MOHU 2025 Financial Report: Structural Problems and Decreasing, Yet Significant Losses in Waste Management

The financial report of MOHU MOL Hulladékgazdálkodási Zrt. for the 2025 business year presents a mixed picture. Although the company’s net loss decreased slightly compared to the previous year, its income-generating capacity remains deeply negative. The officially regulated fees for the concession public service provision are unable to cover the increased operational and subcontracting costs. The following analysis, relying strictly on the figures from the official report, details the evolution of the 2025 results, the main loss-generating areas, and the capital situation requiring owner intervention.

Summary of Results: A Smaller, but Persistent Deficit

The company booked a significant loss in the 2025 business year as well, however, a minimal improvement of 5.1% can be observed in the after-tax result. A detailed examination of the revenue and expenditure lines reveals that the growth in the volume of operations had a strong impact on both sides.

Net sales revenue increased dynamically by 13.8%, but material expenses—which represent the company’s largest cost element—also grew by more than 10%.

Main Lines of the Income Statement (in HUF millions):

Structural Problem at MOHU: Costs Are Not Covered by Fees

The fundamental cause of the loss, clearly identified by the management as well, stems from the structural characteristics of the operating model: the current cost level cannot be financed by the fees regulated by authorities (MEKH methodology and ministerial decrees).

This is extremely stark in terms of numbers. In 2025, the value of services utilized reached HUF 451,929 million, which alone exceeds the total net sales revenue of HUF 431,705 million. Breaking this cost down further, the actual waste management activity (the subcontracting fees for collection, sorting, transportation, and pre-treatment) consumed HUF 434,175 million. This single cost line completely wipes out the sales revenue even before personnel expenses (HUF 5,407 million), depreciation (HUF 6,656 million), or other expenses are deducted. The equipment fleet to be built and the rapidly growing capacity demand of the concession system keep expenditures under constant pressure.

Sources of Loss: Breakdown by Activity Areas

The statements prepared based on the accounting separation policy clearly show which subsystems are responsible for the negative results.

After-tax Result Breakdown by Activity (in HUF millions):

Two main areas dominate the company’s losses:

1. Public service activity (residential waste collection): This is a textbook example of a “regulated fee below cost” problem, and also the largest and most persistent source of loss. Against the segment’s sales revenue of HUF 100,256 million, there is a utilized service cost of HUF 159,332 million. Providing the service is therefore nearly 60% more expensive than the revenue generated from residential fees.

2. Deposit Return System (DRS): The most drastic deterioration occurred in this area, where the deficit plummeted from HUF 9,277 million to HUF 37,859 million. There are two distinct reasons behind this:

   • Revenue side: In 2024, during the system’s half-year launch period, the fees retained for unreturned bottles generated outstanding, one-off “other revenue” (HUF 32,942 million). By 2025, with the establishment of the residential return routine, this revenue source shrank to HUF 14,707 million.

   • Expenditure side: Due to a full year of operation, the continuously expanding vending machine network, and the surging processing volume, the cost of services utilized connected to the DRS skyrocketed from HUF 28,156 million to HUF 62,585 million. Furthermore, due to the increasing return rate, the company must also account for higher future liabilities.

What Mitigated the Loss?

Although the overall picture is negative, meaningful improvement occurred in several areas, which prevented the deficit from deepening further:

• Significant sales revenue growth: The 13.8% growth was supported by multiple factors. These include the invoicing of institutional and municipal public sanitation fees affecting previous years at a higher value than accrued, increased sales of recoverable materials, the fourth-quarter EPR price increase, and the full-year continuous operation of the DRS system.

• Decreasing other expenses and provisions: Other expenses dropped from HUF 33,471 million to HUF 23,317 million. This is mainly due to the fact that the provision made for DRS return fees decreased from a spiked HUF 18,727 million in 2024 to HUF 3,277 million in 2025.

• The turnaround of the EPR system: The Extended Producer Responsibility system reached a turning point. Driven by the fourth-quarter price increase, the segment’s after-tax result improved spectacularly from −10,115 million to −1,861 million HUF, and at the operating level, it already showed a surplus of HUF 1,137 million in 2025.

• Improving financial results: The loss from financial operations decreased from HUF 7,672 million to HUF 5,994 million. This was made possible by lower interest payable (dropping from HUF 8,672 million to HUF 6,276 million), which is tied to financing against the affiliated undertaking.

Critical Capital Situation and Owner Intervention

Continuous and accumulated losses inevitably impacted the company’s capital position. Equity flipped from the previous positive range of HUF 44,837 million into the negative, standing at −2,975 million HUF. Retained earnings sank to −45,168 million HUF, and the capital reserve of HUF 89,985 million, which had provided security thus far, was no longer sufficient to cover the accumulated deficit.

Since the negative equity violated the relevant provisions of the Civil Code, the owner, MOL Nyrt., had to step in. To resolve the situation, a capital increase with a premium of HUF 16.6 billion was executed in April 2026 (of which HUF 1 million went to the subscribed capital, while HUF 16,599 million strengthened the capital reserve).

Summary and Outlook

MOHU’s financial data clearly prove that the company’s economic difficulties are not sporadic. Behind the deeply negative EBITDA margin of −8.1% lies a persistent underfunding stemming from the regulatory environment. While a positive trend has started in the EPR system, in the two most significant areas—the officially priced residential public service and the DRS system, which transitioned to normal operational mode but with doubled costs—expenditures drastically exceed revenues. Despite the slight profit improvement in 2025, the system’s income-generating capacity continues to face serious challenges on this structural basis.

References and Official Sources:

• Claude AI
• The official methodological data of state and regulatory bodies, as well as public data affecting MOHU’s core activities, are available on the following portals:

  • Official website of MOHU

  • Hungarian Energy and Public Utility Regulatory Authority (MEKH)