MOL therefore stands chances of overshooting the 200 gas station mark in 2014 and achieving its strategic goal of a 15% share of the fuel retail market in Romania a year earlier.
Although Daradics says she still believes in the potential of this market, demand for fuel will be lower in 2014 again, despite a good start of the year, so the need for local infrastructure development becomes even more pressing.
“The market declined by about 2% in the first half compared with last year. MOL Romania’s results, however, indicate stagnation in the retail area, where we sold about 236,000 tons of gas and diesel. We kept sales flat by aggressive promotions. We believe the demand will be lower on the overall market again this year,” Kinga Daradics says.
Although fuel demand had shown signs of a slight rebound in the first quarter, the introduction of EUR0.07 excise duty per fuel liter as of April 1 came as a real shock for the market, with many large trucking companies announcing they would rather refuel abroad instead of Romanian gas stations.
The latest Oil Bulletin (August 11) shows Romania to have the ninth most expensive diesel liter in the EU, EUR1.4, a higher price than on markets that far surpass it in terms of purchasing power like Germany, Belgium, Austria and Luxembourg. Romania ranks 19th in the EU by gas liter price, EUR1.38, ahead of Austria and Poland.
Although the EUR0.07 per liter were supposed to go to new roads, which would in turn drive sales of fuel up, the government will most likely use the money to pay pensions.
“Whereas we saw growth in volume on the entire market in the first quarter, in the second we had to deal with the introduction of the excise duty and with certain major trends that have to do with the economy,” Kinga Daradics says.
“Fiscal predictability is mandatory to keep sales going. Moreover, we depend on infrastructure development. Under the circumstances, we are looking more closely at our clients, at the companies that focused on exports, for instance. We have a network of more than 2,000 gas stations in the region, which can be an advantage to us.”
MOL Romania’s sales stayed flat in the first half also because of continued expansion investment. The company has opened 11 new gas stations since the beginning of the year, so that it now has 154.
The network will grow with the addition of 42 stations acquired from Italy’s ENI, but the deal is still being reviewed by the Competition Council, so Kinga Daradics would not comment on it.
Why did MOL bought the Agip stations?
“There were two reasons for the decision to buy the ENI gas stations in Romania. First of all, this acquisition enables us to achieve our strategic targets. Another factor in this decision was that the deal got us greater access to the customers in the south of the country,” MOL Romania’s CEO explains.
MOL had set a target of 15% share of the fuel market for next year, which it will attain at the end of this year instead.
What is MOL’s next goal?
“We cannot discuss any scenario about the ENI deal unless the Competition Council approves it. We set out to achieve a 15% market share, and this acquisition fit into our goal,” Kinga Daradics added.
Now that it has taken over the Agip gas stations, MOL stands every chance of going beyond EUR1 billion revenue, considering it posted EUR979 million revenue in 2013, 5% more than in 2012.
Net profit grew at a higher rate, almost 19% on 2012, to EUR20.3 million.
MOL is one of the few fuel retail companies that manage to stay profitable year after year.
“We assess each station periodically,” MOL Romania CEO says.
Despite the expected decline of the market, MOL says it will not give up plans to increase its market share.
“We now have 154 gas stations and will add the 42 from ENI once the Competition Council approves the deal and want to reach 200 by yearend. We are everywhere in Romania now but are constantly watching infrastructure development. We believe in the potential of this market,” Kinga Daradics said.
(English version by Loredana Fratila-Cristescu)