43 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, Nov 10, 2023
Slide 1: Third Quarter 2023 Results
THIRD QUARTER 2023 RESULTS 10 NOVEMBER 2023
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, CAPI
Slide 3: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER
Slide 4: Clean CCS EBITDA expected approximately USD 2.8 bn in FY 2023
CLEAN CCS EBITDA EXPECTED APPROXIMATELY USD 2.8 BN IN FY 2023 ALL OTHER ANNUAL GUIDANCE REITERATED 2022 Q1-Q3 2023 2023 RESULTS RESULTS GUIDANCE MODIFIED GROUP CLEAN CCS ~USD 2.8 BN USD 4.7 BN USD 2.1 BN EBITDA OIL & GAS 92 MBOEPD 90.1 MBOEPD ~90 MBOEPD PRODUCTION1 CRUDE PROCESSING2 11.8 MT 9.1 MT ~
Slide 5: EBITDA under pressure from regulation and market
EBITDA UNDER PRESSURE FROM REGULATION AND MARKET UPSTREAM AND DOWNSTREAM WEAKNESS MITIGATED BY STRONG PERFORMANCE IN CONSUMER SERVICES FINANCIALS Clean CCS EBITDA decreased by 33% YoY to USD 976mn in Q3 2023, with 2023 YTD operative CF after WC almost doubling in Q3 to USD 1,420mn Upstream EBITDA st
Slide 6: TRIR decreased by 6% in 1-9 2023 (YoY)
TRIR DECREASED BY 6% IN 1-9 2023 (YOY) TOTAL RECORDABLE INJURY RATE (TRIR) ESG RATINGS UPDATE Modified guidance for 2023 (1.4) 2.0 1.92 MOL Group received „AA” rating for the sixth year in -6% a row by MSCI 1.5 1.40 1.40 1.43 1.27 1.38 1.34 1.13 1.0 “AA” rating represents the top ~20% performers 0.5
Slide 7: Government take continues to have significant effect
GOVERNMENT TAKE CONTINUES TO HAVE SIGNIFICANT EFFECT PROPORTIONAL EXTRA BURDEN WELL ABOVE 2022 LEVELS IN 2023 EXTRA GOVERNMENT TAKE 1 (USD MN) COMMENTS 1,076 1,061 Government take amounts to half of EBITDA in Ural-Brent spread 2023 YTD, above 2022 levels Extra mining royalty + penalty fee 203 New CO
Slide 8: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 9: Quarterly EBITDA nearing USD 1bn in Q3 2023
QUARTERLY EBITDA NEARING USD 1BN IN Q3 2023 LOWER GOVERNMENT TAKE, INORGANIC EXPANSION AND STRONG HIGH SEASON IN CONSUMER SERVICES DROVE THE QOQ INCREASE SEGMENT CLEAN CCS EBITDA (USD mn) COMMENTS -33% +137% Upstream 1,449 1,354 Q3 2023 EBITDA increased by 97% QoQ after USD 122mn tax was 640 recogni
Slide 10: Organic spending reached USD 337mn in Q3 2023
ORGANIC SPENDING REACHED USD 337MN IN Q3 2023 CAPEX SPENDING BELOW TARGET DUE TO UNCERTAIN ENVIRONMENT TOTAL GROUP CAPEX (USD mn) TOTAL GROUP CAPEX (USD mn) +5% -43% +5% -43% 1,014 1,014 459 614 614 334 337 350 334 337 0 14 334 334 350 85 197 88 422 14 87 29 159 141 197 119 278 1 266 9 37 33 33 7 51
Slide 11: Net income reached USD 1,185 mn in Q1-Q3 2023
NET INCOME REACHED USD 1,185 MN IN Q1-Q3 2023 Q1-Q3 2023 EARNINGS (USD mn) – BELOW THE EBITDA LINE ITEMS 2,101 169 Other 101 838 Consumer Services 551 4 42 209 76 2,270 Downstream 871 1,432 1,470 1,185 Upstream 578 Clean CCS CCS EBITDA excl. Special items DD&A and Profit from Total finance Income fr
Slide 12: USD 102mn FX driven financial expense in Q3 2023
