Eni Earnings: Profit Falls on Lower Oil and Gas Prices

Eni ENI reported adjusted net earnings of EUR 2.9 billion for the first quarter, a small decline from adjusted net earnings of EUR 3.2 billion a year ago. The weakening profit was a result of lower oil and gas prices, which fell 20% and 42%, respectively, from last year.

Operating cash flow, excluding working capital, decreased to EUR 5.3 billion from EUR 5.6 billion in 2022. Net debt excluding leases rose to EUR 8.0 billion, implying a gearing ratio of 14% versus 13% the year prior. Eni left its shareholder payout guidance unchanged for 2023: a dividend of EUR 0.94 per share and EUR 2.2 billion in share buybacks. It previously revised its shareholder payout target to 25%-30% of cash flow, which places it at the lower end of the peer range.

The exploration and production segment’s adjusted operating profit fell to EUR 2.8 billion from EUR 4.3 billion the year before, largely due to lower oil and gas prices. First-quarter production held constant at 1.66 million barrels of oil equivalent per day from the year before, largely thanks to ramp-ups in Mozambique and Mexico that were offset by mature field declines. Management reiterated its full-year production guidance of 1.63-1.67 mmboe/d with second-quarter production of 1.6 mmboe/d.

The global gas and liquefied natural gas portfolio’s adjusted operating profit rose to EUR 1.4 billion from EUR 931 million the year before, driven by optimization and successful trading, which captured value from price movements. Sales volumes offset some of these gains, falling to 14.8 billion cubic meters from 18.2 bcm the year prior. Management tightened its full-year operating income guidance to EUR 2.0 billion-EUR 2.2 billion from EUR 1.7 billion-EUR 2.2 billion, a positive sign for the segment.

The mobility, refining, and chemicals segment reported adjusted operating income of EUR 154 million compared with a loss of EUR 91 million the year prior, benefiting from stronger refining margins but harmed by weakening chemical demand.