Hungary’s Mol Affirms Earnings Outlook as Investment Target Cutby
Mol’s net income soars 45 percent in April-June period
Company cuts 2016 organic Capex plan by $200 million
Hungarian energy group Mol Nyrt. confirmed its earnings guidance and reduced investment plans for this year after a 45 percent jump in second-quarter net income on the back of rising oil prices and production.
Net income rose to 83.5 billion forint ($299 million) in the April-June period, compared with 57.5 billion forint a year earlier, Mol said on Friday. Earnings before interest, taxes, depreciation and amortization on a clean-current cost of supplies basis fell 10 percent to 160 billion forint. Mol is confident it will reach its target of more than $2 billion this year for this measure, the most closely watched for the group, Chairman Zsolt Hernadi said.
Hungary’s second-largest listed company by market value, which has increasingly relied on its refining and retail operations amid low oil prices, increased production of oil and gas in the second quarter and made some fresh discoveries in Pakistan. At the same time, Mol cut this year’s capital expenditure target by a further $200 million to up to $1.1 billion to ensure it can cover dividend and investment spending from cash flows even at oil prices as low as $35 per barrel, it said.
"We also adjusted our CAPEX program and plan to spend only on projects which are robust at lower oil prices," Mol said in the statement.
Mol’s shares have gained 20 percent this year, compared with a 15 percent advance in the benchmark BUX stock index over the same period.