Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Q1 2022 Earnings Presentation
42 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, May 6, 2022
Slide 1: First Quarter 2022 Results
FIRST QUARTER 2022 RESULTS 6 MAY 2022
Slide 2: Disclaimer
DISCLAIMER "THIS PRESENTATION AND THE ASSOCIATED SLIDES AND DISCUSSION CONTAIN FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NATURALLY SUBJECT TO UNCERTAINTY AND CHANGES IN CIRCUMSTANCES. THOSE FORWARD-LOOKING STATEMENTS MAY INCLUDE, BUT ARE NOT LIMITED TO, THOSE REGARDING CAPITAL EMPLOYED, CAPIT
Slide 3: Agenda
AGENDA 1 HIGHLIGHTS OF THE QUARTER 4 2 KEY GROUP QUARTERLY FINANCIALS 9 3 DOWNSTREAM QUARTERLY RESULTS 16 4 CONSUMER SERVICES QUARTERLY RESULTS 21 5 UPSTREAM QUARTERLY RESULTS 25 6 SUPPORTING SLIDES 31 3
Slide 4: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER
Slide 5: Q1 2022: Strong Financial Performance Continues
Q1 2022: STRONG FINANCIAL PERFORMANCE CONTINUES DRIVING SIMPLIFIED FCF DELIVERY HIGHER ABOVE USD 500MN Q1 2021 Q1 2022 2022 RESULTS6 RESULTS6 GUIDANCE5 GROUP CLEAN CCS AROUND 2.8 BN OR EBITDA USD 604 MN USD 833 MN ABOVE GROUP CAPEX USD 280 MN USD 323 MN USD 1.7 – 1.8 BN (ORGANIC) AROUND 1.0 BN OR SI
Slide 6: Favourable Macro Conditions in Place in Q1 2022
FAVOURABLE MACRO CONDITIONS IN PLACE IN Q1 2022 YET ADVERSE DS PRICE REGULATION IS NOT CAPTURED BY THE HEADLINE MARGIN EXTERNAL ENVIRONMENT* VS MOL CLEAN CCS EBITDA (USD MN) 1200 90% 1000 75% 800 60% 600 45% 400 30% 15% 200 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 7: Normalizing Clean CCS EBITDA Compared to Q4 2021 Levels
NORMALIZING CLEAN CCS EBITDA COMPARED TO Q4 2021 LEVELS UPSTREAM CONTRIBUTION REMAINED VERY STRONG FINANCIAL HIGHLIGHTS Clean CCS EBITDA came in at USD 833mn in Q1 2022; following the announcement of the UK portfolio divestment the operation is classified as discontinued operation that generated a f
Slide 8: TRIR Performance Below Tolerable Limit
TRIR PERFORMANCE BELOW TOLERABLE LIMIT IN Q1 2022 EU TAXONOMY REPORT DISCLOSED FOR THE FIRST TIME AFTER FY 2021 TOTAL RECOVERABLE INJURY RATE (TRIR) Tolerable limit for 2022 (1.2) 1.8 1.67 Tolerable limit for 2021 (1.3) Group-level TRIR performance is below the tolerable limit of 1.2 in 2022 1.6 1.4
Slide 9: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 10: Diminishing DS Contribution Partly Off-set by Rising E&P QoQ
DIMINISHING DS CONTRIBUTION PARTLY OFF-SET BY RISING E&P QOQ EX-UK CLEAN CCS EBITDA REACHED USD 833MN IN Q1 2022 SEGMENT CLEAN CCS EBITDA* (USD mn) COMMENTS +38% -6% Upstream 953 889 Q1 2022 EBITDA grew further both YoY and QoQ on the back of rising oil 833 and gas prices 838 Following the UK portfo
Slide 11: Organic Spending Reached USD 323mn
ORGANIC SPENDING REACHED USD 323MN IN Q1 2022 REPRESENTING A 15% INCREASE YOY TOTAL GROUP CAPEX* (USD mn) TOTAL GROUP CAPEX* (USD mn) +12% 568 568 490 29 29 1 490 108 359 354 360 10 1 331 354 331 296 447 8 296 8 16 16 239 430 84 88 299 286 224 200 67 157 132 19 15 107 2 23 80 92 100 37 8 58 59 51 68
