A wind of growth is blowing for Eni which, despite the fluctuating oil situation, returns to profit in the first half of 2017: 1,207 billion against a loss of 315 million in the first six months of 2016. The improvement in the accounts, already outlined in the first quarter of 2017, consolidates and expands in the second quarter, leading Eni to leap forward from a loss of 317 million ( II quarter 2016) projects the group to a profit of 463. The production of hydrocarbons rises from 1,734 to 1,783 million barrels equivalent. But it is surprising data comes from refining and chemistry: adjusted R&M operating profit increased to 165 million in the second quarter, almost four times the result of the second quarter 2016 despite the partial unavailability of the Sannazzaro refinery. While the adjusted operating profit of Chemicals is a true record: 187 million in the second quarter (+67%), the highest ever, and 310 million in the half year. The Stock Exchange welcomed the half-year data with a rise of title by 0,38% to 13,27 euros (at 10 on Friday) while the Ftse Mib lost 0,59%.
Adjusted net operating cash flow generated by the Eni group doubled from 2,477 to 4,881 billion in the six months (before the change in working capital and excluding inventory profit/loss) and grew by 56% in the quarter to 2,71 billion. The group has generated around 700 million of free cash flow to cover the dividend and allows, confirms the CEO Claudio Descalzi, the payment of an advance of 40 cents on 2017.
The turning point took place in the second quarter: adjusted operating profit increased fivefold to 1,02 billion against 188 million in 2016 and almost quadrupled in the half year to 2,85 billion against 771 million in 2016. Adjusted net profit rose to 463 million from a loss of 317 million while assets of 1,21 billion in the half year compare with a loss of 315 million in the same period of 2016.
Net profit substantially broke even in the quarter and more than doubled in the six months to 980 million against a loss of 829 million.
Investments remain high: €4,97 billion in the first half "aimed at completing the major projects launched as scheduled in the first part of 2017," Eni said. Generated approximately €700 million of free cash flow to cover the dividend.
Finally theand divestments: in the first half of 2017, Eni finalized disposals for approximately €2,9 billion, equal to 60% of the minimum target set by the 2017-2020 plan. Precisely from the finalization of the disposals already underway, Eni expects to reduce its debt at the end of the year from 15,5 billion as at 30 June.
“In the first half of the year we have obtained excellent results – is the comment of the CEO Claudio Descalzi before the presentation of the half-year report to the analysts - who confirm the effectiveness of our strategy. We have started production in record time on three large offshore projects in Ghana, Angola and Indonesia, demonstrating our excellence also in the development phase, as well as in the exploration phase which has guaranteed us in the first half, 500 million barrels of new resources. In the first six months of the year, we thus obtained approximately 200 boe/day of new production, achieving a growth rate of more than 6% and continuing the trend already started in the previous months. To this will be added the start of production of the Zohr field, which will take place by the end of the year. These results were achieved by maintaining an extremely efficient spending structure, thanks to which we will reduce capex by approximately 18% compared to 2016 as per plan. The gas, R&M and Chemicals businesses continue to achieve results above expectations: the Chemicals, in particular, achieved a record result with over €300 million of Ebit, a sign that the efforts made to strengthen, reposition the product portfolios and the search for efficiency are paying off.
All of this has allowed us, despite a still volatile Brent scenario, organic cash generation of around 5 billion with a free cash flow of 700 million: we are therefore able to confirm the targets for organic coverage of investments and dividends. On these bases, I will confirm the proposal to the BoD on 14 September for an interim dividend of €0,40 per share.”
