Upstream and Petrochemicals Boosted MOL’s Q3 Results, World Market Turmoil Represents Unpredictability
Today, MOL Group announced its financial results for the third quarter of 2021. Supported by the macro-economic environment, the doubling petrochemicals margins compared to last year and the internal performance of the company, Clean CCS EBITDA strongly rebounded and came in at USD 1,025mn in Q3 2021. This result brought Q1-Q3 2021 EBITDA to USD 2,583mn that allows MOL to further upgrade full year guidance to reach or even exceed USD 3.2bn. Organic capital expenditure was 18% higher year-on-year in Q3 2021, reaching USD 360mn of which USD 68mn was spent on transformational projects including the Polyol plant construction. Meanwhile, world market perturbances, soaring commodity prices, logistics difficulties and the 4th wave of Covid-19 pandemic create an overall relatively unpredictable operational environment.
Chairman-CEO Zsolt Hernádi commented the results: “The good results of the third quarter have been supported by the favorable external environment and the rebounding regional economic growth. At the same time we also leveraged our strengths, the resilient integrated business model and our highly cost-efficient asset base and operation.
“Our very strong year-to-date 2021 delivery allows us to further upgrade our annual EBITDA guidance, which is expected to reach or even exceed USD 3.2bn. At the same time soaring commodity prices and the implications of the coronavirus pandemic pose a significant risk to the economy and generate a very volatile operational environment.
“As a result, we remain focused to maintain financial and operational resilience and deliver on our longer-term sustainability related commitments. A higher year-to-date free cash flow generation allows us to fund our sizeable upcoming transformational investments within the framework of MOL’s 2030+ strategy.”
- Clean CCS EBITDA resulted in USD 1,025mn in Q3 2021, mainly driven by the macro-economic environment and the strong internal performance
- Clean CCS EBITDA for the first 3 quarters reached USD 2,583mn, 63% higher than last year in the same period, recovering from pandemic-hit 2020 base
- Annual EBITDA guidance further upgraded, expected to reach or even exceed USD 3.2bn
- Upstream EBITDA jumped by 87% year-on-year to USD 396mn, driven by the improvement of the macro-economic environment
- Downstream Clean CCS EBITDA increased to USD 436mn in Q3, boosted by favorable macro conditions such as doubling petrochemical margins year-on-year
- Consumer Services reached USD 211mn EBITDA in Q3, improving by 15% compared to Q3 last year due to the strong economic recovery in the core regions
- Soaring commodity prices and the progression of the pandemic in MOL’s core region creates a volatile and relatively unpredictable operational environment
Upstream became the largest free cash-flow contributor of the Group in Q3 2021 as EBITDA jumped by 87% year-on-year to USD 396mn and it was 18% higher even in comparison with the strong previous quarter, supported by the macro-economic environment. Production volumes slightly decreased and resulted in 107.4 mboepd, due to higher crude oil prices reducing net entitlement production in the ACG asset in Azerbaijan and due to the natural decline in Central and Eastern Europe.
Downstream Clean CCS EBITDA increased by 116% to USD 436mn compared to the same period last year, supported by stronger petrochemicals and refining contribution, rebounding from the 2020 lows. Sales volumes grew by 7% year-on-year in Q3 due to stronger regional fuel demand. Integrated petchem margin doubled in Q3 year-on-year, however declined from the record high levels of Q2, due to rising oil- and lower polymer product prices. The polyol plant construction project progressed well and exceeded 89% overall completion at the end of Q3 2021.
Consumer Services Q3 2021 EBITDA reached USD 211mn supported by recovering regional sales volumes and non-fuel contribution. The increase was backed by the strong economic recovery in core markets. Motor fuel demand surpassed Q3 2019 consumption levels in Hungary, Slovakia and in Croatia. The number of transactions increased by +12% year-on-year, as in the same quarter last year customer’s behavior was more influenced by the pandemic situation. The number of Fresh Corner sites rose to 1,028 in Q3 from 1,008 in the previous quarter.
Gas Midstream EBITDA decreased by 30% year-on-year in Q3 to USD 30mn, as both transit revenues and regulated income fell as a result of decreased cross-border capacity and transmission demand. Both domestic transmission volumes and export transmission volumes further declined by 26% in Q3 compared to the same period in 2020. Capital expenditures increased due to the Serbian-Hungarian interconnector project.
Sustainalytics ESG Risk Rating Report continues to recognize MOL’s ESG efforts, recently ranked MOL Group in the Top 3% percentile with 7th lowest risk among 256 global oil and gas peers in the industry group. Climate & Environment related material issues received low risk ratings in an oil and gas industry context.