Slide 12: MOL Generated USD 510mn Simplified FCF
MOL GENERATED USD 510MN SIMPLIFIED FCF IN Q1 2022 WITH ALL SEGMENTS CONTRIBUTING THEIR FAIR SHARE TO SIMPLIFIED FCF SIMPLIFIED FCF* (USD mn) COMMENTS +58% +46% 600 510 Group-level simplified FCF (Clean CCS EBITDA less organic capex) rose significantly to USD 510mn in Q1 2022 349 488 Upstream 324 Ups
Slide 13: Net Income Reached USD 423mn
NET INCOME REACHED USD 423MN GENERATING HUF 209 EARNINGS PER SHARE IN Q1 2022 Q1 2022 EARNINGS* (USD mn) – BELOW THE EBITDA LINE ITEMS Cash tax: USD 157mn Deferred tax: USD 31mn Total Clean CCS EBITDA 944 Discontinued Operation (UK) 111 62 0 Other Total Profit for 64 11 199 Consumer Services the per
Slide 14: Operating Cash Flow Ex-Working Capital at USD 1.19bn in Q1
OPERATING CASH FLOW EX-WORKING CAPITAL AT USD 1.19BN IN Q1 FULLY OFFSET BY MACRO DRIVEN WORKING CAPITAL BUILD OPERATING CASH FLOW FOR TOTAL OPERATION IN Q1 2022 (USD mn) 1,194 217 43 870 149 Discontinued 168 Operation (UK) 1,202 Continuing operation) 702 328 -8 Profit Before Tax DD&A Income tax paid
Slide 15: Net Debt to EBITDA Remains in the Comfort Zone
NET DEBT TO EBITDA REMAINS IN THE COMFORT ZONE AS SIZEABLE WORKING CAPITAL BUILD OFFSET STRONG OPERATING CF NET DEBT TO EBITDA* (x) GEARING* (%) 2.0 30 27 25 25 1.61 25 1.5 1.38 21 1.31 20 19 20 19 18 17 16 0.97 1.0 15 0.79 0.82 12 0.74 0.65 0.65 0.69 10 0.5 0.41 5 0 2012 2013 2014 2015 2016 2017 20
Slide 16: Downstream Q1 2022 Results
DOWNSTREAM Q1 2022 RESULTS
Slide 17: Stable Downstream Clean CCS EBITDA YoY
STABLE DOWNSTREAM CLEAN CCS EBITDA IN Q1 2022 YOY SURGING REFINING MARGINS, PRICE REGULATION, DEMAND UPLIFT PLAYED A SIGNIFICANT ROLE IN R&M QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL PRODUCT SALES (kt) Petchem R&M Total petrochemicals products 3rd party sales Own production 0% -28% 447 436 +11% -7%
Slide 18: Supportive Margin Environment Overall
SUPPORTIVE MARGIN ENVIRONMENT IN Q1 2022 OVERALL MITIGATED BY DIMINISHING PRICE REALIZATION IN LINE WITH PRICE REGULATION REFINING MARGIN1 (USD/bbl) COMMENTS +640% Q1 2022 refining margins - a story of two tales: 13.1 40 14 Total MOL Group refinery margin UPDATED 35.1 January and February margins re
Slide 19: Solid DS Contribution Overall in a Mixed Q1 Environment
SOLID DS CONTRIBUTION OVERALL IN A MIXED Q1 ENVIRONMENT STRONG PETCHEM RUN CONTINUES WITH USD 110MN CLEAN CCS EBITDA GENERATION DOWNSTREAM CLEAN CCS EBITDA YoY, Q1 2022 VS. Q1 2021 (USD mn) COMMENTS 1. Macro drivers captured by the 312 refinery margin: ~+130mn 2. Other impacts: ~-135mn 58 254 254 4
Slide 20: Scaling Up Sustainability and Transformation
SCALING UP SUSTAINABILITY AND TRANSFORMATION SIGNIFICANT STEPS IN VALUE CHAIN EXTENSION AND CIRCULAR ECONOMY INITIATIVES IN LINE WITH SHAPE TOMORROW 2030+ STRATEGY Acquisition of ReMat Zrt Construction of Metathesis plant Production of Green Hydrogen ReMat Zrt. is a Hungarian market Greenfield inves
Slide 21: Consumer Services Q1 2022 Results
