MOL Group Reports 2024 Financial Results Amidst Industry Challenges
CEO Zsolt Hernádi notes significant market pressures while announcing key developments and ongoing projects.
MOL Group has released its comprehensive financial results for 2024 and the fourth quarter, highlighting a 23% decline in pre-tax earnings as the industry continues to normalize.
The report opens with commentary from CEO Zsolt Hernádi, who expresses concern over the ongoing challenges faced by Europe, especially in light of the Ukraine-Russia conflict.
Hernádi noted that this geopolitical situation has presented significant hurdles in ensuring supply security across the company's operating countries.
Additionally, ongoing regulatory challenges and government levies continue to impact the business environment.
Despite these adversities, Hernádi stated the company has maintained stable operations and expressed pride in their performance amidst external limitations.
He emphasized that, although growth opportunities were constrained last year, MOL Group proceeded with portfolio expansion, achieved progress on strategic investments, and took significant steps to enhance supply security in the region.
In detail, he outlined several key developments:
- Continued the oil diversification project and inaugurated the largest green hydrogen facility in the region, along with a €1.3 billion polyol complex in Tiszaújváros.
Steps were also made towards increasing their own renewable electricity generation.
- Progressed on solar energy capacity development in Hungary.
- Strengthened the international network of its Upstream division through collaborative agreements.
- Achieved a record production level in Vecsés with a new discovery.
Hernádi acknowledged that the performance of consumer services indicates the success of shifting towards a more retail-oriented business model.
He projected ongoing uncertainty in the oil sector, underscoring its potential impact on corporate competitiveness in Europe.
"Supply security is still a priority for all industry players.
Without diversified energy procurement, affordable energy, and a robust industry, Europe may find itself in increasingly difficult circumstances," he stated.
In the fourth quarter, MOL Group's consolidated EBITDA was nearly HUF 260 billion, with the full year reaching HUF 1,122 billion.
The quarterly EBITDA fell short of analyst expectations and decreased from previous performance levels, including the annual comparison from 2023's base period, which was HUF 354.2 billion.
Operating income saw a significant decline to HUF 61 billion in the last three months, while the forecast was double that figure.
The financial results took a surprising turn with an unexpected loss of HUF 40 billion, leading to a net profit loss of HUF 8.5 billion in the final quarter, against an anticipated quarterly profit of HUF 67 billion.
Despite the poor performance in the last quarter, the management team achieved a target of $3 billion in adjusted EBITDA, ultimately reporting $3.07 billion for the year.
The total net profit for the year was HUF 364.2 billion, which reflects a 31% decrease compared to the previous year's figure of HUF 530 billion and a 20% shortfall from analyst forecasts.
In terms of segment performance, the Upstream division continued to significantly contribute to the group's results, supported by both price conditions and production volumes.
The Upstream sector was the most profitable business segment for MOL in the fourth quarter, despite a 7% decrease in oil prices relative to the previous quarter.
The Downstream segment (refining and trading) experienced a slight decline primarily due to the continuous downward trend in refining margins and significant shutdowns during the first nine months of the year.
However, there was robust volume growth in the fourth quarter, even though lower refining margins adversely affected EBITDA.
Despite a decrease in fuel market demand in key markets like Hungary and Croatia, total fuel product sales rose by 5% year-on-year.
The performance of the Consumer Services segment benefited from the expansion of non-fuel products, with organic growth continuing despite a decrease in the number of filling stations.
The number of Fresh Corner stores increased to 1,329 by the end of 2024, marking a 3% rise from the previous quarter and a 6% increase year-over-year.
The Circular Economy Services, responsible for waste management under MOL Group, remained EBITDA-negative in 2024, primarily due to high operational costs associated with the mandatory deposit return scheme (DRS).
The DRS continued to escalate in the fourth quarter, with approximately 6 million drink containers collected daily.
