy government levies weighed on our performance, we remain committed to continue our energy transition journey and develop our self-sufficiency further on.”
Downstream results were supported by both petchem and refining margins but lower sales of own production weighed on performance. Extra government take in Hungary continues to impact results with the revenue-based tax, Brent Ural tax and CO2 tax all having a considerable effect on quarterly results.
Consumer Services marked a continuing improvement in non-fuel margin, meaning mostly expanding gastro, grocery and non-food sales, while one-off gains on remedy sales of fuel stations also contributed to the first quarter results. Despite a decrease in network size due to remedy handovers in Hungary, fuel sales volume increased by 6 per cent year-on-year, while unit fuel margin dropped by 2 per cent year-on-year.
Upstream production totalled 92.3 mboepd in the first quarter of 2024, which means 0,8 mboepd increase quarter-on-quarter. As first gas was reached in Kazakhstan in December 2023, it resulted +1.3 mboepd in the first quarter of 2024. CEE production levels have decreased slightly due to a baseline decline in onshore assets in Croatia, while production in Hungary was retained at high levels thanks to successful efforts to counter natural decline. Group-level unit cost remained unchanged year-on-year despite general inflationary pressures, due to decreasing electricity prices, higher production and composition shifting towards lower-cost assets.
Circular Economy Services was affected by lower than expected Extended Producers Responsibilty (EPR) revenue realisation. The Deposit and Refund System (DRS) is in operation since 1 January with around 2,400 Reverse Vending Machines installed and available at retail sites all around Hungary.
Gas Midstream performance was marked by the combined effect of a favourable macroeconomic environment and changing demand for regional transmission services.