MGYOY Mol Magyar Olay Es Gazipari Rt (PK)

   By Margit Feher 
 

BUDAPEST--Central European integrated oil and gas company MOL Nyrt., Hungary's largest firm by revenue, booked a net loss in the fourth quarter on a steep impairment charge, a result of plunging global oil prices.

Still, full-year earnings before interest, tax, depreciation and amortization, an indicator of profitability in the oil industry that investors watch the closest, was $2.48 billion. That beat the company's upwardly revised $2.2 billion target for 2015, thanks to the robust refining performance.

"Our ultimate goal for 2016 is to generate around $2 billion Ebitda and sufficient cash flows to be able to continue to cover both internal investment needs and dividends to our shareholders," Chairman and Chief Executive Zsolt Hernadi said in MOL's earnings released Wednesday. The 2016 Ebitda target would also allow for small-size mergers and acquisitions, the company added.

MOL projects global oil prices will range between $35 and $50 a barrel this year versus $52.4 in 2015.

It targets to "comfortably" pay dividends even at an oil price of $35 a barrel, the company said.

To "reflect the new oil price reality," MOL has scaled back its capital expenditure plan for 2016 significantly, to $1.3 billion from up to $1.5 billion earlier, and plans to cut operating expenses by up to $100 million this year, it added.

In the fourth quarter, the company generated a net loss of 437.7 billion forints ($1.58 billion), several times deeper than a net loss of HUF69.3 billion a year earlier. It translated to a loss of HUF4,780 a share, up from a loss of HUF786 a share a year earlier.

Asset impairment charges amounted to HUF504 billion, exceeding most analysts' expectations. MOL already flagged in November a HUF131 billion charge on its Akri-Bijeel block in Kurdistan. Additional write-offs related to lower oil price assumptions included a HUF218 billion item on its North Sea upstream assets in the U.K. and a further HUF109 billion related to its Croatian oil and gas company INA.

The write-offs didn't affect clean Ebitda, which was HUF147.3 billion after a quarterly record high of HUF204.5 billion in the third quarter, and down 1% from HUF146.5 billion a year earlier. It was in line with analysts' forecast of HUF147.6 billion. Clean earnings don't include the revaluation of inventories and one-off items.

Downstream--or refining and marketing--operations posted a robust result after historically strongest quarterly results in the previous three months. Downstream clean Ebitda was HUF105.7 billion, up 43% from HUF74 billion a year earlier.

The clean Ebitda of the upstream--or exploration and production--segment was HUF44.1 billion, down by a sharp 32% from HUF65.3 billion a year earlier.

(END) Dow Jones Newswires

February 23, 2016 19:58 ET (00:58 GMT)

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