The Gas Midstream segment's performance remained stable compared to the previous year, supported by higher transportation activity, though price impacts had a negative effect.
The management has set a guideline for a pre-tax profit of around $1.6 billion for 2025.
The report opens with commentary from CEO Zsolt Hernádi, who expresses concern over the ongoing challenges faced by Europe, especially in light of the Ukraine-Russia conflict.
Hernádi noted that this geopolitical situation has presented significant hurdles in ensuring supply security across the company's operating countries.
Additionally, ongoing regulatory challenges and government levies continue to impact the business environment.
Despite these adversities, Hernádi stated the company has maintained stable operations and expressed pride in their performance amidst external limitations.
He emphasized that, although growth opportunities were constrained last year, MOL Group proceeded with portfolio expansion, achieved progress on strategic investments, and took significant steps to enhance supply security in the region.
In detail, he outlined several key developments:
- Continued the oil diversification project and inaugurated the largest green hydrogen facility in the region, along with a €1.3 billion polyol complex in Tiszaújváros.
Steps were also made towards increasing their own renewable electricity generation.
- Progressed on solar energy capacity development in Hungary.
- Strengthened the international network of its Upstream division through collaborative agreements.
- Achieved a record production level in Vecsés with a new discovery.
Hernádi acknowledged that the performance of consumer services indicates the success of shifting towards a more retail-oriented business model.
He projected ongoing uncertainty in the oil sector, underscoring its potential impact on corporate competitiveness in Europe.
"Supply security is still a priority for all industry players.
Without diversified energy procurement, affordable energy, and a robust industry, Europe may find itself in increasingly difficult circumstances," he stated.
In the fourth quarter, MOL Group's consolidated EBITDA was nearly HUF 260 billion, with the full year reaching HUF 1,122 billion.
The quarterly EBITDA fell short of analyst expectations and decreased from previous performance levels, including the annual comparison from 2023's base period, which was HUF 354.2 billion.
Operating income saw a significant decline to HUF 61 billion in the last three months, while the forecast was double that figure.
The financial results took a surprising turn with an unexpected loss of HUF 40 billion, leading to a net profit loss of HUF 8.5 billion in the final quarter, against an anticipated quarterly profit of HUF 67 billion.
Despite the poor performance in the last quarter, the management team achieved a target of $3 billion in adjusted EBITDA, ultimately reporting $3.07 billion for the year.
The total net profit for the year was HUF 364.2 billion, which reflects a 31% decrease compared to the previous year's figure of HUF 530 billion and a 20% shortfall from analyst forecasts.
In terms of segment performance, the Upstream division continued to significantly contribute to the group's results, supported by both price conditions and production volumes.
The Upstream sector was the most profitable business segment for MOL in the fourth quarter, despite a 7% decrease in oil prices relative to the previous quarter.
The Downstream segment (refining and trading) experienced a slight decline primarily due to the continuous downward trend in refining margins and significant shutdowns during the first nine months of the year.
However, there was robust volume growth in the fourth quarter, even though lower refining margins adversely affected EBITDA.
Despite a decrease in fuel market demand in key markets like Hungary and Croatia, total fuel product sales rose by 5% year-on-year.
The performance of the Consumer Services segment benefited from the expansion of non-fuel products, with organic growth continuing despite a decrease in the number of filling stations.
The number of Fresh Corner stores increased to 1,329 by the end of 2024, marking a 3% rise from the previous quarter and a 6% increase year-over-year.
The Circular Economy Services, responsible for waste management under MOL Group, remained EBITDA-negative in 2024, primarily due to high operational costs associated with the mandatory deposit return scheme (DRS).
The DRS continued to escalate in the fourth quarter, with approximately 6 million drink containers collected daily.
The Gas Midstream segment's performance remained stable compared to the previous year, supported by higher transportation activity, though price impacts had a negative effect.
The management has set a guideline for a pre-tax profit of around $1.6 billion for 2025.
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