USD 102MN FX DRIVEN FINANCIAL EXPENSE IN Q3 2023 CCS GAIN HIGHER DUE TO INCREASING CRUDE PRICES CCS effect, gain / loss (USD mn) Comments -414% +25% CCS gain in Q3 due to increasing crude prices 59 73 169 -23 1 Q3 2022 Q2 2023 Q3 2023 Q1-Q3 2022 Q1-Q3 2023 DD&A (USD mn) -4% 16% +2% Q3 DD&A in line w
Slide 13: Income tax expense lower due to drop in net income
INCOME TAX EXPENSE LOWER DUE TO DROP IN NET INCOME INTERSEGMENT FIGURE DRIVEN BY INCREASING COMMODITY PRICES Income tax expenses (USD mn) Comments Deferred 41 -70 -24 102 -25 tax: -46% -971% -66% Income tax in Q3 in line with long term effective tax rate 224 610 122 209 -14 Q3 2022 Q2 2023 Q3 2023 Q
Slide 14: Operating cash flow resilient even after high cash tax
OPERATING CASH FLOW RESILIENT EVEN AFTER HIGH CASH TAX SUPPORTED BY USD 195MN RELEASE OF WORKING CAPITAL OPERATING CASH FLOW FOR TOTAL OPERATION IN Q1-Q3 2023 (USD mn) 838 1,070 Discontinued 1,476 Operation (UK) 6 1,420 1,225 195 20 Continuing 810 operation 1,470 Profit Before Tax DD&A Income tax pa
Slide 15: Net debt to EBITDA increased but safely below guidance
NET DEBT TO EBITDA INCREASED BUT SAFELY BELOW GUIDANCE INDEBTEDNESS SAFELY BELOW TOLERANCE THRESHOLD EVEN AFTER DISTRIBUTION OF RECORD DIVIDEND NET DEBT TO EBITDA (x) GEARING (%) 2.0 30 27.3 25.2 1.61 25 1.5 20.6 1.31 19.6 20 18.6 18.1 17.5 0.97 14.5 1.0 15 0.82 12.0 0.74 11.4 0.65 0.65 10.0 0.59 10
Slide 16: Downstream Q3 2023 Results
DOWNSTREAM Q3 2023 RESULTS
Slide 17: Rebounding Downstream contribution in Q3 2023
REBOUNDING DOWNSTREAM CONTRIBUTION IN Q3 2023 USD 193 MN REVENUE BASED EXTRA TAX RECOGNIZED IN Q2 2023 QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL CRUDE PROCESSED (kt)1 TOTAL PRODUCT SALES (kt) Petchem R&M +4% +14% 861 -37% +358% 5,168 5,382 741 +6% +4% 4,836 288 303 4,601 4,730 20 4,065 310 1,253 469
Slide 18: Refining margin strengthened in Q3 2023
REFINING MARGIN STRENGHTENED IN Q3 2023 WHILE PETCHEM MARGINS ARE HISTORICALLY LOW REFINING MARGIN (USD/bbl) COMMENTS Brent-based MOL Group refinery margin (USD/bbl) (Ex-Ural) refining margins improved considerably in Q3 2023 driven by Brent-based Complex refinery margin (MOL+Slovnaft) (USD/bbl) hig
Slide 19: DS Q3 EBITDA down despite better volumes and ref. margin
DS Q3 EBITDA DOWN DESPITE BETTER VOLUMES AND REF. MARGIN HIGHER BRENT-BASED MARGINS AND BETTER SALES COULD NOT OFFSET THE IMPACT OF A NARROWER B-U SPREAD, THE RISE IN WINDFALL TAXES AND PETCHEM UNDERPERFORMANCE DOWNSTREAM CLEAN CCS EBITDA YoY, Q3 2022 VS. Q3 2023 (USD mn) COMMENTS 741 R&M price & ma
Slide 20: Consumer Services Q3 2023 Results
CONSUMER SERVICES Q3 2023 RESULTS
Slide 21: CS EBITDA doubled in Q3 2023 compared to last year
CS EBITDA DOUBLED IN Q3 2023 COMPARED TO LAST YEAR RESULTS SUPPORTED BY ACQUISITIONS AS WELL AS ORGANIC MARGIN IMPROVEMENT QUARTERLY EBITDA (USD mn) EBITDA YoY, Q3 2023 VS. Q3 2022 (USD mn) +107% 43% +91% 250 231 19 16 33 19 73 121 250 175 121 127 89 46 EBITDA Q3 Fuel volume Non-fuel Retail tax Inor
Slide 22: Q3 2023 fuel sales volume increased by 20%
