MOSCOW (MRC) -- MOL (Budapest, Hungary) has reported a 58% decline year on year (YOY) in its downstream EBITDA earnings to USD110 million for the second quarter on a current cost of supply (CCS) basis, due largely to negative refinery margins, despite a “resilient” contribution from its petrochemical activities, reported Chemweek.
The company, which does not break out its petchem earnings separately, says the quarter featured major operational challenges “with unprecedented price and margin movements.” The contribution from its petchems activities “remained resilient, as both margins and volumes held up reasonably well during the pandemic,” it says.
MOL’s integrated petchem margin averaged EUR431/metric ton (USD507/metric ton) in the quarter, up 2% YOY, with robust sales, especially in May when it recorded its highest ever sold volume, it says. The integrated petchem margin declined gradually during the quarter from a very high level in March and April as oil prices rose, “but the margin overall remained at a supportive level in both the second quarter and July,” it notes.
The company’s polyols project is now 65% complete, with all major prefabricated equipment on site and the transportation of all oversize equipment via river or sea completed, MOL says. “While some small delays are likely due to the pandemic, MOL remains fully committed to complete this flagship investment according to plans,” it says. Capital expenditure on the polyols project totaled USD101 million in the second quarter.
MOL’s total olefins production in the quarter was down 5% YOY at 504,000 metric tons, while total butadiene production plunged 62% to 23,000 metric tons. Total polymers production was virtually flat YOY at 301,000 metric tons. External total petchem sales output totaled 372,000 metric tons, up 6% on the prior-year quarter, with the company’s polymer products making up the majority of the total with 307,000 metric tons of sales, up 12% YOY.
MOL swung to a net loss for the group in the second quarter of USD142 million, from earnings of USD270 million a year earlier, on sales that declined 45% YOY to USD2.59 billion due to the pandemic and the worldwide economic crisis, it says. It has reconfirmed its 2020 capex guidance of up to USD1.5 billion.
As MRC informed before, in late March, 2020, Hungarian MOL Group started production of hand and surface sanitizers to offer protection against the coronavirus.
We remind that MOL Petrochemicals Company (formerly known as TVK, part of the MOL Group), the only Hungarian producer of olefins and polyolefins, announced force majeure on the supply of polypropylene (PP) from plant No. 4 at the petrochemical complex in Tiszaujvaros (Tiszaujvaros, Hungary) on 23 September 2019.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MOL Hungarian Oil and Gas PLC is an integrated oil and gas company. The Company produces crude oil, petroleum products, bitumens, lubricants and natural gas. MOL owns and operates refineries, oil and gas pipelines, service stations, and natural gas storage facilities.
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