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MOL Group ensures continuous supply security with optimized operational and financial measures

  • MOL Group implements health, safety, operational and financial measures in response to the COVID-19 pandemic and economic situation
  • MOL withdraws its EBITDA guidance for 2020, lowers both CAPEX and OPEX levels
  • Operations and production continue uninterrupted, with optimized operations schedule and volumes wherever necessary

Budapest, 8 April 2020MOL Group implements measures not only to mitigate the impact of the current situation on the Group, but also to allow MOL to emerge from the crisis stronger. The company is focusing on protecting the health and safety of its employees, adjusting operations to minimize the spread of COVID-19 and adapting its production volumes to the altered market demand. Operational and capital expenditures will be reduced materially to preserve cash and to allow MOL to manage through challenging times even in the case of a longer lasting crisis.  

Constantly adapting to the ever-changing situation, MOL has implemented different actions and created new solutions in the past few weeks to reduce the likelihood of infection among employees and customers. These preventive and precautionary measures affect retail, downstream and upstream sites as they support social distancing, increase hygienic awareness and include the provision of protective equipment to our colleagues, the changing of shift patterns throughout the Group’s plants and exploration sites, the implementation of testing in key operational areas and the switch to home office wherever possible.

COVID-19 emergency measures by governments in MOL’s countries of operations have resulted in partial or full lockdown, significantly slowing down economic activity in the company’s core CEE countries. In order to remain resilient, MOL Group has updated its financial and operational guidance.

Due to the uncertainty about the duration and impact of the coronavirus pandemic, the extreme volatility of the external environment, and the unpredictability of demand across the businesses, MOL is

  • withdrawing its EBITDA guidance for 2020;
  • lowering capital spending by at least 25% to below USD 1.5bn in 2020, following a project-by-project review to delay non-essential investment;
  • completing a comprehensive review of operational expenditure to preserve cash
  • maintaining ample liquidity even after closing the ACG transaction, with around USD 2.0-2.5bn on hand, to weather a potentially longer-lasting crisis and grab opportunities once normalization begins; and
  • retaining after-tax profits from 2019 fully until the situation normalizes, when they might be paid out as dividends, should shareholders so decide. 

MOL Group’s Chairman-CEO Zsolt Hernádi commented:

“The world is facing an unprecedented challenge. Our life has changed completely in the last few weeks. The energy industry, while better positioned to weather the economic hardships than some others, enters a period of uncertainty it has probably never faced before, with scenarios ranging to extremes, which were impossible to imagine even a few weeks ago.

MOL has proven its adaptability many times before; we have seen and overcome several shocks in the past. We have shown that we are able to operate successfully in a highly volatile external environment, thanks in no small part to our high-quality assets, our resilient, integrated business model and most importantly to our dedicated, highly-skilled workforce. MOL enters this difficult period in a good shape – and I am sure it will emerge from it even stronger, and certainly with important lessons learnt.

At the end of the day, it all comes down to our investments into human capital – to the dedicated work of almost 25,000 of my colleagues. We have many assets in many countries, but it is our people, who are the key to our resilience. We have done and will continue to do everything to protect their health, especially those who need to be physically present at our sites to ensure both business continuity and supply security.

I am extremely proud of my colleagues who came up with the idea of switching a lubricants production line to manufacture sanitizers. While in normal times this may also have been a good business proposition, today it is our responsibility and obligation to come up with innovative ideas and solutions to help to contain the virus, protect our employees and fight side by side with the governments, public authorities and communities in our countries of operations. I personally believe that the way a company behaves in a crisis will show its real character and strength. MOL is determined to be a source of stability in a world plagued by uncertainty and will prove once again that it has a place in the “champions league” of energy companies.”