Q3 2023 FUEL SALES VOLUME INCREASED BY 20% AVERAGE QUARTERLY THROUGHPUT INCREASED SLIGHTLY IN Q3 2023 YOY TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE1 (mn litres) 2% +20% +17% 4Y CAGR: +3.04% 1.01 1.03 2 306 0.92 0.93 1 969 0.85 1 916 1 810 1 705 1 706 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Slide 23: Non-fuel margin expanded by 46% YoY in Q3 2023
NON-FUEL MARGIN EXPANDED BY 46% YOY IN Q3 2023 WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL MARGIN INCREASED AND STOOD AT 35% NON-FUEL MARGIN (USD MN – CONST. FX) TOTAL NON-FUEL TURNOVER (USD MN – CONST. FX) +46% +28% +37% +25% 148.7 516.2 115.8 413.9 101.9 375.5 361.8 91.8 92.5 330.3 340.4 83.9 Q2
Slide 24: Total fuel volume increased by 37% since Q3 2019
TOTAL FUEL VOLUME INCREASED BY 37% SINCE Q3 2019 RESULTING IN A SIGNIFICANT MARKET SHARE EXPANSION FUEL VOLUMES SOLD 2019 Q3 - 2023 Q3 (mn liters) COMMENTS +37% +20% 2,306 37% increase of total sold volumes in Q3 2023 vs Q3 2019: 1,916 1,727 695 Supported by a 13% uplift without the impact of the Lo
Slide 25: Upstream Q3 2023 Results
UPSTREAM Q3 2023 RESULTS
Slide 26: E&P EBITDA rebounded to USD 195mn in Q3 2023
E&P EBITDA REBOUNDED TO USD 195MN IN Q3 2023 DRIVEN BY SLIGHTLY HIGHER REALISED HYDROCARBON PRICES AND LOWER WINDFALL TAX IMPACT QUARTERLY EBITDA (ex-spec) (USD mn) OIL PRICES -70% +97% 140 134.0 113.9 120 102.2 100.8 102.4 107.5 103.9 88.9 100 81.8 97.1 81.2 86.7 73.5 94.5 80 69.0 79.8 81.8 81.4 93
Slide 27: Unit free cash flow at 15 USD/bbl in Q3 2023
UNIT FREE CASH FLOW AT 15 USD/BBL IN Q3 2023 UNIT FCF GREW QOQ IN LINE WITH HIGHER EBITDA QUARTERLY PRICE REALIZATION, EBITDA, SFCF (USD/boe) 140 134 120 114 102 100 101 87 108 81 78 80 80 Brent price 89 72 60 62 78 67 67 Realized HC price 40 62 68 36 28 20 44 25 15 Unit EBITDA 15 0 3 Unit FCF** Q2
Slide 28: Improved price environment supports Q3 result, along with strong production performance
IMPROVED PRICE ENVIRONMENT SUPPORTS Q3 RESULT, ALONG WITH STRONG PRODUCTION PERFORMANCE UPSTREAM EBITDA QoQ, Q3 2023 VS. Q2 2023 (USD mn) COMMENTS Positive price impact driven by increasing Brent +8 price (87 vs 78 USD/bbl) +82 Production kept almost level despite -2 -5 5 +20 -11 turnarounds in Croa
Slide 29: Production still above 2023 target
PRODUCTION STILL ABOVE 2023 TARGET DESPITE CONTINUED SHUTDOWN OF THE KRI-TURKEY EXPORT PIPELINE PRODUCTION BY COUNTRY (mboepd) COMMENTS 95.9 92.4 90.9 91.7 Associated 90.5 90.1 10.8 87.3 86.8 90 mboepd 2023 guidance companies* 9.1 9.1 9.2 10.2 2.2 9.2 Other 2.2 2.2 4.6 10.5 4.5 2.2 2.0 KRI 4.5 4.3 2
Slide 30: Group level unit OPEX at 6.5 USD/bbl in Q3 2023
GROUP LEVEL UNIT OPEX AT 6.5 USD/BBL IN Q3 2023 REPRESENTING A 31% INCREASE YOY UNIT OPEX (USD/boe) UNIT OPEX YTD (USD/boe) 7.5 +31% GROUP (INCL. JVS/ASSOC.) FULLY CONSOLIDATED SUBS. +23% 7.0 7.2 +21% 6.5 6.4 6.5 5.9 6.3 6.0 5.7 5.6 5.9 6.60 5.5 5.4 5.3 5.7 6.00 5.2 5.1 4.95 5.35 5.5 5.0 5.2 4.8 5.1
Slide 31: Supporting Slides
SUPPORTING SLIDES
Slide 32: SFCF rebounded in Q3 in line with external environment
