MOL Magyar Olaj (MOL) Q2 2024 earnings summary

Executive summary

• Q2 2024 Clean CCS EBITDA reached $825 million, up 101% YoY and 15% QoQ, driven by strong Downstream and Upstream sales and retail expansion.

• Profit before tax for H1 2024 was $916 million, progressing toward the annual guidance of ~$1.6 billion.

• Q2 2024 results are on track or slightly above the halfway mark for annual guidance, with stable macro demand and higher fuel consumption supporting consumer services and fuel wholesale.

• Downstream faced planned turnarounds, constraining production, but sales remained at planned levels; upstream maintained or increased production despite external challenges.

• Management reconfirmed 2024 guidance but noted increasing downside risks, including margin decreases in downstream and external sanctions.

Financial highlights

• Q2 2024 CCS EBITDA reached $825 million, 60% higher sequentially and doubled YoY; profit before tax was $534 million for Q2 and $916 million for H1.

• Year-to-date operating cash flow after working capital was $790 million; H1 2024 operating cash flow before working capital was close to $1 billion.

• Downstream Q2 EBITDA exceeded $400 million; upstream production surpassed 90,000 boe/d.

• Consumer services Q2 EBITDA was $194 million, up 11% YoY, with non-fuel margin growth over 20%.

• Circular economy EBITDA was -$10 million due to conservative accruals and plant maintenance.

Outlook and guidance

• 2024 guidance is reiterated: Group Clean CCS EBITDA expected at ~$3.0 billion, profit before tax at ~$1.6 billion, and organic CapEx at ~$1.7 billion.

• Upstream production guidance of 90,000 boe/d maintained, with no major maintenance planned for H2.

• Management highlights downside risks from declining downstream margins, further turnarounds, and regulatory changes.

• Polyol complex ramp-up expected to impact downstream results in 2025.

• Net debt/EBITDA expected to remain below 1.0x for the year.