MOL Magyar Olaj es Gázipari Nyilvánosan Muködo Reszvenytársaság : Group Half Year Report 2022

MOL GROUP

2022 HALF-YEAR REPORT

1

2022 HALF-YEAR REPORT OF MOL GROUP

Introduction

General information

MOL Hungarian Oil and Gas Plc. (Reuters: MOLB.BU, MOLBq.L, Bloomberg: MOL HB, MOL LI; website: www.molgroup.info), today announced its 2022 half-year report. This report contains consolidated, unaudited financial statements for the six months period ended 30 June 2022 as prepared by the management in accordance with International Financial Reporting Standards.

Contents

2022 HALF-YEAR REPORT OF MOL GROUP	1
Management Discussion and Analysis	2
MOL Group Financial Results	2
Upstream	5
Downstream	10
Consumer Services	13
Gas Midstream	14
Non-financial Overview	15
Integrated Corporate Risk Management	16
Outlook on Strategic Horizon	18
Interim Condensed Consolidated Financial Statements
for the six months ended 30 June 2022	19
Appendices	47

2

MANAGEMENT DISCUSSION AND ANALYSIS

MOL Group Financial Results

Q1 2022		Q2 2022		Q2 2021	YoY	(IFRS), in HUF billion*		H1 2022		H1 2021	Ch %
		Ch %
1,933.4		2,491.0		1,412.6	76	Net sales revenues (8)		4,424.4		2,494.8	77
292.2		473.1		255.3	85	EBITDA		765.3		470.7	63
292.2		473.1		255.3	85	EBITDA excl. special items(1)		765.3		470.7	63
271.7		483.7		246.8	96	Clean CCS-based EBITDA (1) (2) (10)		755.4		428.7	76
229.7		365.9		140.6	160	Profit from operation		595.6		242.1	146
188.2		362.2		140.6	158	Profit from operation excl. special items(1)		550.4		242.1	127
167.7		372.8		132.1	182	Clean CCS-based operating profit (1) (2) (10)		540.5		200.1	170
1.2		(24.1)		24.9	n.a.	Net financial gain / (expenses)		(22.9)		16.2	n.a.
138.8		249.5		178.2	40	Net profit attributable to equity holders of the		388.3		259.1	50
		parent
389.2		511.8		267.4	91	Operating cash flow before ch. in working capital		901.0		509.3	77
(4.7)		352.8		343.4	3	Operating cash flow		348.0		382.5	(9)
						EARNINGS PER SHARE
208.8		364.4		253.7	44	Basic EPS, HUF(6)		575.3		368.8	56
146.4		359.0		253.7	41	Basic EPS excl. special items, HUF (1)(6)		508.5		368.8	38
						INDEBTEDNESS
0.69		0.45		0.98	-	Simplified Net debt/EBITDA		0.45		0.98	-
19%		14%		22%	-	Net gearing(16)		14%		22%	-
Q1 2022		Q2 2022		Q2 2021	YoY	(IFRS), in USD million*		H1 2022		H1 2021	Ch %
		Ch %
5,931		6,871		4,802	43	Net sales revenues(3)(8)		12,802		8,408	52
895		1,307		867	51	EBITDA(3)		2,202		1,582	39
895		1,307		867	51	EBITDA excl. special items(1) (3)		2,202		1,582	39
833		1,347		838	61	Clean CCS-based EBITDA(1) (2) (3) (10)		2,179		1,443	51
696		1,011		476	112	Profit from operation(3)		1,707		810	111
575		1,001		476	110	Profit from operation excl. special items(1) (3)		1,576		810	95
513		1,040		447	133	Clean CCS-based operating profit (1) (2) (3) (10)		1,553		671	131
3		(71)		85	n.a.	Net financial gain / (expenses) (3)		(68)		57	n.a.
423		690		606	14	Net profit attributable to equity holders of the		1,113		873	27
		parent(3)
1,194		1,410		910	55	Operating cash flow before ch. in working capital(3)		2,604		1,716	52
(8)		957		1,177	(19)	Operating cash flow(3)		949		1,311	(28)
						EARNINGS PER SHARE
0.6		1.0		0.9	17	Basic EPS, USD (3)(6)		1.6		1.2	33
0.5		1.0		0.9	15	Basic EPS excl. special items, USD(1)(3)(6)		1.5		1.2	17

1. Special items of operating profit, EBITDA are detailed in Appendix II. and IV.
2. (3) (6) (8) (10) (17) Please see Appendix XI.

