Bulletproof florint boosts MOL

Hungarian oil and gas company MOL more than quadrupled its net income in the second quarter largely due to foreign exchange gains on its debts and strong downstream and upstream performance.

MOL said yesterday that its reported net income was 114.7 billion forints ($729.1 million) for the quarter, 326% higher than a profit of 26.9 billion forints reported in the second quarter of 2007. It came in above analysts' forecast for a net profit of 107.65 billion forints in a Reuter's poll last week. MOL's operating profit dropped 3% to 89.1 billion forints from a revised 91.5 billion forints, but also topped analysts' expectations for 83.15 billion forints. "Both upstream and downstream businesses reported strong growth in operating profits, while the petrochemical segment suffered from extremely weak integrated petrochemical margins," MOL said in a statement. MOL posted a net financial gain of 37.55 billion forints in the second quarter compared with a loss of 34.8 billion forints a year ago as it had large unrealised foreign exchange gains on its foreign currency denominated debts due to the forint's appreciation versus the euro and the dollar. Exploration and production operating profit rose 30% year-on-year to 30.6 billion forints due to high crude prices, despite a weak dollar and lower production volumes. Refining and marketing operating profit rose by 18% to 69 billion forints due to sales volumes and a rise in diesel crack spreads, which worked in MOL's favour as MOL's product slate is geared towards diesel. MOL, which has a 25% stake in Croatia's INA , has said it would bid for INA shares not held by the Croatian government and is expected to give details of its bid by 14 August.
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