Operational update on the key businesses:

  • In Upstream, production was around 110 mboepd in Q1, in line with earlier guidance. Lower demand for fuels, full storage capacities and reduced refinery runs may however lead to temporary production curtailment in some of our international assets, potentially offset by more entitlement barrels due to the low oil price. In light of the uncertain macroeconomic environment, we are changing production guidance to 115-120 mboepd from 120 mboepd (assuming a 6-month contribution from ACG). We have put in place a set of actions to adjust expenditures and reduce our portfolio breakeven towards USD 25/boe.
  • Downstream. Lockdowns in core countries of operations have resulted in a significant drop in demand of 20-40% for key product groups. While this has created operational challenges and a need for continuous optimization across our high-quality downstream assets, we are also making use of currently attractive margins by keeping all refineries running, even if at reduced rates. MOL will continue to provide a safe and steady supply of oil and chemical products in all core countries.
  • Consumer Services. After a strong operational and financial performance in Q1, MOL Group has experienced declining sales as borders have been closed and social activities restricted. As a result, MOL Group has refocused operations to provide reliable and safe supply across our network and remain cash flow positive. Targets and guidance set for 2020 are being withdrawn here as well, given the unknown duration of measures restricting non-essential travel.

MOL Norge discovers oil and gas in the North Sea

BUDAPEST, 18 March 2020 - MOL Group’s wholly owned subsidiary MOL Norge AS and its joint venture partners have discovered oil and gas in an offshore field located about 200km west of Stavanger in the Norwegian part of the North Sea.

The exploration well in the 820S licence area was drilled to a maximum depth of 2,652 meters below sea level and oil and gas were found in a number of formations and were successfully tested for about 3,463 barrels of oil equivalent per day. The potential resources discovered in the main formation are between 12 and 71 million barrels of oil and gas equivalent.

The commerciality of the discovery will be determined later, following additional technical work.

MOL Norge AS with 40% working interest is the operator of the 820S license on behalf of partners Lundin Norway AS (40%), Wintershall Dea Norge AS (10%) and Pandion Energy AS (10%).

MOL Group entered Norway in 2015, through the acquisition of 100 percent ownership of Ithaca Petroleum Norge. The drilling program began in 2018, after the operator achieved readiness in record time without any setbacks in a highly regulated environment.

MOL Group’s exploration portfolio in Norway is aimed at supporting delivery of organic reserve replacement for the Group.

MOL Group looks for top graduates to apply for its GROWWW program

  • Applications are now open until 24 April 2020 at https://molgroupcareers.info/en/students-and-graduates/growww-graduate-programme
  • Growww is MOL Group’s flagship talent acquisition program for fresh graduates interested to kick-start their careers in one of the largest companies in CEE
  • Since 2007, more than 2,100 talented individuals from all around the world joined MOL as part of the program, with the best-in-class retention rate of almost 80% in 2018

Budapest, 4 March 2020 – MOL Group has announced a call for applications for the next edition of its award-winning talent acquisition program, Growww, that offers fresh graduates a unique opportunity to kick-start their career in one of the largest corporations in the CEE region. Through the program MOL aims to develop a new generation of industry experts, providing them with fieldwork experiences to prepare them for business challenges.

Growww opens over 130 positions in the areas of engineering, business, IT as well as social and natural sciences. Candidates with up to one year working experience can apply for positions both at the MOL Group Headquarters in Budapest as well as in MOL’s local subsidiaries in eight countries: Austria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia.

This intensive one-year program offers the opportunity to gain insight into the operations of the MOL Group across all business and functional areas. As well as on-the-job learning and visits to various MOL industrial sites, young professionals will gain industry-specific knowledge through structured business education programs, which also provide an excellent opportunity to network with the company’s top executives and build professional relationships. Each participant is supported by a mentor who provides professional guidance and feedback as well as helping them adapt to a dynamic, multicultural working environment.

“During the last thirteen years thousands of young talents were hired as a Growwwer, and we achieved an outstanding retention rate of more than 80%. For me personally, this continuous popularity of our talent acquisition program is more proof that MOL is one of the most attractive employers in the CEE region. As a global company, we have been providing the opportunity for young talent to shape our company’s future with their fresh and crisp ideas for many years. Now it is a very exciting time to come on board, since the Growwwers can participate in various innovative and sustainable projects.”– said Zdravka Demeter Bubalo, HR Vice President at MOL Group.

Over the last decade the Growww program has gained wide international recognition and became a real industry trademark, with the best-in-class retention rate of more than 80%. At the same time, the female representation among those hired reached 40% last year, well above the Oil & Gas industry average.

