MOL petchem unit swings to $31.8m operating loss on poor demand

14 August 2012 03:10  [Source: ICIS news]

LONDON (ICIS)--MOL’s petrochemical division posted a second-quarter 2012 operating loss of forint (Ft) 7.2 bn ($31.8m, €25.8m), compared with a Ft1bn operating profit in the same period a year ago, on the back of weak demand for polymers, the Hungarian oil, gas and petrochemicals group said on Tuesday.

MOL's petrochemical sales volume fell by 23% year on year to 298,000 tonnes with polymer sales falling by 30% to 209,000 tonnes and olefin sales edging up by 1% at 89,000 tonnes, the company said.

“The operating loss of the petrochemical division moderated somewhat in comparison to the previous quarter [when the division suffered a loss of....], but remained significant,” it said.

“In the deteriorated economic environment, depressed demand and volatile price expectations characterised the polymer product markets,” MOL said in a commentary on its second-quarter financial results.

Turnarounds at some key units during the second quarter also pushed down polymer product sales, the company said.

As a result of lower feedstock prices, the firm’s integrated petrochemicals margin climbed by 84% to €318/tonne from €173/tonne in the first quarter of this year, it added.

However, the depressed market appetite for products continue to weigh on MOL’s petrochemical division, which meant that although it “operated in a better margin environment, its positive impact on revenue was limited as the demand side remained extremely weak”, the company said.

Overall, MOL recorded a second-quarter net profit of Ft0.7bn, compared to Ft54bn in the same period of last year.

Its total sales edged up by 2% year on year at Ft1,300bn.

The company cited weakened demand for motor fuels and the fact that it had been unable to realise any revenue from conflict-hit Syria since last October as two negative factors in its performance.

($1 = Ft226.2, $1 = €0.81)

By: Will Conroy
+44 20 8652 3214

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