CONSUMER SERVICES Q1 2022 RESULTS
Slide 22: Fuel Price Cap Dented EBITDA Generation
FUEL PRICE CAP DENTED EBITDA GENERATION IN Q1 2022 REGULATION IN HUNGARY, CROATIA (AND OTHER CEE) COUNTRIES PLAYED A MAJOR ROLE QUARTERLY EBITDA (USD mn) EBITDA YoY, Q1 2022 VS. Q1 2021 (USD mn) -44% -40% 115 35 10 21 69 5 64 211 164 128 115 116 64 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 EBI
Slide 23: Q1 2022 Fuel Sales Volume Increased by 20%
Q1 2022 FUEL SALES VOLUME INCREASED BY 20% DRIVING A SIMILAR INCREASE IN AVERAGE THROUGHPUT TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE1 (mn litres) 20% 20% 0.79 1 727 0.71 0.70 0.68 0.65 1 473 1 452 1 465 4Y CAGR: 1 330 1 300 +3.9% 1 218 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 20
Slide 24: Non-Fuel Margin Expanded by 8% YoY
NON-FUEL MARGIN EXPANDED BY 8% YOY IN Q1 2022 WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL MARGIN INCREASED ABOVE 35% NON-FUEL MARGIN (USD MN) NON-FUEL MARGIN / SITE (’000 USD) +8% +8% 37.7 34.9 30.6 30.6 28.4 4Y CAGR: +7.4% 96.9 81.1 77.2 68.8 65.1 70.4 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 20
Slide 25: Upstream Q1 2022 Results
UPSTREAM Q1 2022 RESULTS
Slide 26: E&P EBITDA Reached USD 504mn
E&P EBITDA REACHED USD 504MN IN Q1 2022 ON THE BACK OF STRONG MACRO CONDITIONS QUARTERLY EBITDA* (ex-spec) (USD mn) OIL PRICES* 120 +104% +11% 101.4 100 94.5 81.8 93.6 80 73.5 79.7 68.8 63.3 61.1 69.0 64.3 62.7 76.0 504 60 60.2 50.3 57.0 53.3 455 43.0 44.2 325 45.2 49.6 45.2 247 282 40 37.9 40.8 36.
Slide 27: Unit Free Cash Flow Above USD 50/bbl
UNIT FREE CASH FLOW ABOVE 50 USD/BBL IN Q1 2022 QUARTERLY PRICE REALIZATION, EBITDA, FCF *(USD/boe) 120 101 Brent price 100 82 94 Realized HC price*** 80 69 73 80 61 Unit EBITDA 60 63 63 44 53 54 40 45 Unit FCF** 37 40 29 34 52 20 17 41 22 29 19 0 8 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 AN
Slide 28: Higher Oil and Gas Prices Positively Impacted Q1 2022 Results
HIGHER OIL AND GAS PRICES POSITIVELY IMPACTED Q1 2022 RESULTS UPSTREAM EBITDA QoQ, Q1 2022 VS. Q4 2021 (USD mn) COMMENTS 615 Realized hydrocarbon prices increased by more 513 500 504 111 than 12 USD/bbl mostly in line with rising Brent 58 455 447 73 28 4 3 0 4 8 QoQ Negative volume impact mainly cau
Slide 29: Production Remained Around 94 mboepd in Q1 2022
PRODUCTION REMAINED AROUND 94 MBOEPD IN Q1 2022 LARGELY IN LINE WITH (EX-UK) PRODUCTION TARGET PRODUCTION BY COUNTRY* (mboepd) COMMENTS Q1 2022 QoQ (vs. Q4 2021): 102.2 Associates: +0.8 mboepd increase is driven by high seasonal Associated 98.3 gas demand 9.7 94.1 93.5 94.1 93.4 companies* 9.0 2.3 A
Slide 30: UK Portfolio Divestment Impacts Unit Opex Positively
UK PORTFOLIO DIVESTMENT IMPACTS UNIT OPEX POSITIVELY EX-UK GROUP LEVEL OPEX HOVERING AROUND 5 USD/BBL UNIT OPEX (USD/boe) COMMENTS +12% 7.9 Unit opex increased to 5.1 USD/boe (Group for continuing operation) by 8 7.1 7.2 7.3 12% YoY due to increasing operational costs along the supply chain 6.9 7 6.
