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Hungary's MOL posts jump in Q3 profit, raises 2022 EBITDA guidance

BUDAPEST (Reuters) - Hungarian oil and gas group MOL on Friday reported a surge in third-quarter net profit and EBITDA, boosted by strong refining margins on cheaper Russian crude, despite a government-imposed fuel price cap in Hungary.

MOL, which operates refineries in Hungary, Slovakia, and Croatia, raised its EBITDA outlook for 2022 to about $4.1 billion-$4.4 billion from its previous guidance of $3.3 billion.

According to a European Union (EU) deal on sanctions against Russia that exempted Russian oil delivered by the Druzhba pipeline going to Hungary, Slovakia and the Czech Republic, MOL's Danube refinery continues to receive Russian crude through the Druzhba pipeline.

Receiving cheap Russian Urals by pipeline has boosted margins for MOL even though the Hungarian government has imposed windfall taxes on the company, and a price cap has been in place for fuels since late-2021.

MOL's downstream clean EBITDA jumped 70% year-on-year to $741.2 million in the third quarter.

"Brent-Ural spread remained at elevated levels in the Q3 2022 period, however (it) shrank somewhat by early-August," MOL said in a presentation of its results.

MOL posted a quarterly net profit of 262.1 billion forints ($632.91 million), up from 119.3 billion in the third quarter of 2021.

The company said that after a temporary increase in Q2 2022, the petrochemical margin decreased further, while motor fuel demand "showed sings of normalization as consumption decreased in Hungary and Slovakia, down by 3% and 2%, respectively."

MOl said the estimated impact of fuel price regulation and windfall taxes across the CEE region amounted to approximately $1.18 billion in the first nine months of 2022.

($1 = 414.12 forints)

(Reporting by Krisztina Than; editing by Uttaresh.V)