MOL Group Q1 results: solid performance amidst difficult external circumstances

MOL Group announced its financial results for the first quarter of 2024. MOL Group delivered USD 382 mn Profit before tax in Q1 2024, amidst continued government takes and turnarounds Downstream, the unfavourable effect of lower gas prices Upstream, and continued strong non-fuel dynamics in Consumer Services. MOL Group generated USD 402 mn simplified free cash flow in Q1 2024, 22% lower compared to the same period of last year. 

Chairman-CEO Zsolt Hernádi commented on the results: “MOL Group's financial results once again demonstrated the effectiveness of our resilient business model. While coping with the challenges of the external environment, we were able to deliver solid results. Our stability is key to strengthening Central and Eastern Europe’s security of supply and delivery of strategic investments, like the soon-to-be-inaugurated EUR 1.3 bn polyol complex. 

In March, we outlined an ambitious investment agenda in our updated strategy to increase the competitiveness of MOL as well as the industry in CEE. Despite the extra heavy government levies weighed on our performance, we remain committed to continuing our energy transition journey and developing our self-sufficiency further on.” 

Downstream results were supported by both petchem and refining margins but lower sales of own production weighed on performance. Extra government take in Hungary continues to impact results with the revenue-based tax, Brent Ural tax, and CO2 tax all having a considerable effect on quarterly results. 

Consumer Services marked a continuing improvement in non-fuel margin, meaning mostly expanding gastro, grocery, and non-food sales, while one-off gains on remedy sales of fuel stations also contributed to Q1 results. Despite a decrease in network size due to remedy handovers in Hungary, fuel sales volume increased by 6% year-on-year, while unit fuel margin dropped by 2% year-on-year. The number of Fresh Corner sites rose throughout the network to 1,260 in Q1 2024, from 1,172 in Q1 2023. 

Upstream production totaled 92.3 mboepd in the first quarter of 2024, which means 0,8 mboepd increase quarter-on-quarter. As the first gas was reached in Kazakhstan in December 2023, it resulted in +1.3 mboepd in Q1 2024. CEE production levels have decreased slightly due to the baseline decline in onshore assets in Croatia, while production in Hungary has retained at high levels thanks to successful efforts to counter natural decline. Group-level unit cost remained unchanged year-on-year despite general inflationary pressures, due to decreasing electricity prices, higher production, and composition shifting towards lower-cost assets. 

Circular Economy Services was affected by lower-than-expected Extended Producers Responsibility (EPR) revenue realization. The Deposit and Refund System (DRS) has been in operation since 1 January with ca. 2,400 Reverse Vending Machines installed and available at retail sites all around Hungary. 

Gas Midstream performance was marked by the combined effect of a favorable macroeconomic environment and changing demand for regional transmission services.