Mol Nyrt., Hungary’s largest refiner, headed for the lowest level in more than three months after Citigroup Inc. recommended investors sell the shares, citing challenges facing the company’s production plans.
The stock fell 1.3 percent to 16,095 forint at 11:24 a.m. in Budapest, set for the weakest level since April 29 and bringing a retreat in the past four trading days to 3 percent. Mol led a drop in the benchmark BUX stock index, which slipped 0.4 percent.
Mol, which has the biggest weighting in the gauge, said yesterday second-quarter gas production in Croatia and Hungary decreased, a day after announcing the sale of a stake in a mature field in Russia. Net income for the three months through June was 20 billion forint ($89 million), missing the 24 billion-forint median estimate of six analysts in a Bloomberg survey.
“Core production assets in Hungary and Croatia continue to mature,” Mukhtar Garadaghi, a London-based analyst at Citigroup, wrote in an e-mailed note today, lowering the shares from neutral. “Mol’s long-term business plans look challenging given little upstream growth in the medium term.”
The oil and gas company said production at the Shaikan field in the Kurdistan region of Iraq is “within closer reach” after approval from the local government, which will help offset the decline of mature fields elsewhere. Upstream operations were “the weakest link” amid lower gas output and declining crude oil prices, according to Peter Szentirmai, a Budapest-based analyst at KBC Securities, a unit of KBC Groep NV. (KBC)
Four analysts recommend investors buy the shares of Mol, while 13 say hold the stock and two say sell, according to data compiled by Bloomberg.
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