Italian energy giant Eni suffered a 41% drop in its second quarter Q2 2023 adjusted profit before tax to €3.7 bill.
However, this represents a highly robust outcome given the 30% fall in crude oil prices and with gas price and refining margins down over 60%, the company said.
In particular, pro-forma adjusted EBIT, including the operating margin of equity accounted entities, was €4.2 bill versus €7 bill in 2Q22.
This performance reflected resilient exploration and production (E&P) earnings, featuring growing production, another very strong contribution from Global Gas & LNG Portfolio (GGP), plus contributions from Sustainable Mobility and Plenitude sectors.
In the gas sector, GGP earned €1.1 bill of adjusted EBIT in 2Q23, compared to around breakeven in the same period of 2022, resulting in a very good first half EBIT outcome of €2.5 bill, Eni said.
GGP’s 2Q23 result was mostly driven by specific benefits relating to contractual triggers, plus renegotiations and settlements related to previous periods that are a feature of the business.
In addition, in a market environment still characterised by some degree of volatility and arbitrage opportunities, the continued asset optimisation and trading have also contributed to the quarterly performance, Eni said.
Second quarter adjusted net profit attributable to Eni shareholders was €1.94 bill, which was impacted by the weaker scenario, but significantly offset by underlying business performance.
The Group’s adjusted tax rate, which did not include Italian extraordinary contributions, was under 50%, despite inclusion of the UK energy profit levy.
First half of 2023 adjusted net profit attributable to Eni shareholders was €4.84 bill.
In 2Q23, Group adjusted operating cash flow before working capital at replacement cost was €4.2 bill, exceeding outflows related to organic capex of €2.6 bill and dividend payments (€0.7 bill).
For 1H23, adjusted cash flow was €9.5 bill, resulting in an organic free cash flow of €3 bill.
Eni’s Board approved the distribution of the first of the four tranches (resulting in a total annual dividend of €0.94) of the dividend for the fiscal year 2023 of €0.24 per share outstanding at the ex-dividend date as of 18th September, 2023.
Eni also issued the updated operational and financial guidance.
Specifically for GGP, adjusted EBIT guidance was raised to €2.7 bill - €3 bill for the year, versus the previous guidance of €2 bill - €2.2 bill.
