MGYOY Mol Magyar Olay Es Gazipari Rt (PK)

By Margit Feher

BUDAPEST--Hungarian integrated oil-and-gas company MOL Nyrt. (MGYOY, MOL.BU) raised Friday its full-year profitability guidance on the back of its third-quarter earnings, which beat analysts' forecasts despite a sharp decline on the year.

Clean earnings before interest, tax, depreciation and amortization, a major indicator of profitability in the oil industry that investors watch closely, was 165 billion forints (about $592.7 million) for the period, down by a sharp 19% from a year earlier. MOL's earnings took a hit from a decline in refining and petrochemicals margins, and planned maintenance, which strong retail Ebitda could only partly offset, the company said.

Still, clean Ebitda beat analysts' expectations of HUF156.8 billion for the July-September quarter, according to a poll of nine independent analysts conducted by the company. Clean earnings don't include the revaluation of inventories and one-off items.

As a result of its third-quarter performance, MOL, Hungary's largest firm by revenue, raised its full-year clean Ebitda guidance to around $2.2 billion from over $2 billion earlier. Clean Ebitda already totaled $1.68 billion in the first nine months of the year.

Downstream--or refining and marketing--clean Ebitda was HUF114.9 billion, down 25% from a record-high quarterly result a year earlier. The decline was partly the result of scheduled maintenance both at a refinery and a petrochemicals plant, the company said. Clean Ebitda was higher than analysts' forecast for HUF111.0 billion.

As for the outlook, motor fuel demand remains high in central Europe and robust economic growth in the region is expected to keep boosting the downstream segment, MOL said.

The clean Ebitda of the upstream--or exploration and production--segment was HUF48.3 billion, up 12% from a year earlier, delivering its first Ebitda growth since 2011. It was also higher than analysts' expectation for HUF46.4 billion. Oil and gas production was 107,000 barrels of oil equivalent a day in the third quarter, up 6% on the year.

In the third quarter, the company generated a net profit of HUF68.8 billion, down by a sharp 24% from HUF90.7 billion a year earlier. Still, that was also higher than analysts' expectation for HUF60.3 billion. It translated into earnings of HUF759.2 a share, down from HUF966 a share a year before.

Write to Margit Feher at margit.feher@wsj.com

(END) Dow Jones Newswires

November 03, 2016 20:42 ET (00:42 GMT)

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