*Key figures for continuing operations

3

Q1 2022		Q2 2022		Q2 2021	YoY	EBITDA Excluding Special Items (HUF bn)(1)		H1 2022		H1 2021	Ch %
		Ch %
163.1		207.7		82.9	151	Upstream		370.9		157.2	136
104.4		296.3		140.4	111	Downstream		400.8		250.4	60
85.0		308.3		131.9	134	CCS-based Downstream EBITDA (2)		393.3		208.3	89
15.5		5.5		6.8	(19)	Gas Midstream		21.1		21.1	0
20.7		16.6		48.3	(66)	Consumer Services		37.3		82.6	(55)
(9.6)		(25.6)		(9.8)	161	Corporate and other		(35.2)		(20.4)	72
(2.1)		(27.4)		(13.3)	107	Intersegment transfers (9)		(29.5)		(20.1)	47
271.7		483.7		246.8	96	Clean CCS-based EBITDA for continuing operation(2)		755.4		428.7	76
		(10)
292.2		473.1		255.3	85	Total EBITDA excluding special items for continuing		765.3		470.7	63
		operation
36.3		39.2		16.1	144	Total EBITDA excluding special items for		75.6		34.5	119
		discontinued operation
328.5		512.3		271.4	89	Total EBITDA excluding special items		840.9		505.1	66
Q1 2022		Q2 2022		Q2 2021	YoY	EBITDA Excluding Special Items (USD mn)(1)		H1 2022		H1 2021	Ch %
		Ch %
504		576		282	104	Upstream		1,080		529	104
312		820		477	72	Downstream		1,132		840	35
254		863		447	93	CCS-based Downstream EBITDA (2)		1,117		701	59
48		15		23	(33)	Gas Midstream		64		71	(10)
64		46		164	(72)	Consumer Services		110		279	(60)
(29)		(72)		(34)	112	Corporate and other		(102)		(69)	47
(4)		(78)		(45)	73	Intersegment transfers (9)		(82)		(68)	21
833		1,347		838	61	Clean CCS-based EBITDA for continuing operation(2)		2,179		1,443	51
		(10)
895		1,307		867	51	Total EBITDA excluding special items for continuing		2,202		1,582	39
		operation
111		108		55	96	Total EBITDA excluding special items for		219		116	89
		discontinued operation
1,006		1,415		922	53	Total EBITDA Excluding Special Items		2,421		1,698	43

1. Special items of operating profit, EBITDA are detailed in Appendix II. and IV.
2. (9) (10) Please see Appendix XI.

Financial highlights

• Clean CCS EBITDA of continuing operations amounted to HUF 484bn (USD 1,347mn) in Q2 2022 and HUF 755bn (USD 2,179mn) in H1 2022, however a USD 1.7bn working capital build weighted on CF generation.
• The estimated impact of fuel price regulation and windfall taxes amounted to approximately USD 640mn with 90% affecting operations in Hungary in H1 2022.
• Downstream delivered HUF 308bn (USD 863mn) Clean CCS EBITDA in Q2 2022 representing a 134% increase year-on-year. H1 Clean CCS EBITDA for the segment amounted to HUF 393bn (USD 1,117mn), 89% higher than a year ago, as diminishing Petchem contribution was offset by higher R&M EBITDA generation.
• Consumer Services EBITDA declined by 66% year-on-year to HUF 17bn (USD 46mn) in Q2 2022 and also decreased by 55% year-on- year to HUF 37bn (USD 110mn) in H1 2022. Fuel margin regulation in various CEE countries and the retail tax in Hungary had visible negative impact to EBITDA.
• Upstream EBITDA excluding special items increased 151% year-on-year to HUF 208bn (USD 576mn) in Q2 2022. H1 EBITDA for the segment amounted to HUF 371bn (USD 1,080mn), 136% higher versus the previous year's H1. The segment results were supported by significantly higher oil and gas prices.
• Net debt to EBITDA hovers around 0.5x as strong operational CF generation was partly offset by a significant working capital build.

Operational and other highlights

• (Ex-UK)oil and gas production averaged at 92.4 mboepd, above the annual guidance of 90+ mboepd.
• Motor fuel demand increased by 11% in Hungary driven by the fuel price cap, significantly exceeding the demand uplift of Croatia and Slovakia (4% and 1% respectively) in Q2 2022
• MOL was announced as a winner for the Hungarian state concession tender covering municipal waste management services for a period of 35 years.

4

• The ICSID court of arbitration delivered its verdict in the case between Croatia and MOL. The court unanimously rejected Croatia's objection that the agreements concluded in 2009 are a results of criminal conduct and delivered a ruling that Croatia caused substantial damages to INA, therefore MOL was awarded a total of USD 236mn in damages.

Zsolt Hernádi, MOL Chairman & CEO, comments:

"The second quarter of 2022 was again a period that brought unprecedented uncertainty for the whole energy industry. Our duty of maintaining security of supply in several Central and Eastern European countries became the number one priority and we were able to deliver it in the last months as well. However, MOL's businesses suffer from the state interventions across Central and Eastern Europe, putting pressure on our financials and operations. On the other hand, it is reassuring that even in these crisis-hit months we were able to deliver in line with our plans, we are on the right track to achieve our goals and that regulatory measures do not hinder our investment plans. We have several transformational projects on the way pursuing targets laid down in our 2030+ strategy, topped with a round of new investments aiming for supply diversification. In these difficult times, MOL is more focused than ever not to lose sight of these ambitious goals."