For more information about Growww, please visit: https://molgroupcareers.info/en/students-and-graduates/growww-graduate-programme

MOL Group 2019 results: robust EBITDA beat the upgraded guidance

  • Full-year 2019 EBITDA reached USD 2.44bn, above the upgraded guidance, despite most macro drivers turning negative in Q4, but decreasing 9% compared to last year
  • Upstream production increased in Q4 and full-year production reached 111mboepd, exceeding our 110mboepd guidance level for 2019; EBITDA was 17% lower than in 2018, primarily due to the weaker external price environment
  • Downstream CCS EBITDA decreased by 13% to USD 866mn, reflecting lower refining and petchem margins
  • Consumer Services EBITDA rose by 30% in local currency terms and by 24% in USD in Q4 2019, and increased 18% in 2019
  • Assuming 6 months contribution from the ACG assets in Azerbaijan, MOL Group expects to generate around USD 2.5bn Clean CCS EBITDA in 2020

Budapest, 21 February 2020 – Today, MOL Group announced its financial results for 2019. Despite the much challenging and volatile external environment at the end of the year, MOL Group generated USD 598mn Clean CCS EBITDA in Q4, bringing full-year Clean CCS EBITDA to USD 2.44bn, above the recently upgraded guidance. Simplified free cash flow declined compared to 2018 as the company is pushing forward with its strategic transformational projects, but remained positive in 2019 at USD 356mn.

Upstream production increased sequentially in Q4 and remained broadly unchanged in full-year 2019 at 111 mboepd, slightly above the guidance level. Due to the lower oil and gas prices, this volume generated 17% lower EBITDA compared to the 2018 results. Exploration and Production remained the key cash generator of MOL Group, providing a massive, nearly USD 700mn simplified free cash flow in 2019. In Upstream, MOL’s target for 2020 is twofold: to successfully complete the acquisition and to integrate the ACG assets that will add about 20,000 bpd to production; at the same time, the segment will continue to maximise value and cash flow generation of the existing assets through an efficient operation.

Downstream full year 2019 Clean CCS EBITDA dropped by 13% to USD 866mn, fully reflecting the weaker macro environment. In Q4 Clean CCS EBITDA declined to USD 191mn 21% lower compared to the last year’s fourth quarter as both refining and petchem margins were weaker at the end of last year, however refining margins were recovering in January-February 2020. Motor fuel demand growth remained very strong in the region in 2019, meaning a 3.4% increase that supported the Downstream segment.

The polyol project is on schedule and on budget; major construction site works boosted up in 2019 and the overall project completion is now at around 50%.

A final investment decision was made for the Rijeka Refinery Residue Upgrade project, aiming at turning INA’s Downstream into a sustainable and profitable business. The project includes the construction of a delayed coker with an expected commissioning in 2023.

Consumer Services was the “star performer” in 2019, EBITDA of the segment increased by 30% in Q4 2019 year-on-year in local currency terms (24% in USD), capped another strong year with double-digit earnings growth. The segment achieved several important milestones, including the non-fuel margin generation reaching 30% of the total margin by the end of the year. Accelerated non-fuel concept rollout continued: the number of reconstructed sites with Fresh Corners rose to 877 from 687 a year ago.

The Gas Midstream segment reached USD 71mn EBITDA in Q4, 48% higher than a year ago, as capacity demand rose significantly due to the uncertainty of Russia-Ukraine transit agreement. Operating expenses declined by more than 10% as fuel gas consumption and network loss decreased and so did the price of natural gas.  

Chairman-CEO Zsolt Hernádi commented the results:

“We delivered robust financial results in 2019, even slightly ahead of our upgraded EBITDA guidance despite a weaker external environment.

We also achieved important milestones along our 2030 transformation journey. We agreed to acquire major upstream assets in Azerbaijan, we have reached 50% completion at our flagship polyol project, while our Consumer Services business had another record-breaking year.

With our strong foundations and despite increasing global uncertainties, we look into 2020 with optimism. With the help of the new assets, we expect to grow our EBITDA to around USD 2.5bn, based on our mid-term base macro framework with a Brent crude price of around USD 60/bbl and assuming a more conservative petchem outlook. This shall again provide us enough cash flow to cover our investments into our strategic projects.” 

