Hungarian oil company Mol announced on Thursday that it recorded a 70 percent year-on-year decline in net profit in the second quarter, to 26.9 billion forints (146 million dollars), impacted by the weakening dollar, financial losses, and increased tax burden.
Operating profit decreased simultaneously by 14 percent, to 88.4 billion forints. A decline in sales revenue of 14 percent was recorded, to 606.6 billion forints, as the drop in the dollar exchange rate affected results achieved in all segments of the company’s business. The company’s tax expense more than tripled year-on-year, to 39.3 billion forints. However, Mol attributes this primarily to tax reliefs that were in effect in 2006. CEO Zsolt Hernadi stated that despite weaker results, the foundations of the company are solid, citing the recent acquisition of the Italian refining company IES and the continued expansion of operations in Croatia as examples.
"We believe that both organic growth opportunities and our recent acquisitions demonstrate that we are on the right path to fulfilling our growth strategy," he said. This major player in the energy market of the region is currently occupied with persistent attempts by Austrian OMV aimed at its takeover since it increased its stake in Mol from 10 to 18.6 percent at the end of June. Mol strongly opposes this takeover and has begun repurchasing its shares to defend itself. On Thursday, it announced that it had purchased an additional 500,000 treasury shares, increasing its stake to 39.2 percent. (H)
