Business in Romania blog
The business in Romania blog writes about the Romanian business landscape, doing business in Romania, investing in Romania business and debating on business issues in Romania. Check this Blog's Policy here.



Thursday, November 25, 2004
Business in Romania blog
source: Reuters

Hungarian oil and gas firm MOL said on Tuesday it will buy Royal Dutch/Shell Group's Romanian fuel distribution business in a deal analysts valued at around $50 million.

The sale includes 59 gasoline filling stations and a smaller lubricants and aviation fuel business, enabling MOL to further expand its retail footprint in central Europe.

For Shell, the sale is the latest in a raft of disposals as the company presses ahead with a $10-12 billion divestment programme that will help fund increased oil and gas exploration.

Shell's Romanian liquefied petroleum gas (LPG) business is not included in the sale. This may be sold as part of the global LPG business of which Shell is also mulling a sale.

With the deal, MOL will have 130 filling stations in Romania, which gives it an 11 to 12 percent market share and makes it the second largest player in the country's fuel market after Petrom, MOL Communications Director Szabolcs Ferenc said.

Analysts said MOL had taken a big step toward meeting its targets. They said the company was known not to overpay.

"The rule of thumb is that each filling station costs $1 million, but I think they paid somewhat less, probably around $50 million for the whole thing," said K&H Equities analyst Peter Tordai.

At 1120 GMT, MOL stock was up 2.6 percent at 11,815 forints ($49.9).

Austria's OMV recently agreed to buy a 51 percent stake in Petrom for a reported 830 million euros ($1.1 billion).

GROWTH MARKET

Ferenc said MOL was ahead of its own target to increase market share. "We wanted 10 percent market share by the end of 2005, and this already puts us ahead."

Raiffeisen Bank analyst Kornel Sarkadi said MOL's best growth markets were Romania and the former Yugoslavia, which meant the deal was a good strategic fit.

"MOL knows perfectly well how much these assets are worth, and they are not known for overpaying," Sarkadi said.

K&H's Tordai pointed out, however, that MOL's returns on Romanian investments have been low and that MOL has yet to turn an annual profit on its Romanian operation.

"Whereas we calculate Hungarian retail margins around 10 euro cents, that's below 5 cents in Romania, so this acquisition is very much an issue about return on investments," Tordai said.

But Tordai added that with this move, MOL could acquire the critical mass in Romania that would allow it to significantly improve its efficiency indicators.

Ferenc noted that 10-month figures show the Romanian unit would turn an annual profit for 2004.

Posted by Mihai : 11/25/2004 01:13:00 pm MOL buys Shell's Romanian filling stations
Business in Romania blog
Business in Romania blog


Business Archives

06/01/2004 - 07/01/2004
08/01/2004 - 09/01/2004
09/01/2004 - 10/01/2004
10/01/2004 - 11/01/2004
11/01/2004 - 12/01/2004
12/01/2004 - 01/01/2005
01/01/2005 - 02/01/2005
02/01/2005 - 03/01/2005
03/01/2005 - 04/01/2005
04/01/2005 - 05/01/2005
05/01/2005 - 06/01/2005
06/01/2005 - 07/01/2005
07/01/2005 - 08/01/2005
08/01/2005 - 09/01/2005
09/01/2005 - 10/01/2005
10/01/2005 - 11/01/2005
11/01/2005 - 12/01/2005
12/01/2005 - 01/01/2006
01/01/2006 - 02/01/2006
02/01/2006 - 03/01/2006


www.flickr.com
This is a Flickr badge showing public photos from Mihai Botea. Make you own badge here.


Add Business in Romania to My Yahoo!
Google


Previous Posts

Links

Business in Romania Feed Burner
 

Business in Romania is powered by Blogger

This website is proud to be designed by Mihai Dragan

I usually listen to THIS kind of music.