MOL-Beat the profit consensus because of an impairment reversal
- MOL beat the consensus on profit (+13%) and on EBIT (+11%) because of an impairment reversal but missed on EBITDA level by (2%). – please note these numbers includes the UK assets
- Segment-wise, clean CCS EBITDA missed the consensus a because of weaker than expected DS and (-20% vs. cons) consumer service segment (-20% vs. cons) but surprised on the upstream side (+8% vs consensus), while the combination of large one-off impairment reversal (+HUF 41bn) and significantly lower than expected financial expenses (+1bn vs -19bn consensus) but large tax expenses (-62bn vs. -35bn) lead to large profit beat.
Key positives:
- EPS arrived to HUF 253 including UK asset, without that EPS would be HUF 183, still relatively high given that Q1 is one of the weakest quarter during the year.
- ATH clean cash margin at upstream division (69 USD/bbl)
- Mgmt did not change the EBITDA nor its simplified FCF guidance despite the deconsolidation of UK assets meaning an implied 10-15% increase (assuming similar macro environment – annualized UK EBITDA should be around USD 400m).
Key negatives:
- Fuel price scheme pushed realized margin to 5.6 USD/bbl vs. 13.8 USD/bbl benchmark margin
- Large negative free cash flow (HUF – 130bn) because of big WC movement and CAPEX spending
- Further margin regulation is in place in Croatia, Serbia, Slovenia and BiH.
Magyar Olaj-Es Gazipari is an integrated oil and gas enterprise based in Hungary and active in central and eastern Europe. Co.'s core activities include: exploration and production of crude oil, natural gas and gas products; refining, transportation, storage and distribution of crude oil products in both retail and wholesale markets; importation, transportation, storage and wholesale trading of natural gas and other gas products; and the production and sale of olefins and polyolefins. TVK, the petrochemical affiliate of Co., is an olefin and polyolefin producer in Hungary.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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