Hungarian MOL's Q4 profit jumps, helped by one-offs

By Krisztina Than

BUDAPEST, Feb 15 (Reuters) - Hungarian oil and gas firm MOL MOLB.BU reported a surge in its fourth-quarter net and operating profits on Friday due to improved upstream and downstream performance, big one-off gains and a low base.

MOL, which is the target of an unsolicited takeover approach by Austria's OMV (OMVV.VI), said its reported net income was 94.3 billion forints ($527.2 million) for the quarter -- 317 percent higher than a revised 22.6 billion in the same quarter of 2006.

It came in well above analysts' forecast for 65.11 billion forints in a Reuters poll earlier this week.

MOL said these numbers included one-off gains from the sale of its gas subsidiaries and on the acquisition of TVK shares and also the benefit of MOL's tax holiday in 2006, as well as a big non-cash gain on the fair valuation of an earlier conversion option with Magnolia Finance Ltd.

For the full-year, MOL reported a net income of 254.1 billion forints, down 23 percent from 2006.

Net income stripped of special items with the exception of the Magnolia impact was 73.5 billion forints in the fourth quarter, up 293 percent from 18.7 billion a year ago.

Operating profit also jumped in the fourth quarter.

"In Q4 2007 ... operating profit excluding special items increased by 68 percent in USD-terms as strong increase in downstream and petrochemical sales volumes, strong crude prices as well as improving crack spreads compensated for lower hydrocarbon production and lower integrated petrochemical margins," MOL said in a statement.

The weak dollar offset some of the positive impacts and thus operating profit in forint terms excluding special items increased by 44 percent to 67.4 billion forints due to a 14 percent depreciation of the dollar versus the forint.

Reported operating profit was 91.7 billion forints, up from a revised 45.9 in the corresponding period of 2006.

Analysts expected an operating profit of 69.98 billion.

In the fourth quarter MOL had a one-off non-cash gain of 16.7 billion forints on its Magnolia swap agreement, which boosted its bottom line. Excluding also this impact, its net income was 56.9 billion forints, MOL said.

Exploration and production operating profit rose by 29 percent year-on-year to 20.1 billion forints in the fourth quarter helped by rising crude prices, despite a weak dollar and a drop in production volumes which was due to halting production in a major gas field last year.

In refining and marketing, MOL's biggest division, fourth-quarter operating profit rose both in dollar and forint terms due to favourable crack spreads, higher sales volumes and the positive effect of inventory holding.

MOL's petrochemicals division saw operating profit drop due to an erosion of margins on a rise in raw material prices.