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Mol Nyrt. (MOL), Hungary’s largest refiner, expects “average” downstream profitability in the last three months of 2012 after the segment helped profit jump 86 percent in the third quarter.
The decline in gasoline and diesel refining margins “indicate that refining results will be average, compared with a strong performance in the previous quarter,” Chief Financial Officer Jozsef Simola said in a conference call today.
Mol third-quarter net income rose to 67.5 billion forint ($301 million) from 36.4 billion forint a year earlier, the company said in a filing to the Budapest Stock Exchange earlier today. The median estimate of five analysts in a Bloomberg survey was for a profit of 53.1 billion forint.
Mol, which is active in 13 countries, including Iraq, Russia, Pakistan and Oman, benefited from improving gasoline and diesel refining margins, higher sales volumes and inventory gains during the quarter. Production volumes are set to improve “slightly” in the October-November period while demand in central and eastern Europe will remain subdued, Simola said.
Stripping results of one-time items, Mol’s figures “are still prettier than expected in terms of all major indicators,” analysts at Budapest-based brokerage Equilor Zrt. said in a note to clients today. “Investor wariness may ease in light of today’s results and shares may rise well above the 19,000 forint level.”
Mol has advanced 8 percent this year, compared with a 14.7 gain in OMV AG (OMV), Austria’s largest energy company. Mol shares rose 0.2 percent to 18,780 forint by 9:18 a.m. in Budapest.
The company expects the price spread between Brent and Ural oil to rise to about $1 in 2013 from $0.5 in the third quarter, Simola said, helping Mol’s profitability which primarily uses Ural oil.
Earnings before interest, tax, depreciation and amortization rose 34 percent to 173.7 billion forint, boosted by a percent jump in downstream Ebitda, which was the strongest result since the second quarter of 2008.
Mol expects production in civil-war ridden Syria to resume in 2014 the earliest and doesn’t plan further acquisitions in Kurdistan as the development of the company’s current fields will cost several billions of dollars in coming years, Simola said.
To contact the reporters on this story: Edith Balazs in Budapest at firstname.lastname@example.org; Zoltan Simon in Budapest at email@example.com
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