 

About MOL Group

MOL Group is an integrated, international oil and gas company, headquartered in Budapest, Hungary. It is active in over 40 countries with a dynamic international workforce of 25,000 people and a track record of more than 100 years in the industry. MOL’s exploration and production activities are supported by more than 75 years’ experience in the hydrocarbon field. At the moment, there are production activities in 8 countries and exploration assets in 13 countries. MOL Group operates four refineries and two petrochemicals plants under integrated supply chain management in Hungary, Slovakia and Croatia, and owns a network of 2,000 service stations across 10 countries in Central & South Eastern Europe.

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MOL Group upgrades 2019 guidance after robust Q3 results

  • Full-year 2019 EBITDA guidance raised while capex guidance is unchanged
  • Simplified free cash flow remained positive both in Q3 and year to date, despite organic capex nearly doubling year on year as the company pushes forward with strategic transformational projects
  • Consumer Services EBITDA rose by 15% in local currency terms and by 10% in USD

Budapest, 31 October 2019 – Today, MOL Group announced its financial results for the third quarter of 2019. Despite a weaker macro environment and much lower oil and gas prices, strong Q3 EBITDA allows MOL Group to raise 2019 full year guidance to „around USD 2.4 bn” from „around USD 2.3 bn.

Upstream EBITDA declined to USD 235mn in Q3, reflecting lower oil and significantly lower gas prices. The volume of hydrocarbon production slightly decreased by 1 % year-on-year in Q3 and stood at 107,500 barrels of oil equivalent per day (boepd), but year to date production of 112 thousand boepd remains above the full-year guidance.

Downstream segment’s Clean CCS EBITDA improved by 4 % to 272mn USD in the third quarter, as refinery margins rebounded from the H1 decrease. Motor fuel demand continued to expand by 3% in the relevant CEE region and supported the downstrem results. MOL’s biggest ever organic investment, polyol plant construction site works boosted up in Q3 and progresses as scheduled.

Consumer Services reached new all-time high quarterly result at USD 161mn, up by 10% year-on-year.  MOL’s flagship Fresh Corner branded non-fuel concept rollout dynamically continues across the network, the number of reconstructed sites with Fresh Corners rose to 794 from 615 a year ago.

The Gas Midstream segment reached USD 27mn EBITDA in Q3, 8% higher than a year ago.

Chairman-CEO Zsolt Hernádi commented the results: “The strong financial delivery of our resilient, integrated business model in the first 9 months allows us to upgrade our full-year 2019 Clean CCS EBITDA guidance to around USD 2.4bn (from around USD 2.3bn). We also continue to generate positive simplified free cash flow, thus fully funding even the nearly doubling organic investments, as we push forward with our strategic transformational projects. The flagship polyol plant remains on track and on schedule, with major construction site works boosted up in Q3 and overall completion now exceeding 35%.”

MOL Slovenija amongst the best business entities in Slovenia

MOL Slovenia has reached the highest credit assessment rate of excellency AAA for the third time in a row. Therefore, it now also qualifies as a company with the Golden Creditworthiness.

Bisnode analysis company is the biggest partnership company of the Dun & Bradstreet rating Company. In the context of an international project, it focuses on the financial analysis of companies and it has a long tradition of granting certificates of excellency in 19 European countries, amongst which Slovenia can also be found. Excellency rating represents the above average value of economic entities. It is based on company accounts of the entities which are being presented for the past year, but they also predict the operation in the next 12 months. The excellency rating is given only to the best companies with the key differential advantage in operating.

According to the 2018 analysis, MOL SLOVENIA is amongst 9,6% of the best Slovene companies and it therefore classifies as a AAA rated company. Only 12.214 companies (6,9%) of the 176.466 registered in 2018 in Slovenia have accomplished the Golden Creditworthiness. This year, for the fifth time ever, Bisnode has extracted the companies with the Golden Creditworthiness – this kind of the highest assessment is given only to the companies, which have reached the highest credit assessment rate (AAA) for the third time in a row.