Slide 31: Supporting Slides
SUPPORTING SLIDES
Slide 32: Working Interest Based Production Remained Slightly Lower QoQ
WORKING INTEREST BASED PRODUCTION REMAINED SLIGHTLY LOWER QOQ IN Q1 2022 QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY* (mboepd) 141.5 135.4 134.0 133.7 132.0 Associated companies* 16.2 15.5 15.4 15.4 16.2 Other 4.7 4.6 4.4 4.1 4.2 KRI 8.0 8.1 7.7 8.4 8.4 Pakistan 7.2 6.8 6.9 6.7 6.5 Azerbaijan 4
Slide 33: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Pakistan EXPLORATION EXPLORATION Komádi-Kelet-10 shallow gas well was successfully tested and completed In TAL block, 3D seismic data interpretation and prospect generation Mezőcsokonya-23 well was drilled and abandoned due to the lack of activities continued
Slide 34: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Kurdistan Region of Iraq United Kingdom MOL signed an agreement with Waldorf Production Limited (“Waldorf”) SHAIKAN production stable at 4.6 mboepd and increased 5% YoY due to covering the sale of its entire Upstream portfolio in the United Kingdom on successful star
Slide 35: Upstream Capex by Region and by Type
UPSTREAM CAPEX BY REGION AND BY TYPE ORGANIC CAPEX BY REGION AND BY TYPE* (USD mn) HUN CRO KRI PAK NOR AZE OTHER Total – Q1 2022 Total – Q1 2021 EXP 3.6 2.2 0.0 3.4 0.0 0.0 0.0 9.2 23.5 DEV 7.7 16.9 3.9 0.5 0.2 37.4 5.0 71.6 58.3 Other 0.8 1.7 0.2 0.1 0.0 0.5 0.0 3.4 6.0 Total – Q1 2022 12.2 20.7 4.
Slide 36: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) ORGANIC CAPEX (USD mn) +1% +40% -79% -91% 48 48 26 42 23 21 34 19 30 23 8 2 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 KEY FINANCIALS (USD mn) COMMENTS EBITDA USD 48mn is similar to prior year Q4 2021
Slide 37: Sustainability Indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE -6% 249.2 5.0 250 5 2.0 1.7 4.0 1.5 1.5 1.5 1.5 200 4 1.5 1.4 150 3 1.0 2.0 2.0 2.0 100 64.1 2 51.1 1.0 0.5 50 1 11.4 4.4 5.6 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2
Slide 38: Macro Indicators
MACRO INDICATORS BRENT (USD/bbl) MOL REFINERY MARGIN* (USD/bbl) HUF/USD (Q avg.) 120 15 350 100 10 300 80 60 5 250 40 MOL Group Complex 20 0 200 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 14 15 15 16
Slide 39: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Q1 2021 YoY Q4 2021 Q1 2022 Income Statement (HUF mn) FY 2021 Restated Ch % 1 744 425 1 933 358 1 082 257 79 Net sales 5 857 323 10 399 4 885 10 759 (55) Other operating income 32 133 1 754 824 1 938 243 1 093 016 77 Total operating income 5 889 456 1 338 934
Slide 40: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 Dec 2021 31 Dec 2021 Balance Sheet (HUF mn) 31 Mar 2022 Ch % Balance Sheet (HUF mn) 31 Mar 2022 Ch % Restated Restated Assets Equity and Liabilities Non-current assets Equity Property, plant and equipment 3 421 592 3 380 744 1 Share capital 78 990 78 1
Slide 41: Consolidated Statement of Cash Flow
CONSOLIDATED STATEMENT OF CASH FLOW Q1 2021 YoY Q4 2021 Q1 2022 Cash Flow (HUF mn) FY 2021 Restated Ch % 151 543 282 110 103 521 173 Profit / (loss) before tax 592 130 Adjustments to reconcile profit before tax to net cash provided by operating activities 150 405 52 857 121 922 (57) Depreciation, de
Slide 42: External Parameters
EXTERNAL PARAMETERS Q1 2021 YoY Q4 2021 Q1 2022 Macro figures (average) Q1 2022 FY 2021 Ch % Restated Ch % 79.8 102.2 61.1 67 Brent dated (USD/bbl) 102.2 70.9 44 77.8 87.6 59.7 47 Ural Blend (USD/bbl)(11) 87.6 68.8 27 (1.6) (12.2) (1.3) 858 Urals-Brent spread (USD/bbl) (12.2) (1.8) 585 97.5 100.2 18