Italy’s Eni (BIT: ENI) recorded a 64% drop in net profits during the first half of 2023 as oil and gas prices fell.
The Milan-listed firm, which recently announced it is acquiring North Sea operator Neptune Energy, recorded earnings of 2.6 billion euros, down from 7.3bn in H1 2022.
Brent Crude prices are down 26% on H1 2022, recognised at $79.83 per barrel for the six-month period, while spot gas prices were down 50% to 500 euros per thousand cubic metres.
Eni said its Q2 pre-tax profits of 3.7bn euros (down 41%) was a “highly robust outcome” in its results, given the drops.
First-half production at 1.633m barrels of oil equivalent per day was just 1% lower than H1 2022.
The firm noted that its $5bn acquisition of Neptune Energy remains on course to complete at the start of 2024.
Eni’s Group tax rate increased by 8% during Q2 (vs Q2 2022) to a total of 47%, in part due to the impact of the UK windfall tax.
CEO Claudio Descalzi said “Eni has delivered excellent operating and financial results in Q2 ’23 despite a less supportive environment,” and noted the firm;s “considerable steps forward in advancing strategy across the business”.
He went on to note the benefits of the mooted Neptune acquisition.
“Neptune’s gas focused portfolio, geographic and operational complementarity with Eni and its low operating emissions profile is an exceptional fit with our strategic objectives yielding significant operating and financial upside.
Eni started a 2.2 billion euro share buyback programme in May, which is expected to complete in April 2024.
Mr Descalzi added: “Our strategic initiatives will each contribute towards the very positive performance progression targeted in our plan. Considering our first half results and continuing business performance that drives raised guidance, we have a solid position from which to pay our first quarterly instalment of the raised €0.94 per share 2023 dividend in September and continue our €2.2 bn buyback which commenced in May.’’