Italian oil and gas giant Eni almost quintupled its third-quarter net profit to 5.86 billion euros, driven by soaring energy prices in the wake of the war in
Ukraine.
This result, published on Friday, is well above the consensus of Factset analysts, who were expecting a profit of 2.15 billion euros.
Eni has already earned in nine months 13.26 billion euros in net profit, significantly more than in the whole of last year (6.12 billion euros).
Its revenues doubled to 37.3 billion euros, again well above analysts’ expectations.
The net profit was inflated by a one-time gain of 2.45 billion euros, due to the contribution of Eni’s Angolan subsidiaries in exchange for a 50% stake in a joint venture in Angola, Azule Energy, the group explained in a statement.
Adjusted net profit – an indicator closely scrutinized by the markets because it excludes exceptional items – rose by 161% to 3.73 billion euros.
Eni has benefited, as has the entire sector, from the surge in hydrocarbon prices, caused by the resumption of economic activity after the lifting of restrictions linked to the coronavirus pandemic and then fanned by Russia’s invasion of Ukraine.
Its competitors also posted insolent profits in the third quarter: the French group TotalEnergies posted a net profit of 6.6 billion dollars, ahead of the British Shell, which reported a profit of 6.7 billion dollars.
– Production down –
Eni now expects North Sea Brent crude to average $100 a barrel this year, compared with $105 a barrel previously, taking into account the recent decline in oil prices.
In the third quarter, its price averaged $100.85, up 37% year-on-year, after reaching $113.78 in the second quarter.
“Despite the decline in crude oil prices and the sharp drop in refining margins, we continued to deliver positive results, primarily due to the strong performance of our operations
international”, commented Eni CEO Claudio Descalzi.
Eni’s hydrocarbon production is now expected to reach 1.63 million barrels per day (mbd) for the year, compared to 1.67 million previously.
In the third quarter, production fell by 7% to 1.57 million barrels per day.
The group has started to balance its portfolio with the increased development of renewable energy activities.
Eni has committed to reducing the net greenhouse gas emissions of its energy products by 80% by 2050.
In the wake of Russia’s invasion of Ukraine, Eni announced in early March that it would sell its 50% stake in the Blue Stream pipeline, which it controls equally with the Russian giant Gazprom, but no deal has yet been concluded.
Russia announced in early October that it would resume gas deliveries to Italy after suspending them due to a “problem” in Austria, the country through which the Russian gas passes.
Eni had previously said it was ready to pay 20 million euros in guarantees to unblock the suspension of Russian gas deliveries.
