MOL Group 2020 results: solid performance in a very challenging year

• Full-year 2020 EBITDA reached USD 2.05bn, above the latest, post-COVID guidance (of around USD 1.9bn), but decreased by 16% compared to last year, affected by the pandemic and economic crisis
• Clean CCS EBITDA came in at USD 464mn in Q4 2020, 23% lower year-on-year reflecting the weaker oil macro
• Upstream production volume increased by 8% in 2020 to 120 mboepd thanks to the contribution of ACG, yet EBITDA decreased by 34% year-on year due to the extremely weak external price environment
• Downstream Clean CCS EBITDA decreased in Q4 to USD 133mn, hit by depressed refinery margins and the usual Q4 seasonality. Full-year result was 15% lower than a year ago.
• Consumer Services EBITDA rose by 23% in Q4 2020 to USD 128mn, the segment generated an all-time high USD 510mn EBITDA in full year 2020, 8% higher than in 2019
• 2021 EBITDA guidance at around USD 2.3bn as some macro recovery expected

Budapest, 19 February 2021 – Today, MOL Group announced its financial results for 2020. Despite the much challenging pandemic and economic crisis, MOL Group generated USD 464mn Clean CCS EBITDA in Q4, bringing full-year Clean CCS EBITDA to USD 2.05bn, above the updated guidance. In a year of disruption, volatility and uncertainty, all segments generated positive simplified free cash flow that resulted in USD 636mn in 2020, higher than a year ago. Organic capex was at USD 1.41bn in 2020, in line with the guidance (up to USD 1.5bn). MOL expects 2021 EBITDA at around USD 2.3bn as macro likely recovers.

Chairman-CEO Zsolt Hernádi commented the results:

“We delivered over USD 2bn EBITDA in 2020, and while earnings were lower compared to 2019, our fast and timely reaction to the crisis allowed us to generate even stronger free cash flow than our pre-Covid guidance. This was only possible with each and every business line having cash positive operations even in a year of major disruption.

2020 was an unprecedented year with never seen challenges. I am very proud of all our colleagues, as our operations were running uninterrupted even amidst the biggest crisis, we continued to be a reliable partner of all our customers and partners and we were able to continue all our strategic investments, although unfortunately they slowed down a bit due to the mobility restrictions. Even under major stress we are not losing sight of our vision and we will be doubling our efforts in 2021 to progress with our business transformation.

We expect 2021 to be a year with some normalization and recovery, which is also behind our rising EBITDA guidance of USD 2.3bn. Our capital investments also need to catch up, so our organic capex shall be at around USD 1.7-1.9bn, once again implying a fully funded business with positive free cash flow.”

Upstream EBITDA declined in Q4 to USD 181mn, affected by technical adjustments related to ACG, MOL’s new asset in Azerbaijan. The quarter brought the segment’s full-year EBITDA to USD 689mn that is 34% lower than a year ago, as sharply lower oil and gas prices were only partly offset by the contribution of ACG that helped full-year production volumes to rise by 8% compared to last year. Proved and probable reserves increased to 364 mboepd by the end of 2020 (from 270 mboepd end-2019), reflecting the ACG contribution and net upward reserve revision in the portfolio, implying 312% reserve replacement.

Downstream full year 2020 Clean CCS EBITDA dropped by 15% to USD 740mn, reflecting the weak macro environment, while Q4 result came in at USD 133mn, hit by depressed refinery margins and the usual Q4 seasonality. Refined products sales volumes dropped by 14% compared to last year’s Q4 result, affected by the second wave of the pandemic. The polyol project exceeded 75% overall completion at the end of Q4. Due to the pandemic, MOL together with the engineering, procurement and construction contractor estimates that the project completion will be shifting to the second half of 2022 (originally in H2 2021) and as a result of the delay the total capital expenditure may increase to around EUR 1.3bn (originally EUR 1.2bn).

Consumer Services EBITDA growth accelerated in Q4 to +23% and EBITDA rose to USD 128mn compared to last year, mostly driven by higher fuel contribution and lower operating expenses. The segment generated an all-time high USD 510mn EBITDA in full-year 2020 that is 8% higher than the result in 2019.  Simplified free cash flow more than doubled in Q4 and jumped by 28% in 2020 year-on year to USD 381mn. The non-fuel concept rollout continued despite the pandemic: the number of reconstructed sites with Fresh Corners rose to 955 from 877 at the end of 2019.

The Gas Midstream segment reached USD 201mn EBITDA in 2020, 8% higher than a year ago. In Q4, EBITDA fell by 41% year-on year to USD 42mn, as a result of materially lower cross-border capacity bookings and hence lower regulated revenues, decreasing transit revenues and higher operating expenses.

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 9 countries and exploration assets in 14 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 almost 2,000 service stations across 10 countries in Central & South Eastern Europe.

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