Eni’s net profit beats expectations powered by strong gas business
Italian energy group Eni has revealed its first-quarter net profit fell 11 per cent year on year on lower oil and gas prices compared with the first three months of 2022, when Russia’s invasion of Ukraine sent energy prices soaring.
Adjusted net profit for the period came in at £2.56bn – down from £2.88bn euros a year ago but above an analyst consensus of £2.04bn.
The results were underpinned by a rise in hydrocarbons production and a better-than-expected performance at the gas and liquefied natural gas division (GGP), which reported earnings before interest and taxes (EBIT) nearly double what analysts had estimated.
Shares in Eni rose as much as one per cent in early trading before turning negative and shedding 0.7 per cent this morning, with Milan blue-chip index down 1.5 per cent.
The group revised its forecasts for the underlying economic scenario and duly tweaked its guidance for the year.
On the back of a stronger euro, a lower gas price in Italy and a higher refining margin, Eni now expects its full-year EBIT at £10.6bn versus a previous guidance of £11.5bn.
Bernstein analysts supported Eni’s view that the underlying performance was actually healthier than previously expected.
“Adjusting for their refining, European gas and FX updated planning prices, then EBIT guidance would have been down by £1.94bn, Hence, this is a material £1.96bn underlying EBIT raise,” Bernstein said.
It has an “Outperform” rating on the stock.
The group also cut the expectation on 2023 capital expenditures to around £8.11bn to £8.37bn.
“With our resilient financial position and flexibility we can confirm the basis on which we will seek authorisation at the AGM in May for the previously announced plan to raise the 2023 dividend to 83p per share and begin our £1.94bn share buyback,” chief executive Claudio Descalzi said in a statement.
Separately Eni’s chemicals division Versalis said it agreed to acquire the majority share of Italian chemicals group Novamont it does not already own.
Reuters – Francesca Landini