Eni, Italy’s biggest oil company, said second-quarter profit rose 51%, boosted by the improved performance of its gas and power division and its services subsidiary Saipem.
Adjusted net income for the quarter increased to $1.16 billion, the company said. Revenue fell to $36.7billion from $37.6billion.
The gas and power division posted a $53.6million profit in the quarter from a $303.9million loss a year earlier, benefiting from the successful renegotiation of gas supply tariffs with Gazprom.
Saipem also recovered from past losses, posting a second-quarter profit of $100million earlier this week.
“Eni reported a significant increase in cash flow,” thanks to the gas contracts renegotiations, said Claudio Descalzi, Eni chief executive.
Second-quarter operating cash flow of $4.8billion, the highest since the second-quarter of 2012, will allow the company to propose an interim dividend of $0.75 per share, Descalzi said.
Overall production was little changed from the previous quarter at 1.58million barrels of oil a day.
The refining and marketing division posted a net adjusted loss of $221million in the quarter.
A sharp decline in refining margins and a deterioration in the European refining sector caused by excess capacity has prompted Eni to accelerate the restructuring of its refineries, Descalzi said.
The company has already begun negotiations with unions to close refineries shutting as much as half the company’s 774,000 barrel-a-day capacity.
Eni said it expects continuing weak conditions in the European industries of gas distribution, refining and fuels and chemical products marketing, and plans to continue with cost cuts and renegotiation of gas contracts.
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