SFCF REBOUNDED IN Q3 IN LINE WITH EXTERNAL ENVIRONMENT REVENUE BASED TAX WITH USD 315MN IMPACT IN Q2 2023 SIMPLIFIED FCF* (USD mn) -43% +376% 1,115 1,049 555 640 108 520 517 328 583 134 12 199 142 84 54 67 29 -16 -57 -63 -136 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 US DS CS GM C&O (incl. int
Slide 33: Working interest based production remained flat QoQ
WORKING INTEREST BASED PRODUCTION REMAINED FLAT QOQ QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY* (mboepd) 130.0 129.0 129.3 130.4 117.4 117.5 Associated 15.5 15.7 15.5 17.2 15.7 17.0 companies* Other 4.2 4.2 4.4 4.4 4.2 3.8 8.2 7.8 0.1 KRI 8.3 8.6 5.9 2.8 Pakistan 6.3 6.1 5.9 6.1 6.0 34.9 33.6
Slide 34: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Croatia EXPLORATION EXPLORATION One Shallow Gas well was successfully drilled; well test follows Block DR-03: V. Rastovac-1 well test confirmed gas discovery; Obradovci-1 J drilling completed – dry hole; Mikleuš-1 drilling completed, well test to follow Kalóc
Slide 35: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Pakistan Russia EXPLORATION 2023 well workover program continued with 6 workovers performed TAL block (Operated): Kot West 3D seismic design study contract was signed QoQ and YoY production decreased due to reduced drilling/workover and project kicked-off activities
Slide 36: Upstream CAPEX by region and by type in 2023
UPSTREAM CAPEX BY REGION AND BY TYPE IN 2023 ORGANIC CAPEX BY REGION AND BY TYPE (USD mn) HUN CRO KRI PAK AZE OTHER Total – Q1-Q3 2023 Total – Q1-Q3 2022 EXP 19.7 10.8 0.0 (3.4) 0.0 0.4 27.4 20.7 DEV 34.9 27.4 9.3 0.1 100.7 11.9 184.3 198.7 Other 9.8 23.4 4.7 0.2 2.7 0.1 40.9 20.8 Total – Q1-Q3 2023
Slide 37: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) CAPEX (USD mn) -24% +32% +94% +24% 13.3 79 74 61 60 8.8 6.7 38 6.1 5.1 4.2 15 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 KEY FINANCIALS (USD mn) COMMENTS YoY YoY EBITDA rose by 94% YoY in Q3 2023 to US
Slide 38: Sustainability Indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE -7% +1% 2.0 6 5 -75% 0% 1.54 1000 1.40 1.41 1.40 1.41 1.43 916.8 +1089% +509% 4 4 1.5 4 1.0 155.4 2 100 71.3 2 1 1 0.5 41.9 6.0 11.7 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 20
Slide 39: Macro Indicators
MACRO INDICATORS BRENT (USD/bbl) MOL REFINERY MARGIN* (USD/bbl) HUF/USD (Q avg.) 120 20 450 Brent-based MOL Group 100 15 400 Brent-based Complex 80 350 10 60 300 40 5 250 20 0 200 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
Slide 40: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 40
Slide 41: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 41
Slide 42: Consolidated Statement of Cash Flow
CONSOLIDATED STATEMENT OF CASH FLOW 42
Slide 43: External Parameters
EXTERNAL PARAMETERS YoY Q2 2023 @32023 @3 2022 ch% Macro figures (average) Q1-Q3 2023 QI-Q3 2022. Ch%® 78 67 1008 __(1d)|_Brent dated (USD/bb). a2 1055 (22) 563 742 75. 4) (Urol Blend (USD/obI)™ 608 789 (2) (23), (22) (272) (55)|_Urols-Brent spread (USD/bb) (224) (24,6) 1300 351 27 2018|__(83)|_ TTF