The Golden Creditworthiness is an assessment of a company through a longer period, based on several criteria. The integral part of the assessment is the company’s solvency, creditworthiness, overall indebtedness, profitability and other risk criteria. The company awarded with the Golden Creditworthiness represents the most reliable and credible type of low risk company to cooperate with, for all types of partners: suppliers, buyers, insurances, banks and other business partners.

“To be a reliable partner to our suppliers, buyers and other business partners, is one of the fundamental guidelines of our financial management. I am proud our effort has been awarded for the third time in a row with the AAA class certificate and we have also received the Golden Creditworthiness.” - says mag. Jasmina Gregorn, financial director at MOL Slovenia. 

 

MOL Group Looks For Top Graduates To Apply For Its Growww 2019 Program

Today, MOL Group announced a call for applications for the next edition of its award-winning talent acquisition program, Growww 2019, which offers fresh graduates a unique opportunity to kick-start their career in one of the largest corporations in Central Eastern Europe. Through the program MOL aims to develop a new generation of industry experts, offering them an opportunity to learn and solve real-life business challenges while working in one of the most complex industries.

MOL Group opens over 140 positions in the areas of engineering, business, IT as well as social and natural sciences. Candidates with up to one year working experience can apply for positions both at the Headquarters in Budapest and in MOL Group’s local subsidiaries in ten countries: Austria, Croatia, Czech Republic, Hungary, Italy, Norway, Poland, Romania, Slovakia and Slovenia.

This intensive one-year program offers a possibility to gain insight into the operations of MOL Group across all business and functional areas. On top of the on-the-job learning and visits to various MOL’s industrial sites, young professionals have a possibility to gain industry-specific knowledge through structured business education program, which is also an excellent opportunity to network with company’s top executives and make professional relationships. Each participant is supported by a mentor who provides professional guidance and feedback as well as helps adapt to a dynamic, multicultural working environment.

“Since the 2007 launch of the Growww program, we are receiving year on year over six thousand applications; we hired over two thousand Growwwers, at the same time maintaining a strong, 80% retention rate. For me personally, this continuous popularity of our flagship talent acquisition program is another proof that MOL is one of the most attractive employers in the CEE region. As a global company, we give young people the freedom to think big and the capability to bring these ideas to life. Since we embarked on our strategic business transformation, I believe that nurturing this innovative spirit is more important than ever to future-proof our company for the years to come.” – said Zdravka Demeter Bubalo, HR Vice President at MOL Group.

Over the last decade the Growww program has gained wide international recognition and became a real industry trademark, with the best-in-class retention rate of almost 80%. At the same time, the female representation among those hired reached 40% last year, well above the Oil & Gas industry average.

For more information about Growww 2019, please visit: molgroup.info/growww

MOL and Total joined forces to extend their fuel cards acceptance network in Europe

MOL and Total signed an agreement which will make travelling across Europe easier for their corporate customers. The agreement provides for acceptance of MOL Group Cards by Total in its network of stations in France, Belgium, Luxembourg, The Netherlands and Germany. At the same time, the Total fuel cards will be accepted in the MOL’s and Slovnaft’s network of stations in Hungary, Romania, Slovenia and Slovakia.

As a first step, starting from February 2019, Total fuel cards are accepted in MOL’s network in Hungary and Romania. MOL Group Cards’ owners are able to benefit in return from the acceptance of their cards in Total network in France, Belgium, Luxembourg, The Netherlands and Germany. The roll-out of Total card acceptance to MOL Slovenia and Slovnaft’s network in Slovakia will be finalized over the next months.

As a result of this agreement, MOL Group Cards will be accepted in nearly 7,000 stations in Europe. At the same time, the Total card will be accepted in more than 17,000 points of sales.

“Opening the possibility to use our fuel cards in Western Europe is an important milestone, which will not only help us grow our business, but will also contribute to one of the key objectives of MOL Group 2030 strategy: to become the first choice of our customers.” - commented Zsolt Pethő, Group Downstream Commerce & Optimization Senior Vice President at MOL Group.

