MOL financial background is strong, stable, says CEO

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Thursday 14:44, April 23rd, 2009

Hungarian oil and gas company MOL has a strong and stable financial background and it aims to strengthen its position in order to take advantage of market opportunities during the pickup after the recession, CEO György Mosonyi told shareholders at an annual general meeting.

MOL has a €1.5 billion credit line it can call down and it is prepared for tight times, Mosonyi said.

MOL expects stagnation or slight growth in both 2010 and 2011. It puts the price of oil at $40 - $80 per barrel, but closer to $80.

Refining margins are unsustainable because of the low oil prices, Mosonyi said. There are 40 refineries in Europe that are making losses, and rising costs, such as for electricity, will allow only the efficient refineries to maintain profitability, he added.

MOL continues to be committed to strict cost controls and will cut its CAPEX by 35% to HUF 220 billion in 2009 by, for example, putting off until later a more expensive part of one of the projects at the company's Duna Refinery, Mosonyi said.

Shareholders at the meeting approved a proposal to place all of 2008 profits into profit reserves, paying no dividend. But the management said the company would return to its earlier practice of paying out 40% of profits to shareholders in the future, depending on investments.

Shareholders approved MOL's 2008 IFRS report showing net income of HUF 141 billion and total assets of HUF 2,916 billion a well as its Hungarian Accounting Standards report with losses of HUF 223 billion, HUF 131 billion of reserves and total assets of HUF 2,595 billion. (MTI – Econews)