Eni extends the losses in Piazza Affari after the publication of the first quarter accounts. The stock, which was down by more than 1% in the morning, dropped by 15% at 1,39 at 15,578 euros.
The first three months of 2019 closed with a Useful of 1,09 billion euros, up 15% compared to the 946 million euros of the first quarter of 2018, but below market expectations. L'adjusted net profit instead it stood at 992 million euros (+1%), also in this case below the consensus, equal to 1,05 billion.
In the January-March period, i revenues rose from 18,07 to 18,8 billion euros, while theoperating profit it stood at 2,51 billion from 2,4 the previous year. L'adjusted operating profit was equal to 2,35 billion in the quarter, broadly in line with the first quarter of 2018.
La hydrocarbon production for the quarter was 1,83 million barrels equivalent per day, down 1,3% excluding the price and portfolio effect. Through a note, Eni specified that the comparison was affected by the termination of the Intisar production contract in Libya which took place starting from the third quarter of 2018 and by the production decline, the effects of which were almost entirely offset by the strong organic increase in volumes driven by the ramp up of Zohr and the projects started in 2018 for a total of 200 kboe/d. The company also points out that 174 mmboe of exploration resources were discovered during the quarter.
"I am very satisfied with the excellent industrial and financial performance achieved by Eni in the first quarter of 2019 - comments the CEO, Claudio Descalzi. “In particular – he continues – the E&P business, in the presence of a substantially unchanged market scenario, improves its economic results by 25% compared to the first quarter of 2018, confirming a growing cash generation for the full year. The results of the G&P sector are also improving: the operating profit increases by 16% to 372 million euros and this gives us further comfort on the achievement of the objective of 500 million profit for the full year. Downstream R&M and Chemicals mitigate the effect of a recessionary margin scenario and maintain the expectation of a broad recovery in the next nine months, especially in Refining and Oil Marketing. Overall, management in the first quarter generated a cash flow of 3,42 billion euro, up 8% and 1,5 billion higher than investments for the period, which amounted to around 1,9 billion, in line with expectations of a value of 8 billion euros for the full year”.
The group confirms that hydrocarbon production this year will grow by 2,5% with Brent at $62 a barrel and net of portfolio transactions. For 2019, the company led by Claudio Descalzi will invest 8 billion euros in fixed capital (capex) and expects to generate cash flow of 12,8 billion euros. Cash neutrality, i.e. coverage of organic investments and the dividend, will be achieved with a Brent price of around 55 per barrel or 52 dollars, implementing the pre-IFRS 16 targets.