 “This agreement strengthens our position in Eastern Europe and completes perfectly our offer. It represents yet another step towards consolidating our strong position on the fuel cards in Europe. Finally, it contributes to one of the Total’s key objectives: to support our customers in their energy choices and to be the partner of their mobility.” - declares Benoît Luc, Total Marketing & Services, Senior Vice President for Europe.

MOL Group announced winners of the 12th edition of MOL Group’s Freshhh competition

Last week, MOL Group held in Hungary Live Final of the 12th edition of the Freshhh competition, its flagship award-winning student contest. Its popularity demonstrates that MOL is considered an attractive employer among the youngest, largely digital generation, and is able to offer compelling career paths also outside the core Oil & Gas industry. The best six international teams - from Croatia, France, the Netherlands and Poland – competed for final prizes, with the French “Road to Buda” and the Dutch “Snelle Planga” teams coming out on top after a challenging battle.

Freshhh is an international online student competition, where participants take charge of managing an integrated oil corporation. Throughout the game, teams consisting of three members have to make day-to-day decisions on oil and gas field development projects, the construction of a refinery, retail network development as well as defining the best product portfolio.

The latest edition attracted applicants from over 70 countries around the world. In total, more than 1,000 teams applied to participate in the Freshhh 2018 competition, which proves that it has truly become a trademark in the industry on the international level. Two rounds of the virtual game were followed by the Live Final, where the participants had an opportunity to assess key pillars of MOL Group 2030 strategy, outlining solutions to potential challenges in each business segment and presenting their ideas on how to attract young talents to the oil & gas industry. Finally, the student teams participated in a challenging debate, which was an opportunity to demonstrate their teamwork, negotiation and public speaking skills.

All teams showed excellent performance, but according to the jury comprising of top MOL managers the French “Road to Buda” and the Dutch “Snelle Planga” teams proved to be the best. The third place went to the French “The Oil’believable” team and a special award to the Croatian “Godot” team. The top three teams won prizes of a total of 25,000 EUR.

“Popularity of the latest edition of Freshhh competition proves once again that MOL grasped the fundamentals of engaging digital natives. I am pleased to see that thanks to our talent acquisition programs young people see MOL as a vibrant and rewarding workplace, which can offer impactful career paths. We continuously rethink and reinvent our programs to stay attractive for new generations, whose fresh and innovative energy is essential for the implementation of our transformational strategy, MOL 2030.” - said Zdravka Demeter Bubalo, HR Vice President of MOL Group.

Since 2007, MOL hired over 120 participants of the Freshhh competition, with many of them being promoted to high-level expert and managerial roles.

Last year’s winners joined MOL as Junior Engineers as part of the so-called Engineer Academy program, and currently work on MOL’s flagship chemical investment. Emánuel Kovács, who was part of the team, commented: “After we won the Freshhh competition, things happened very fast. Last year, our whole team joined MOL as part of the so-called Engineer Academy and we started to work on the company’s largest investment. The Polyol Project is one of the cornerstones of MOL’s petrochemical expansion, the key pillar of MOL 2030 strategy, so it’s really exciting to be involved hands-on in the company’s transformation.”

 

Read more about Freshhh and Growww.

Welcome to Kranj where new MOL service station is awaiting you

On Thursday, 20/9/2018, in Kranj, MOL Slovenija opened its 47th MOL service station in Slovenia and first one in Gorenjska region.

Service station in Kranj is an important milestone for the company and it is in line with company´s strategy to expand the retail network in regions where MOL was not presented so far. Beside Fresh Corner with its rich offer for customers and nice atmosphere, MOL SeS Kranj offers its customers quality EVO fuels, car wash, LPG and fast EV charger.

New MOL service station welcomed its first guests with official opening ceremony hosted by Valerija Glavač, MOL Slovenija CEO. Guests had been welcomed as well by the major deputy of Kranj Municipality. The event was prepared with a thought on local community.  As a social responsible company which appreciates the meaning of local organizations for the development of local communities, MOL Slovenija provided donation to Fire fighters organization. Beside firefighters, donations had provided as well to the Kranj kindergarten and music school, which enriched the opening ceremony and delight the visitors with their singing, dancing and playing the traditional Slovenian folk music.

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